Global Business Environment
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Course Introduction
Global Business Environment explores the dynamic factors shaping international commerce and the interconnectedness of global markets. This course examines key concepts such as globalization, economic systems, political and legal influences, cultural diversity, and technological advancements that impact multinational operations. Students will analyze case studies to understand how businesses adapt strategies to thrive amid diverse regulatory frameworks, competitive landscapes, and socio-economic conditions. By evaluating current trends and challenges including trade policies, global supply chains, and emerging markets students gain the analytical tools needed to make informed decisions in an increasingly complex and evolving global business setting.
Recommended Textbook
International Marketing 16th Edition by
Philip Cateora
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Page 2
Chapter 1: The Scope and Challenge of International Marketing
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Q1) Which of the following is true of ethnocentrism?
A) It is the cultural binding force among a diverse employee population in an organization.
B) It is a problem that arises when managers from affluent countries work with managers and markets in less affluent countries.
C) American managers have generally been uninfluenced by it, especially in the beginning of the 21st century.
D) It is the cornerstone of effective adaptation in the field of international marketing.
E) Self-reference criterion is universally considered the technique to reduce or eliminate ethnocentrism.
Answer: B
Q2) In dealing with unfamiliar markets, marketers must be aware of the frames of reference they are using in making their decisions.
A)True
B)False
Answer: True
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Page 3
Chapter 2: The Dynamic Environment of International Trade
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Q1) Protection of an infant industry is recognized by economists as a valid argument in favor of protectionism.
A)True
B)False
Answer: True
Q2) As the U.S. trade deficit has grown, pressures have begun to push the value of the dollar to higher levels.
A)True
B)False
Answer: False
Q3) Which of the following is the major reason behind the failure of American MNCs to completely dominate the European markets as predicted by Servan-Schreiber?
A) The resurgence of competition worldwide.
B) The uneven distribution of economic power.
C) The restructuring of U.S industries.
D) The decadence of Communism.
E) The dissolution of colonial powers.
Answer: A
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4
Chapter 3: History and Geography: The Foundations of Culture
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Q1) The manner in which the United States acquired land for the Panama Canal Zone typifies a U.S. foreign policy, _____, -whatever is good for the United States is justifiable.
A) Manifest Destiny
B) Hay Manifesto
C) Roosevelt Corollary
D) Gadsden Policy Position
E) Wilson Mandate
Answer: C
Q2) Which of the following events caused the Chinese to cede Hong Kong to the British?
A) The First Opium War
B) The Satsuma Rebellion
C) The Tianjing Rebellion
D) The Taiping War
E) The Hong Kong Revolution
Answer: A
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Page 5
Chapter 4: Cultural Dynamics in Assessing Global Markets
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Q1) Based on the Individualism/Collectivism Index, in which of the following cultures will the "virtual social" activity of online chatting be most acceptable?
A) One in which individualism reigns supreme.
B) One in which collectivism is adopted.
C) One that has a high tolerance for ambiguity.
D) One which has a willingness to take risks.
E) One with no separation between the church and the state.
Q2) In the context of cultural change, write a short note on the resistance to change in different cultures.
Q3) Cultures low in Uncertainty Avoidance Index take a more empirical approach to understanding and knowledge.
A)True
B)False
Q4) The Uncertainty Avoidance Index (UAI), one of the four dimensions of culture, identified by Geert Hofstede, focuses on assertiveness and achievement.
A)True
B)False
Q5) List the four dimensions of cultural values as given by Hofstede.
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Chapter 5: Culture, Management Style, and Business Systems
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Q1) Utilitarian ethics is the ethical principle that focuses on the optimization of the "common good."
A)True
B)False
Q2) Which of the following views is consistent with normative U.S. cultural concepts?
A) Collective good outweighs the individual gain.
B) The decision-making power lies in the hands of the highest authority.
C) Personal relationships are more important in daily life than work and the company.
D) Independent enterprise is an instrument for social action.
E) A broader set of stakeholders is crucial to the company.
Q3) Briefly describe the different types of business customs.
Q4) Subornation payments accompany requests for a person to do a job more rapidly or more efficiently.
A)True
B)False
Q5) How important is adaptation in international marketing? What are the basic criteria to deal with foreign firms?
Page 7
Q6) Discuss the American manager's attitude toward objectivity in decision making.
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Chapter 6: The Political Environment: a Critical Concern
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Q1) An attempt to lessen political risks by paying those in power to intervene on behalf of the multinational company is referred to as a _____.
A) subornation
B) protectionism
C) political payoff
D) buy out
E) rake-off
Q2) ______ is an intense feeling of state pride, unity, and an awakening of a country's people to pride in their country.
A) Socialism
B) Communism
C) Fascism
D) Nationalism
E) Polarism
Q3) What are the conditions under which relations between governments and MNCs are generally positive?
Q4) Discuss stability of governments and list the main political causes of instability in international markets.
Q5) Describe the characteristics of a sovereign state.
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Chapter 7: The International Legal Environment: Playing by the Rules
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Q1) Which of the following indicates the exportability status of the item based on the ECCN?
A) Commerce Control List
B) Entity List
C) Common List
D) Priority Export List
E) International Trade List
Q2) One of the deterrents to litigation with respect to disputes in the international business arena is the fear of creating a poor image and damaging public relations.
A)True
B)False
Q3) In code-law countries, the ownership of intellectual property is determined by
A) heredity
B) nature of use
C) duration of usage
D) registration
E) indemnification
Q4) Briefly describe the modus operandi of cybersquatters.
Page 9
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Chapter 8: Developing a Global Vision Through Marketing Research
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Q1) Before launching its latest line of environment-friendly and child-friendly wooden toys, a toy manufacturer gave samples of those toys to a large and culturally diverse set of families. It then conducted a survey where the parents were asked to rate the toys on a step-wise scale of "not satisfied" to "extremely pleased." This is an example of _____ research.
A) quantitative
B) analytical
C) descriptive
D) deductive
E) explanatory
Q2) _____ data refers to the data that has been collected specifically for the particular research project at hand.
A) Derived
B) Primary
C) Referential
D) Bipolar
E) Cohort
Q3) List the six steps in a research process.
Q4) List the various uses of the Internet in international marketing research.
Q5) Write a short note on the expert opinion method of demand forecasting.
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Chapter 9: Economic Development and the Americas
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Q1) The marketing process substage in the United States economy from 1950 to the present is mass production.
A)True
B)False
Q2) The level of political stability in a country is the single most important environmental element to which the foreign marketer must adjust the marketing task.
A)True
B)False
Q3) Markets that are geographically large, have strong growth rates, are regional economic drivers and represent sizable markets for a wide range of products are known as _____.
A) captive markets
B) big emerging markets
C) niche markets
D) contestable markets
E) two-sided markets
Q4) What is economic development?
Q5) Discuss the features of Mercosur and its role in improving trade associations among American nations.
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Chapter 10: Europe, Africa, and the Middle East
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Q1) A _____ agreement eliminates all tariffs and other restrictions on internal trade, adopts a set of common external tariffs, and removes all restrictions on the free flow of capital and labor among member nations.
A) political union
B) Paris
C) regional cooperation for development (RCD)
D) customs union
E) free trade area (FTA)
Q2) It was not until this single market was established that the United States, Japan, and other countries gave serious thought to creating other alliances. Which of the following is being referred to here?
A) European Commission.
B) The European Economic Community.
C) The European Steel and Coal Community.
D) The Asia-Pacific Economic Cooperation.
E) The European Community.
Q3) The Baltic States had a history of a free trade regime.
A)True
B)False
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Page 12
Chapter 11: Asia Pacific Region
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Q1) China's longest border is with Russia.
A)True
B)False
Q2) China is now the biggest market for personal computers.
A)True
B)False
Q3) _____ is now Japan's most important trading partner.
A) Malaysia
B) The United States
C) Bangladesh
D) Bahrain
E) China
Q4) The Chinese central government spends almost 50 percent of its budget for the rural poor who amount to almost three-fourths of the Chinese population.
A)True
B)False
Q5) Discuss the political factors behind the Japanese crisis of 1990.
Q6) Which are the areas that come under "The Greater China"? Elaborate on their inter-relations.
Page 13
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Chapter 12: Global Marketing Management: Planning and Organization
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Q1) Strategic planning is conducted at the highest levels of management and deals with products, capital, research, and long-term and short-term goals of the company.
A)True
B)False
Q2) Kwok Winn wants to open a new business in his own country, Singapore. He has decided on a form of licensing that will provide him with a standard package of products, systems, and management services in order to sell fast food to local residents. Which of the following best describes the form of business that Mr. Winn has chosen?
A) Direct sales
B) Exporting
C) Joint venture
D) Strategic alliance
E) Franchising
Q3) In the context of planning for global markets, the planning process is a primary medium of organizational learning.
A)True
B)False
Q4) Explain the difference between a joint venture and consortia.
Page 14
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Chapter 13: Products and Services for Consumers
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Q1) From a sociological viewpoint, any idea perceived as new by a group of people is considered as a(n) _____.
A) creation
B) adaptation
C) ideation
D) homologation
E) innovation
Q2) Cultural barriers play a bigger role in services than in merchandise trade.
A)True
B)False
Q3) An important first step in adapting a product to a foreign market is to determine the degree of newness as perceived by the intended market.
A)True
B)False
Q4) One of the three variables, which affect the rate of diffusion of a product, is the product's degree of perceived newness.
A)True
B)False
Q5) Define a global brand. How important are global brands?
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Chapter 14: Products and Services for Businesses
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Q1) Which of the following is true of commercial relationships in countries with collectivistic and high-context cultures?
A) The commercial relationship will be limited to a one-time provision of the good or service.
B) Efficiency and innovation will matter more than long-term relationship building.
C) Trust will be a crucial aspect of commercial relationships.
D) The focus of the relationship is likely to be on price and value-for-money.
E) Customer loyalty is likely to be fleeting and short-lived.
Q2) One of the ways that an industrial firm can manage the inherent volatility of the industrial sector is by increasing advertising expenditure during booms.
A)True
B)False
Q3) Capitalism is the most serious threat to the continued expansion of international services trade.
A)True
B)False
Q4) What is the ISO 9000 certification?
Q5) Discuss the price-quality relationship.
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Chapter 15: International Marketing Channels
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Q1) Which of the following statements is true regarding an export management company (EMC)?
A) It acts as a middleman for firms with relatively large international sales volume.
B) It operates under its own name while providing services to another firm.
C) It does not have direct responsibility to the parent firm.
D) It acts as a middleman for firms willing to involve their own personnel in international functions.
E) It calls for a minimum investment from the parent firm to get into international markets.
Q2) Merchant middlemen tend to be more controllable than agent middlemen because they take title to manufacturers' goods.
A)True
B)False
Q3) Ideally, a website should be translated into the languages of the target market.
A)True
B)False
Q4) What are the various techniques that can be used to motivate middlemen?
Q5) What is complementary marketing?
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Chapter 16: Integrated Marketing Communications and International Advertising
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Q1) Which of the following steps of a communications process is important as a check on the effectiveness of the other steps?
A) Selecting a proper message.
B) Encoding the message.
C) Selecting an appropriate channel of communication.
D) Decoding the message.
E) Feedback.
Q2) Which of the following is an example of comparative advertising?
A) An ad using a scantily clad model to promote a soft drink.
B) An ad showing a celebrity smoking his preferred brand of cigarettes.
C) An ad showing a dog choosing one brand of dog food over another.
D) An ad showing the superiority of synthetic materials used in its products as compared to cotton.
E) An ad using shocking or taboo material to promote a product.
Q3) In Spain, a new medium for advertising called Publicoche includes:
A) lasers projected onto clouds.
B) private cars that are painted with advertisements.
C) buses fitted with television sets showing promotional messages.
D) financing of popular sporting and entertainment events.
Page 18
E) hot air balloons printed with promotional messages.
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Chapter 17: Personal Selling and Sales Management
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Q1) David is a Canadian national who works for a U.S. company in Japan. David may be considered to be a _____.
A) long-term virtual expatriate
B) native salesperson
C) third-country national
D) short-term virtual expatriate
E) local national
Q2) Which of the following is an advantage of virtual expatriates?
A) They can bond well and work better with their subordinates in the foreign country.
B) They can establish closer relationships with their customers in the foreign country.
C) Their families do not have to be uprooted from their home country.
D) They possess complete local knowledge about cultural practices in the foreign country.
E) They can avoid cross-cultural communications problems with their foreign colleagues.
Q3) What are the advantages and disadvantages of using an expatriate sales force?
Q4) What are the reasons for the low morale and growing amount of attrition among returning expatriates?
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Chapter 18: Pricing for International Markets
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Q1) For _____ duties to be levied on a good, it must be shown that prices are lower in the importing country than in the exporting country and that producers in the importing country are being directly harmed by dumping.
A) countertrade
B) domestic protection
C) countervailing
D) foreign practice
E) import restriction
Q2) Explain the process of parallel importing.
Q3) Which of the following is an example of a price-fixing arrangement?
A) Price escalation
B) Barter houses
C) Letters of credit
D) Cartels
E) Countertrade
Q4) What are the essential features required while making price quotations?
Q5) Except for cash in advance, letters of credit afford the greatest degree of protection for the seller.
A)True
B)False
Page 20
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Chapter 19: Negotiating With International Customers,
Partners, and Regulators
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Q1) Which of the following factors often gets in the way of American team negotiations?
A) A cultural heritage of interdependence and collectivism.
B) Emphasis on careful note taking and training via observation.
C) Compensation schemes overly emphasizing individual performance.
D) Preference for split commissions for negotiation teams.
E) A strictly hierarchical structure of American organizations.
Q2) In the context of international business negotiations, generalizations about the negotiation style of a region such as Asia are very often correct.
A)True
B)False
Q3) The first stage of the business negotiation process is nontask sounding, which includes all those activities that might be described as establishing rapport or getting to know one another.
A)True
B)False
Q4) Give a brief description of the styles of negotiation of the Japanese, the Koreans, and the French.
Q5) What are the criteria for selecting international business negotiators?
Page 21
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