Global Strategy Exam Bank
Course Introduction
Global Strategy explores the frameworks, tools, and decision-making processes organizations use to compete and succeed in the international marketplace. The course examines how firms analyze global environments, assess cross-border opportunities and risks, and develop strategies to leverage competitive advantages in diverse cultural, economic, and political contexts. Topics include market entry modes, global value chains, adaptation versus standardization, and managing global integration and local responsiveness. Case studies and real-world examples illustrate how leading organizations navigate complex global challenges and create value across different regions.
Recommended Textbook
International Business 16th Edition by John
Daniels
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Page 2
Chapter 1: Globalization and International Business
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Q1) Which of the following has NOT been a major force increasing globalization in recent decades?
A)liberalization of cross-border trade
B)increase in and expansion of technology
C)growing pressure from consumers
D)decreasing prices of natural resources
Answer: D
Q2) When a company successfully responds to foreign production and market opportunities, ________.
A)other companies will likely emulate its successful practices
B)it likely has a long-term advantage over competitors
C)it will downsize its domestic operations
D)its home government likely raises taxes on the company
Answer: A
Q3) Supporters of globalization assert that the process helps countries strengthen their sovereignty.
A)True
B)False
Answer: False
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Page 3
Chapter 2: The Cultural Environments Facing Business
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Q1) What are the advantages and disadvantages of using a nation as a point of reference for a culture?
Answer: The nation, as opposed to the State, provides a workable definition of a culture for international business because basic similarity among people is both a cause and an effect of national boundaries.The laws governing business operations also apply primarily along national lines.Within the bounds of a nation are people who largely share essential attributes, such as values, language, and race.However, these shared attributes do not mean that everyone in a country is alike, nor do they suggest that each country is unique in all respects.
Q2) A problem of using the nation as a reference point for culture is that ________.
A)nations fail to mediate the different interests within their boundaries
B)self-stereotypes tend to fall along national lines
C)such an approach tends to be polycentric
D)variations tend to be great within a country (state)
Answer: D
Q3) Cultural change may come by choice or imposition.
A)True
B)False
Answer: True
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Page 4
Chapter 3: The Political and Legal Environments Facing Business
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Q1) ________ refer(s)to the creative ideas, innovative expertise, or intangible insights that give an individual, company, or country a competitive advantage.
A)Proprietary goods
B)Exclusive ownership
C)Restrictive goods
D)Intellectual property
Answer: D
Q2) Logan Electronics has a production facility in Bolivia.Recently, the firm was taxed at a significantly higher rate than a local electronics company.Which type of political risk is Logan most likely experiencing?
A)systemic
B)procedural
C)distributive
D)catastrophic
Answer: B
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Chapter 4: The Economic Environments Facing Businesses
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Q1) The so-called "misery index" is the sum of a country's ________.
A)foreign and national debt
B)inflation and unemployment rates
C)unemployment level and total debt
D)trade deficit and long-term inflation rate
Q2) The balance of trade is a record of a country's international transactions that take place among companies, governments, or individuals.
A)True
B)False
Q3) The recent global financial crisis has interrupted the trend of national economies
A)rapidly adopting the command market model
B)steadily adopting the free market model
C)moving from the mixed to the command model
D)turning away from the mixed model
Q4) The BRICs are the strongest developed economies in the world.
A)True
B)False
Q5) What is the difference between a command economy and state capitalism?
Page 6
Q6) Describe the three ways economies can be categorized.
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Chapter 5: Globalization and Society
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Q1) Which of the following is NOT an example of normativism?
A)A U.S. subsidiary operating in China that is forced to follow some U.S. laws, even though China has no comparable laws
B)A U.S. sweatshop operating in Thailand that does not follow U.S. labor laws but allows children to work 60 hours a week
C)An MNE manager who, after working in the host country, tries to implement foreign practices in the home-country office
D)A British subsidiary operating in Indonesia that maintains the same health and safety standards for its foreign factories that are required in Great Britain, even though the British government does not require it to use those standards
Q2) Which of the following statements is most likely true about the postconventional level of moral development?
A)Individuals learn what is moral but not why such behavior is moral.
B)Individuals behave morally because they fear negative repercussions.
C)Individuals learn how to conform to society's values through observation.
D)Individuals behave morally because they believe such actions are right.
Q3) Explain why the argument that "anything that is legal is ethical" is insufficient.
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Page 7
Chapter 6: International Trade and Factor-Mobility Theory
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Q1) The international mobility of labor includes workers, students, tourists, and retirees who travel to another country.
A)True
B)False
Q2) Labor and capital mobility are intertwined because ________.
A)illegal workers sometimes pay large sums to people who smuggle them into another country
B)people cannot emigrate to another country unless they bring capital with them
C)companies receive tax benefits for hiring immigrants
D)immigrants bring an investment in human capital with them
Q3) The finite nature of natural resources should work as a disadvantage for the export prices of developing countries.
A)True
B)False
Q4) In a short essay, discuss the theory of absolute advantage and the reasons a country's efficiency improves based on this theory.
Q5) What is the difference between the free trade theories of absolute advantage and comparative advantage? How can free trade improve global efficiency?
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Chapter 7: Governmental Influence on Trade
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Q1) Helping a struggling domestic company through import restrictions frequently causes other countries to retaliate.
A)True
B)False
Q2) Which term refers to a tariff or duty assessed as a percentage of an item's value?
A)specific duty
B)effective tariff
C)ad valorem duty
D)compound tariff
Q3) Unlike the infant-industry argument, the industrialization argument for trade protection ________.
A)requires independence from other countries
B)stresses labor-intensive production methods despite high costs
C)emphasizes use of locally available raw materials for manufacturing inputs
D)presumes that economic growth will occur even if domestic manufactured prices are not globally competitive
Q4) What are the main arguments for limiting trade in services? What is your opinion on limiting trade in services?
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Chapter 8: Cross-National Cooperation and Agreements
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Q1) The role of most commodity agreements now is to ________.
A)discuss issues and disseminate information about commodities
B)keep consumer countries from controlling commodity prices
C)allow producer countries to control inflation by keeping commodity prices low
D)stabilize prices through regional alliances between producer and consumer countries
Q2) When the European Union was formed, the size of the market increased for European companies.This is most likely an example of a ________.
A)dynamic effect
B)static effect
C)trade diversion
D)trade reflection
Q3) The Organization of Petroleum Exporting Countries ________.
A)uses import tariffs to control oil prices
B)stabilizes prices based on demand
C)uses quotas to control oil prices
D)produces all of the world's oil
Q4) In a brief essay, explain the roles of the World Trade Organization and the United Nations in international trade.
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Chapter 9: Global Foreign-Exchange Markets
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Q1) Albert, an employee at Morgan Stanley, has been given the task of handling the foreign exchange for a customer who is moving from Brazil to Switzerland in one week.Which of the following should Albert most likely use when exchanging the client's Brazilian reais for Swiss francs?
A)spot rate
B)cross rate
C)currency option
D)current U.S. rate
Q2) In which of the following transactions is a currency switched with another on one date and then switched back on a future date?
A)reverse transaction
B)spot transaction
C)FX swap
D)outright forward transaction
Q3) A tariff is the price of a currency.
A)True
B)False
Q4) What are the characteristics of the forward market? Why do companies participate in the forward market? Provide an example to illustrate your answer.
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Chapter 10: The Determination of Exchange Rates
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Q1) According to the text, which currency is expected to experience the most change in the upcoming years?
A)yen
B)yuan
C)euro
D)U.S. dollar
Q2) Which EU country has NOT adopted the euro?
A)Germany
B)France
C)Denmark
D)Greece
Q3) According to the Treaty of Maastricht, a euro applicant must have a total outstanding government debt that does not exceed 60% of its GDP.
A)True
B)False
Q4) Describe the exchange rate arrangements used in the EU, Hong Kong, China, and the U.S.
Q5) What is the International Monetary Fund (IMF)? What are its objectives? What occurs when a country joins the IMF today?
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Chapter 11: Global Capital Markets
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Q1) What is an offshore financial center? What are the main characteristics of OFCs?
Q2) Equity financing is the degree to which a firm funds the growth of a business by debt.
A)True
B)False
Q3) The long-term financing dimension of cash management ________.
A)deals with the selection, issuance, and management of long-term debt and equity
B)is unaffected by currency changes because everyone borrows in U.S. dollars
C)focuses on the analysis of investment opportunities
D)is independent of the capital structure of an MNE
Q4) A city or country that provides large amounts of funds in currencies other than its own is a(n)________.
A)offshore financial center
B)ADR facilitator
C)interbank market
D)currency regulator
Q5) The Japanese yen makes up the largest portion of the international bond market.
A)True
B)False
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Chapter 12: The Strategy of International Business
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Q1) Which force in Toyota's immediate environment would most likely have the greatest impact on its strategy?
A)interest rate trends
B)technological developments
C)shifts in U.S. political attitudes
D)actions taken by Honda and Mercedes Benz
Q2) In the context of value chain analysis, the support activities of a firm include ________.
A)outbound logistics, human resources, and information systems
B)production, marketing, and operations
C)shipping and customer service
D)research and development
Q3) The term ________ refers to a global company that thrives on seeking unique ideas and insights from locations around the world and then leveraging that knowledge in international markets.
A)multidomestic
B)domestic
C)metanational
D)cross-cultural
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Page 14
Chapter 13: Country Evaluation and Selection
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Q1) Sales potential is probably the most important variable in determining international location decisions because consumer demand exceeds supply.
A)True
B)False
Q2) Which of the following is the LEAST likely reason that inaccuracies appear in published information about countries?
A)inclusion of both legal and illegal economic activities
B)inclusion of both market and non-market economic activities
C)poor methodology used in data collection
D)use of different translation software
Q3) Elison Enterprises is planning international geographic expansion.A manager at Elison has been given the task of scanning for locations primarily to ________.
A)reduce the number of options available to a manageable number for further detailed analysis
B)assure the compatibility between the mode of corporate operation and the country
C)assure that all countries within a region have similar investment climates
D)decide whether to use a concentration or a diversification strategy
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Chapter 14: Export and Import
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Q1) One advantage of importing is that an importer can diversify its operating risks by developing alternative suppliers.
A)True
B)False
Q2) The perspective of ________ holds that as a company gains experience, resources, and confidence, it progressively increases its scope of countries to which it exports.
A)serendipity
B)export management
C)the born-global theory
D)incremental internationalization
Q3) The CEO of Coffman Enterprises wants to export products to foreign markets.However, top executives at Coffman are concerned that the firm will face fierce competition from foreign rivals because Coffman lacks significant core competencies.The executives are most likely worried that Coffman lacks ________.
A)capital advantages
B)internalization advantages
C)location advantages
D)ownership advantages
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Page 16
Chapter 15: Direct Investment and Collaborative Strategies
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Q1) A U.S.firm is acquiring an existing company in Germany rather than starting up a new foreign operation.Which of the following statements best supports this decision?
A)Because the German firm is performing poorly, there is a good turn-around opportunity.
B)The U.S. firm's U.S. facility is working at capacity.
C)Stock market prices have been very high in Germany.
D)The German firm has skilled personnel that the U.S. firm cannot hire at a good price on its own.
Q2) Which of the following describes a cross-licensing agreement?
A)allocation of exclusive rights to a licensee to prevent competition
B)an agreement between two or more companies not to compete in each other's home countries
C)an exchange of explicit knowledge for tacit knowledge
D)the exchange of intangible property rights between two or more companies
Q3) A greenfield investment is another name for a company's decision to ________.
A)acquire an interest in an existing foreign operation
B)implement sustainable marketing practices
C)construct a new facility in a foreign market
D)build a facility for a local company
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Page 17
Chapter 16: The Organization of International Business
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Q1) A hyperarchy is ________.
A)a form of structure with precise superior and subordinate relationships
B)a form of structure that relies on extensive centralization
C)a large-scale, self-organizing community
D)analogous to a hierarchy
Q2) ________ is a system of shared values about what is important and beliefs about how the world works among the employees of an organization.
A)Organizational system
B)Organizational structure
C)Organizational culture
D)Organizational vision
Q3) The character of a company's corporate culture is a product of the core values and business principles that management advocates, as well as the behaviors that define "how we do things around here."
A)True
B)False
Q4) Profile the idea and features of horizontal differentiation, paying particular attention to its implications to how managers design their company's structure.
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18
Chapter 17: Marketing Globally
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Q1) Antidumping regulations of the WTO allow countries to establish restrictions against any exports that fail to meet quality standards.
A)True
B)False
Q2) If a brand name becomes generic in one country, it becomes generic in other countries as well.
A)True
B)False
Q3) Which of the following is most likely to occur when a firm segments markets by country?
A)achieving objectives by following a sales orientation strategy within that market
B)initially targeting the high-income consumers within that market
C)overlooking similarities between different countries
D)introducing multiple products to assess demand
Q4) Although the broadening of product lines increases distribution efficiencies, too broad a line can create problems in selling.
A)True
B)False
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Chapter 18: Global Manufacturing and Supply Chain Management
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Q1) MedCo uses an IT system that labels a product with an electronic tag to provide real-time information.Which of the following does MedCo most likely use?
A)EDI (electronic data interchange)
B)RFID (radio frequency ID)
C)PTX (private technology exchange)
D)ERP (enterprise resource planning)
Q2) Onshoring is also knows as reshoring.
A)True
B)False
Q3) Why are the concepts of dependability and quality important when developing a global manufacturing strategy?
Q4) Gates Manufacturing is striving to improve its performance reliability, speed of delivery, and product reliability.Gates is most likely focusing on a(n)________ strategy.
A)flexibility
B)innovation
C)dependability
D)quality
Q5) Describe total quality management.
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Chapter 19: International Accounting and Finance Issues
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Q1) Sources of influence on accounting standards and practices include all of the following EXCEPT ________.
A)capital markets
B)regulatory environment
C)cultural environment
D)levels of exports
Q2) How do cultural values such as optimism, conservatism, transparency, and secrecy affect country differences in accounting systems?
Q3) The global integration of capital markets ________.
A)is a major force leading to the convergence of accounting standards
B)is a counterforce to regional political and economic harmonization
C)is being led by the strengthening of worldwide unions rather than investors
D)highlights the importance of maintaining differences in accounting worldwide
Q4) A company can hedge their foreign-currency risk by using ________ financial contracts such as forward contracts and options.
A)cash flow
B)multidomestic
C)lead
D)derivative
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Chapter 20: International Human Resource Management
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Q1) What problems do managers commonly encounter when repatriated from foreign assignments? How can HRM improve the repatriation process?
Q2) Shelly, a sales manager at Best Computers, has recently moved from Dallas to Hong Kong for an expatriate assignment.Shelly is feeling disoriented, irritable, and stressed about her new job and living arrangements in Hong Kong, which means that she is most likely experiencing ________.
A)uncertainty dislocation
B)melancholy
C)culture shock
D)cultural transition
Q3) List and discuss the main components of an expatriate's compensation package.
Q4) Historically, companies have not been particularly concerned with the challenge of repatriation in managing their international human resources.
A)True
B)False
Q5) Expatriates are locals from the country of the foreign subsidiary.
A)True
B)False
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