Global Strategy
Exam Materials
Course Introduction
Global Strategy explores the frameworks, tools, and concepts essential for firms operating in international markets. The course examines how organizations create and sustain competitive advantage across diverse geographic regions, taking into account the complexities of globalization, cross-border competition, cultural differences, and economic and regulatory environments. Through case studies and real-world examples, students will analyze international market entry strategies, global value chain configuration, adaptation versus standardization, strategic alliances, and the management of global risks. By the end of the course, students will be equipped to formulate and implement strategies for success in the global business arena.
Recommended Textbook
International Business Environments Operations 14th Edition by John Daniels
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20 Chapters
1998 Verified Questions
1998 Flashcards
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Page 2
Chapter 1: Globalization and International Business
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Sample Questions
Q1) Some key ________ factors in a company's international business external environment are its product strategy and access to resources.
A) geographic
B) political
C) competitive
D) behavioral
Answer: C
Q2) A major criticism of offshoring is that it ________.
A) increases production costs
B) exchanges good jobs for bad jobs
C) threatens the sovereignty of larger countries
D) allows companies to avoid payment of any taxes
Answer: B
Q3) A joint venture is an example of a portfolio investment.
A)True
B)False
Answer: False
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Page 3
Chapter 2: The Cultural Environments Facing Business
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Sample Questions
Q1) When divergent cultures come in contact,________ occurs.
A) power distance
B) culture shock
C) cultural collision
D) group membership
Answer: C
Q2) The lack of cultural guidebooks and research specifically for international managers poses a significant problem for global firms.
A)True
B)False
Answer: False
Q3) In a country with a high masculinity score,people have a tendency to feel sympathy towards individuals who are unemployed or homeless.
A)True
B)False
Answer: False
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Page 4
Chapter 3: The Political and Legal Environments Facing Business
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Sample Questions
Q1) Laws on local business activities directly influence the operations of domestic and foreign companies in areas such as hiring and firing workers.
A)True
B)False
Answer: True
Q2) In a country that emphasizes collectivism,________.
A) the interests of the individual are more important than the interests of the state
B) one person or political party exercises absolute control over the political and economic systems
C) the needs of society and the needs of individuals are treated as equally important
D) the needs of society take precedence over individual freedoms
Answer: D
Q3) A democracy grants the voting citizenry the power to alter the laws and structures of government.
A)True
B)False
Answer: True
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Page 5
Chapter 4: The Economic Environments Facing Businesses
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Sample Questions
Q1) The BRICs are the strongest developed economies in the world.
A)True
B)False
Q2) Pender Pharmaceuticals is considering expanding overseas and is focusing primarily on the BRICs. Which of the following countries is one that Pender is considering?
A) Indonesia
B) Chile
C) Russia
D) Bangladesh
Q3) In computing GNI,the value of a Ford car that is manufactured in Mexico using capital from the United States would ________.
A) be added to the GNI of the United States as well as to the GNI and GDP of Mexico
B) not be added to the GNI of the United States but would be added to the GNI of Mexico
C) only affect the computation of GDP and have no bearing on GNI
D) be added to the GNI of the United States but not the GNI of Mexico
Q4) What is gross national income? How is it calculated? Illustrate your answer with a specific example.
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6
Chapter 5: Globalization and Society
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Sample Questions
Q1) What is the Foreign Corrupt Practices Act? How has this law affected ethical behavior among international businesses?
Q2) General Electric's Ecomagination initiative is responding in part to the fact that it is operating in many countries which require compliance with higher environmental standards than exist in the United States.
A)True
B)False
Q3) The Ethical Trading Initiative (ETI)is primarily focused on ________.
A) fair trade laws for undeveloped countries
B) tiered pricing by pharmaceutical firms
C) greenhouse gas emission reduction
D) employment practices of MNEs
Q4) According to utilitarianism,actions are moral if they produce the greatest amount of good for the greatest number of people.
A)True
B)False
Q5) Which stakeholders must companies satisfy? What role should stakeholders play in a firm's internal code of conduct?
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Chapter 6: International Trade and Factor Mobility Theory
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Sample Questions
Q1) As a leading exporter of luxury automobiles,Germany has built a strong reputation in engineering. Germany's trade most likely relies on a(n)________.
A) outward immigration restriction
B) natural advantage
C) acquired advantage
D) neomercantilist policy
Q2) Assume the following conditions: In the United States it takes 4 units of resources to produce a ton of potatoes and 5 to produce a ton of coal. In Canada it takes 6 units of resources to produce a ton of potatoes and 10 to produce a ton of coal. According to the theory of comparative advantage,________.
A) there would be no basis for trade
B) the United States should import potatoes from Canada and export coal to Canada
C) the United States should export both potatoes and coal to Canada
D) the United States should export potatoes to Canada and import coal from Canada
Q3) 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) People who argue for lifting the U.S. trade embargo with Cuba claim all of the following EXCEPT which one?
A) The embargo has not achieved its purpose of changing Cuba's economic and political system
B) U.S. companies lose Cuban sales to competitors from other countries.
C) Increased exposure to the United States would be a more effective force of change.
D) Cuba has largely become a market economy already.
Q2) The U.S. catfish industry successfully petitioned the U.S. government to require that catfish varieties imported from Vietnam be labeled as tra,basa,or pangasius. This is an example of which of the following?
A) an embargo
B) a tariff
C) a nontariff barrier
D) a direct price influence
Q3) Every time countries enter a new trading agreement,service trade tends to grow more rapidly than merchandise trade.
A)True
B)False
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Chapter 8: Cross-National Cooperation and Agreements
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Sample Questions
Q1) Very few commodity agreements are successful in bringing together supplier and consumer countries to stabilize commodity prices.
A)True
B)False
Q2) ________ integration is the political and economic agreements among countries that give preference to member countries to the agreement.
A) Global
B) Economic
C) Bilateral
D) Regional
Q3) NAFTA is an example of a common market.
A)True
B)False
Q4) Explain the static effects and dynamic effects of economic integration. What is the difference between trade creation and trade diversion resulting from economic integration?
Q5) What has been the impact of NAFTA on trade and employment in NAFTA nations?
Q6) Why is geography important to most regional trade agreements? Provide examples of RTAs to illustrate your answer.
Page 10
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Chapter 9: Global Foreign-Exchange Markets
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Sample Questions
Q1) In an FX swap,one currency is swapped for another on one date and then swapped back on a future date.
A)True
B)False
Q2) In which of the following transactions is one currency swapped for another on one date and then swapped back on a future date?
A) reverse transaction
B) spot transaction
C) FX swap
D) outright forward transaction
Q3) EBS and Reuters provide customers with electronic foreign exchange services as well as current market data.
A)True
B)False
Q4) The bid is the price at which the trader is willing to sell foreign currency.
A)True
B)False
Q5) What are the characteristics of the spot market? What institutions handle spot exchanges?
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Chapter 10: The Determination of Exchange Rates
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Sample Questions
Q1) In order to join the IMF,a country must contribute a certain sum of money,called a
A) special drawing right
B) trade balance
C) monetary reserve
D) quota
Q2) Technical forecasting relies on trends in economic variables to predict future exchange rates.
A)True
B)False
Q3) The International Fisher Effect implies that the country with the higher interest rate should have lower inflation.
A)True
B)False
Q4) Which of the following was NOT a result of the Smithsonian Agreement?
A) revaluation of currencies other than the dollar against gold
B) establishment of par values the quota system
C) devaluation of the dollar against gold
D) widening of exchange-rate flexibility
Q5) What is a Special Drawing Right (SDR)? How is it used?
Page 12
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Chapter 11: The Strategy of International Business
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Sample Questions
Q1) The strategy of a firm using an international strategy is likely to entail producing and marketing mostly standardized products worldwide,with some customization where and when necessary.
A)True
B)False
Q2) A global strategy tends to be more successful when ________.
A) buyers are looking for customized products at bargain prices
B) the industry's product is a commodity
C) entry barriers are low for new firms
D) suppliers have little bargaining power
Q3) Which of the following refers to the means by which management applies the systems that link a company's value activities,whether those activities are performed in one or in many countries?
A) configuration
B) logistics
C) coordination
D) core competency
Q4) Describe the two basic ways that companies can create value. What role does the value chain play in these methods?
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Chapter 12: Country Evaluation and Selection
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Sample
Questions
Q1) What is meant by liability of foreignness? How might this influence location and allocation decisions?
Q2) When planning international geographic expansion,decision makers use scanning to reduce the number of options available to a manageable number for further detailed analysis.
A)True
B)False
Q3) Which of the following is generally the most costly information source for companies?
A) individualized reports
B) reports from international agencies
C) reports from government agencies
D) published reports by accounting firms
Q4) Risks to companies from natural disasters and communicable diseases are
A) evenly distributed around the world
B) more complicated today because of publicity
C) a minor issue to global firms because of insurance
D) most prevalent in the poorest countries of the world
Q5) In a short essay,discuss liquidity preference as it relates to monetary risk.
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Chapter 13: Export and Import
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Sample Questions
Q1) Which of the following is NOT one of the common ways that trade intermediaries are paid by exporters?
A) commission rate
B) buy-sell basis
C) fixed salary
D) special event contribution
Q2) An exporter that implements a(n)________ strategy does so with the intent to develop its own international marketing capability.
A) indirect selling
B) freight forwarding
C) direct exporting
D) export intermediation
Q3) Export intermediaries are third-party firms that market products and services abroad on behalf of manufacturers,farm groups,and distributors.
A)True
B)False
Q4) What role does the customs agency of a government play?
Q5) What difficulties of exporting can be minimized by customs brokers?
Q6) What are export management companies,and how do they help potential exporters?
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Chapter 14: Direct Investment and Collaborative Strategies
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Q1) There are two ways companies can invest in a foreign country. They can either acquire an interest in an existing operation or construct new facilities. In a short essay,describe the advantages and disadvantages of each alternative.
Q2) When a large company and a small company enter a collaborative arrangement,________.
A) the large company is expected to contribute more to the arrangement
B) the large company is likely to be more active in the venture
C) the small company is more likely to view the collaboration's expansion as competition to itself
D) the small company is likely to be disadvantaged if legal action is necessary to solve a dispute
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
Q4) What motives do businesses have for entering into collaborative arrangements? What are some of the problems associated with collaborative arrangements?
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Page 16
Chapter 15: The Organization of International Business
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Sample Questions
Q1) A major benefit of the international division structure is ________.
A) the elimination of conflicts of interest among domestic and foreign operations
B) the integration of domestic and foreign operations
C) deemphasis of economies of scale
D) cost effectiveness
Q2) At Tyson Manufacturing,departments and units are organized around discrete business activities,such as finance,production,marketing,and human resources. Tyson most likely has a ________ structure.
A) network
B) matrix
C) functional
D) divisional
Q3) Neoclassical structures promote tightly connected networks both vertically and horizontally to ensure that strategic requirements are fulfilled.
A)True
B)False
Q4) How might centralization of decision making adversely affect local managers in an MNE?
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Chapter 16: Marketing Globally
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Sample Questions
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) Which of the following would be an example of a customer orientation in international marketing?
A) A cosmetics company bans animal testing of its products to gain goodwill.
B) A fruit company brands the bananas it sells in foreign and domestic markets.
C) A beer company makes non-alcoholic beer for a country that bans the sale of alcohol.
D) A plastics manufacturer makes some components to the specifications of a foreign company.
Q3) Define price escalation in exporting and explain why it occurs.
Q4) Which of the following would most likely indicate that a company should handle its own distribution?
A) high-volume sales and non-complex after-sales servicing
B) local customers and low-tech products
C) low sales volume and few business-to-business sales
D) global customers and high technology
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Chapter 17: Global Manufacturing and Supply Chain Management
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Q1) What has been the influence of Japan on supply chain management? In your answer,discuss the concepts of industrial clustering and quality.
Q2) Japanese ________ are groups of independent companies that work together to manage the flow of goods and services along an entire value chain.
A) chaebol
B) keiretsus
C) sigmas
D) kaizen
Q3) In a global supply chain,suppliers must be part of the manufacturer's organizational structure.
A)True
B)False
Q4) What are the advantages and disadvantages of global and domestic sourcing? What role does quality play in deciding between global and domestic sourcing?
Q5) What is a just-in-time inventory system? What are the implications of JIT for firms that use global sourcing?
Q6) Describe total quality management.
Q7) What are foreign trade zones? How are they used?
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Chapter 18: International Accounting Issues
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Sample Questions
Q1) Differences in culture,geography,and financial methods make it complicated for MNEs to identify cause-and-effect performance measures.
A)True
B)False
Q2) What are the four main ways that financial statements differ from country to country? What role has the IASB played in establishing global accounting standards?
Q3) In addition to hiding losses,Parmalat engaged in financial statement fraud to
A) pay shareholders
B) bribe government officials
C) support family-owned businesses
D) avoid paying high export/import tariffs
Q4) A major force leading to the convergence of accounting standards is ________.
A) a shareholder orientation towards FDI
B) the global separation of capital markets
C) MNEs' needs for foreign capital
D) pressures from the EU
Q5) In a brief essay,discuss the concepts of transfer pricing and hedging.
Q6) How do exchange rates affect budgets used to evaluate performance in MNEs?
Page 20
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Chapter 19: The Multinational Finance Function
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Sample Questions
Q1) Which of the following countries has the largest market for domestic bonds?
A) the U.K.
B) the U.S.
C) Japan
D) China
Q2) A Japanese company exports merchandise to a U.S. importer for ¥1,000,000 when the exchange rate is ¥107 per dollar. Payment is not due until the end of the month. At the end of the month,the exchange rate has moved to ¥105 per dollar,and the U.S. importer pays the Japanese exporter for the merchandise. From the standpoint of the U.S. importer,________.
A) there is no transaction exposure since they will sell the merchandise in the United States for dollars
B) the merchandise will be carried on the books at $93,468 (rounded)
C) the Japanese exporter will be paid $9,524
D) the exposure is considered to be a translation exposure, not a transaction exposure
Q3) The Eurocurrency market is a retail,rather than wholesale,market.
A)True
B)False
Q4) What is multilateral netting? What are the advantages of multilateral netting?
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Chapter 20: International Human Resources
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Sample Questions
Q1) An ethnocentric staffing policy is well matched with a multidomestic strategy.
A)True
B)False
Q2) According to the text,what is the most common concern that expatriates have before they move overseas?
A) reestablishing a social life
B) missing friends and family
C) learning a foreign language
D) adapting to the culture
Q3) Today,which of the following circumstances is LEAST likely to cause expatriate failure?
A) inability of the expatriate's family to adjust
B) resistance from the expatriate's partner
C) inadequate technical expertise
D) inability to adjust
Q4) Fundamentally,the task of HRM is putting the right person into the right job in the right place at the right time for the right salary.
A)True
B)False
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