Global Business Strategy
Exam Materials
Course Introduction
Global Business Strategy explores the frameworks, tools, and concepts essential for organizations aiming to compete and succeed in international markets. The course examines how multinational enterprises assess global opportunities and challenges, develop cross-border strategies, and manage complexities such as cultural differences, political risk, global supply chains, and the dynamics of international competition.
Emphasizing both theory and real-world case studies, students will learn how firms create sustainable advantages in a rapidly evolving global landscape by leveraging strategic planning, innovation, and ethical considerations in diverse markets.
Recommended Textbook
International Business The Challenge of Global Competition 13th Edition by Donald Ball\
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18 Chapters
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Chapter 1: The Challenging World of International Business
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Sample Questions
Q1) External environmental forces are commonly referred to as controllable.
A)True
B)False
Answer: False
Q2) Opponents of free trade point out that globalization has contributed to a decline in environmental and health conditions.
A)True
B)False
Answer: True
Q3) Foreign environmental forces often operate differently than domestic environmental forces because:
A) they are uncontrollable.
B) force values are different.
C) changes are difficult to assess.
D) two of the above.
E) all of A, B, and C.
Answer: D
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Chapter 2: International Trade and Foreign Direct Investment
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Sample Questions
Q1) Record levels of American outward foreign direct investment from 2000 to 2009, totaling more than $2 trillion, caused U.S. exports to decline during this time period.
A)True
B)False
Answer: False
Q2) Explain the logic of mercantilism and why it is generally viewed as a deficient theory.
Answer: Answers may vary, but mercantilism traditionally has been interpreted as an economic philosophy that viewed the accumulation of precious metals as an activity essential to a nation's welfare because these metals were, in the mercantilists' view, the only source of wealth. As a result, the government established economic policies that promoted exports and stifled imports, resulting in a trade surplus and protection of jobs in the mercantilist nation. Mercantilist behavior tended to be costly to groups such as consumers and some emerging industrialists and to raise the potential for retaliatory efforts by other governments that encounter trade deficits due to the policies of the mercantilist nation.
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Page 4
Chapter 3: International Institutions From an International Business Perspective
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Sample Questions
Q1) "Trade without discrimination" in the WTO means that
A) the MFN principle can be ignored.
B) all trading partners must be treated the same.
C) racially based trading patterns are tolerated.
D) developing and developed nations must be separated for trading purposes.
Answer: B
Q2) Some think that renewed focus on exchange rates would be a good path forward for the IMF, which is struggling with core issues related to its purpose.
A)True
B)False
Answer: True
Q3) In a customs union, common external tariffs are added to an existing FTA, as found in the Southern African Customs Union and Mercosur.
A)True
B)False
Answer: True
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Page 5
Chapter 4: Sociocultural Forces
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Sample Questions
Q1) Monochronic cultures tend to be:
A) high context (HC).
B) low context (LC).
C) ethnocentric.
D) hierarchical.
Q2) Hofstede's measure of the amount of effort a society puts into ordering the environment and avoiding ambiguity is termed:
A) Truth.
B) flexibility.
C) ambiguity.
D) uncertainty avoidance.
Q3) Religion is not an important aspect of culture in countries that are secular and have split the church from the state.
A)True
B)False
Q4) Trompenaars' particularist dimension describes a culture in which:
A)people apply the rules equally to everyone.
B)context is considered when rules are applied.
C)relationships rather than rules regulate behaviors.
D) B and C.
Page 6
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Chapter 5: Natural Resources and Environmental Sustainability
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Sample Questions
Q1) Select a country and show a relationship between its physical forces and its economy.
Q2) Which country controls the export market of rare earths?
A) Brazil
B) Russia
C) the United States
D) China
Q3) The North-South divide uses climatic differences to explain:
A) population differences.
B) trade patterns.
C) differences in human development.
D) cultural differences.
Q4) Sustainable business practices have three characteristics: limits, interdependence, and equity.
A)True
B)False
Q5) Saudi Arabia and Canada have the largest proven oil reserves.
A)True
B)False
Q6) Explain the concept of sustainability as applied to business, using examples. Page 7
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Page 8
Chapter 6: Political and Trade Forces
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Sample Questions
Q1) The reasons a government may nationalize a firm include:
A) to extract more money from the firm.
B) to increase the firm's profitability.
C) to preserve jobs.
D) all of the above.
E) two of A, B, and C.
Q2) The most common form of direct government participation in trade is:
A) the subsidy.
B) shipping on national vessels.
C) import duties.
D) a combination of the above.
E) none of the above.
Q3) The United States allocates quotas to 40 countries for specific tonnages of: A) sugar.
B) roast beef.
C) malt beer.
D) soybeans
E) two of the above.
Q4) Discuss barriers to trade, using examples to illustrate your points.
Q5) What is dumping, and why is it found to be problematic?
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Chapter 7: Intellectual Property and Other Legal Forces
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Sample Questions
Q1) Antitrust laws differ among countries, and complying with them is often difficult for the firm, so:
A) international firms have had to increase their legal staff to ensure compliance.
B) the U.S. government is pushing for a world organization to clear antitrust issues.
C) firms have moved toward fewer mergers and more regionalized organizations.
D) firms expect to be in antitrust litigation and act accordingly.
E) two of the above.
Q2) Patent trolling is the process of:
A) looking for loopholes in patent protection and exploiting them.
B) recording and registering patents in foreign countries to protect the firm's IP.
C) searching out patents that have expired and negotiating their replacements.
D) legal research that uncovers obscure, deceased patent holders and liberates their inventions.
E) none of the above.
Q3) One of the first issues the chapter addresses is the rule of law. Explain this concept's importance to an international manager.
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Chapter 8: The International Monetary System and Financial Forces
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Q1) Fixed-rate relationships among currencies could not stay fixed, according to Obstfeld and Rogoff, because:
A) the volume of global transactions started to exceed most countries' foreign exchange reserves, so governments couldn't intervene to sustain the value of their currency.
B) the complexity of international trade demanded return of the gold standard.
C) Walmart and other leading firms argued successfully at the Federal Reserve that fixed rates were too costly to maintain.
D) the EU had decided to float the euro.
Q2) The Bretton Woods meeting in 1944 established a fixed-rate exchange system among Allied governments that was imposed on the Axis governments.
A)True
B)False
Q3) Tariffs are not a financial force; they are a political force.
A)True
B)False
Q4) Explain the principles on which The Economist's Big Mac index is built, and comment on its use to international managers.
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Chapter 9: International Competitive Strategy
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Sample Questions
Q1) When a company faces relatively weak pressures for local responsiveness and cost reductions, it should tend to use a:
A) global strategy.
B) multidomestic strategy.
C) transnational strategy.
D) differentiation strategy.
E) home replication strategy.
Q2) To set corporate objectives, management must first:
A) select a viable market segment.
B) quantify them.
C) define the firm's mission.
D) research the market.
E) none of the above.
Q3) In planning, there has recently been a decided move among many firms:
A) to use advanced statistical techniques to help produce voluminous and detailed strategic plans.
B) toward a less structured format and a shorter plan.
C) to concentrate on factors that can be easily quantified.
D) to make detailed forecasts and project them out at least five years.
E) two of the above.
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Chapter 10: Organizational Design and Control
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Q1) Two of the concerns that management faces in designing the organizational structure for an international company are (1) finding the most effective way to take advantage of geographic differences and (2) coordinating the activities of departments to enable the firm to meet its overall objectives.
A)True
B)False
Q2) A structure organized by more than one dimension at the top level is known as a:
A) hybrid organization.
B) matrix organization.
C) matrix overlay.
D) network corporation.
E) virtual corporation.
Q3) Hybrid organizations are often the result of a regionally organized company having introduced a new and different product from what the regionally organized form is accustomed to handling.
A)True
B)False
Q4) Explain why and where decisions are made among ICs and their subsidiary units.
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Chapter 11: Global Leadership Issues and Practices
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Sample Questions
Q1) Global teams are characterized by:
A) their virtuality and use of many media.
B) their geographic dispersion.
C) their diversity.
D) their differing member contexts.
E) all of the above.
Q2) Globalization increases the complexity of the external but not the internal context of the company.
A)True
B)False
Q3) There are more global leaders than there is demand for them.
A)True
B)False
Q4) If a student wants to become a global leader, she or he might:
A) study abroad and live with host families.
B) build language and cultural fluency.
C) take international internships.
D) travel as much as possible.
E) all of the above.
Q5) What are the differences between traditional and global teams?
Page 14
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Chapter 12: Assessing International Markets
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Sample Questions
Q1) As humans, it is easier to think of ourselves as market segments that extend across borders than as discrete country segments.
A)True
B)False
Q2) Market screening eliminates:
A) undesirable products.
B) markets that are judged to be less attractive.
C) environmental forces.
D) competition.
E) two of the above.
Q3) Managers may consider entering a market in which strong competition already exists if they believe entering a competitor's home market will distract the competitor's attention from the new entrant's own home market.
A)True
B)False
Q4) Estimation by analogy is an example of a market factor.
A)True
B)False
Q5) Discuss cluster analysis as a method of estimating market demand.
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Chapter 13: Entry Modes
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Sample Questions
Q1) Partnerships between or among competitors, customers, or suppliers that may take one or more of various forms, both equity and nonequity, are known as:
A) licenses.
B) joint ventures.
C) wholly owned subsidiaries.
D) strategic alliances.
E) management contracts.
Q2) According to the text, licensing agreements usually stipulate that a royalty of __________ be paid to the licensor.
A) 2 to 5 percent of profits
B) 2 to 5 percent of sales
C) 5 to 7 percent of profits
D) 5 to 7 percent of sales
E) none of the above
Q3) What are the drawbacks of indirect exporting?
Q4) Licensing is a form of franchising.
A)True
B)False
Q5) What are the disadvantages of joint ventures?
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Chapter 14: Export and Import Practices
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Sample Questions
Q1) What is an export license?
A) Permission from the U.S. government to export
B) An international quality performance rating
C) A shipping qualification
D) Permission from the top management team to export
E) Permission to transfer domestic currency abroad
Q2) On an open account, the buyer assumes all of the payment risk.
A)True
B)False
Q3) Factoring allows the exporter to be more competitive by selling on open account rather than by means of the more costly letter-of-credit method.
A)True
B)False
Q4) Collection documents are:
A) for debt carried in cash receivables.
B) needed to load and unload transported goods.
C) presented to the buyer for payment.
D) certificates of origin, invoices, and inspection certificates.
E) C and D.
Q5) How do U.S. nonexporting firms often explain their avoidance of foreign markets?
Page 17
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Chapter 15: Marketing Internationally
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Sample Questions
Q1) The benefits from standardization of the marketing mix are lower costs, easier control, and reduction of time in preparing the marketing plan.
A)True
B)False
Q2) The promotional mix includes:
A) personal selling.
B) product design.
C) pricing.
D) all of the above.
E) two of A, B, and C.
Q3) Generally, as marketers go down the economic and social strata in each country, they tend to find greater similarities among countries on social and cultural values.
A)True
B)False
Q4) Advertisers have followed glocalization to reduce costs, enabling them to develop a common strategy for large regions.
A)True
B)False
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Chapter 16: Global Operations and Supply Chain Management
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Q1) In many companies, the purchasing function has been viewed as a prime candidate for outsourcing to other firms, a trend encouraged by rapid developments in e-procurement.
A)True
B)False
Q2) Investigation of export and import data shows:
A) there is a strong relationship between global sourcing and ownership of the foreign sources.
B) there is no relationship between global sourcing and ownership of the foreign sources.
C) American firms, but not Japanese firms, buy from their U.S. subsidiaries.
D) American firms import twice as much from their overseas subsidiaries as foreign firms import from their U.S. affiliates.
E) two of the above.
Q3) As discussed in the text, global sourcing arrangements include overseas joint ventures, independent overseas manufacturers, and wholly owned subsidiaries.
A)True
B)False
Q4) What are the benefits of standardization of global operations?
Page 19
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Chapter 17: Managing Human Resources in an International Context
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Sample Questions
Q1) Qualifications for a good manager of an overseas operation should include:
A) all of B, C, and D.
B) being bicultural and bilingual.
C) knowing business practices in the home and host countries.
D)having more and different skills than domestic managers.
E) two of B, C, and D.
Q2) Sources of successful managers for IC activities include the home country, the host country, and a third country.
A)True
B)False
Q3) Being from another country qualifies expatriates for international status. A)True
B)False
Q4) The use of TCNs has become particularly prevalent in the developing countries. A)True
B)False
Q5) Employees hired in the host country are sometimes called flexpatriates.
A)True
B)False
Q6) Discuss the advantages and disadvantages of employing third-country managers. Page 20
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Chapter 18: International Accounting and Financial Management
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Q1) How could an IC benefit from leading and lagging?
Q2) 3BL gives companies the chance to measure and make public the social and environmental effects of their decisions: they should welcome this, in part because:
A) what we tend to learn about companies is what is reported in the media, and that reporting tends to be focused on problems.
B) it's about time companies are held accountable for their actions.
C) right now we measure company decision results only at the economic level.
D) A and C.
Q3) In exposure netting, a risk management technique similar to multilateral netting, the firm runs a centralized clearing account that matches and nets out FX exposure across currencies or currency families.
A)True
B)False
Q4) The key issue related to translation exposure is:
A) the local interest rates.
B) what method to use for the translation, current rate or temporal.
C) strategic planning.
D) A and C.
Page 22
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