Global Supply Chain Management
Pre-Test Questions
Course Introduction
Global Supply Chain Management explores the strategies, processes, and technologies used to efficiently manage the flow of goods, services, information, and finances across international markets. This course examines key concepts such as sourcing, logistics, inventory management, risk mitigation, and collaboration among global partners. Students will analyze the impact of globalization, international trade regulations, sustainability practices, and digital transformation on supply chain operations. Through case studies and real-world examples, learners gain practical insights into designing responsive, resilient, and competitive supply chains that create value for organizations operating in a global environment.
Recommended Textbook
International Business Competing in the Global Marketplace 8th Edition by Charles W. L. Hill
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Chapter 1: Globalization
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Q1) How has technological change affected global markets? What key innovations have changed the nature of how "we do business?"
Answer: Major advances in communication,information processing,and transportation technology have facilitated the globalization of markets and production.The microprocessor and the Internet have been central to the technology explosion.The development of the microprocessor vastly increased the amount of information that can be processed by individuals and firms,and the growth of the Internet has allowed companies to expand their global presence at a fraction of the cost of more traditional methods of business.
Q2) Firms based in _____ accounted for 14.7 percent of the stock of foreign direct investment in 2007,up from only 1.1 percent in 1980.
A)Asia
B)developing countries
C)United Kingdom
D)NAFTA region
Answer: B
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Chapter 2: National Differences in Political Economy
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Q1) Discuss the Foreign Corrupt Practices Act.
Answer: The Foreign Corrupt Practices Act was passed during the 1970s by the United States making it illegal for American companies to bribe a foreign government official in order to obtain or maintain business over which that foreign official has authority,and requires all public trade companies to keep detailed records that would allow determining whether a violation of the act has occurred.
Q2) The HDI is based on life expectancy at birth,educational attainment,and whether average incomes are sufficient to meet the basic needs of life in a country.
A)True
B)False Answer: True
Q3) The United Nations CIGS establishes a uniform set of rules governing certain aspects of the making and performance of everyday commercial contracts between sellers and buyers who have their places of business in different nations. A)True
B)False Answer: True
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Chapter 3: Differences in Culture
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Q1) Which of the following is not true regarding culture?
A)Culture is static
B)Culture is evolving
C)It is a system of values and norms that are shared among a group of people
D)It involves the knowledge and beliefs of people
Answer: A
Q2) A society is another name for a country.
A)True
B)False
Answer: False
Q3) Compare and contrast folkways and mores.
Answer: Folkways are the routine conventions of everyday life.Generally,folkways are actions of little moral significance.Folkways include rituals and symbolic behavior.In contrast,mores are norms that are seen as central to the functioning of a society and to its social life.Mores have much greater significance than folkways.Accordingly,violating mores can bring serious retribution.
Q4) People who violate folkways are considered to be evil or bad.
A)True
B)False
Answer: False
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Chapter 4: Ethics in International Business
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Q1) Social responsibility refers to the idea that businesspeople should consider the social consequences of economic actions when making business decisions,and that there should be a presumption in favor of decisions that have both good economic and social consequences.
A)True
B)False
Q2) Expatriate managers may experience more than the usual degree of pressure to violate their personal ethics.
A)True
B)False
Q3) When multinationals use their power in a positive way to increase social welfare,it is ethical.
A)True
B)False
Q4) The Enron debacle indicates that an organizational culture can legitimize behavior that a society would judge as unethical.
A)True
B)False
Q5) What is the veil of ignorance? Why is it important to business?
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Chapter 5: International Trade Theory
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Q1) China,deliberately keeping its currency value low against the U.S.dollar in order to sell more goods to the United States,and thus amass a trade surplus and foreign exchange reserves,is viewed by critics as following a:
A)zero-sum game.
B)neo-mercantilist policy.
C)positive-sum game.
D)free trade policy.
Q2) Assembly of electronic components is a relatively labor-intensive process requiring only low-skilled labor,and cost pressures are intense.As a result,final assembly may be carried out in a country such as the United States.
A)True
B)False
Q3) What is the basic message of the theory of comparative advantage?
A)Countries are similar in their ability to produce goods efficiently
B)International trade is rarely beneficial to a country
C)Potential world production is greater with unrestricted free trade than it is with restricted trade
D)Trade is a zero-sum game
Q4) Discuss the link between trade and economic growth.
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Chapter 6: The Political Economy of International Trade
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Q1) Discuss the infant industry argument for intervention in markets.What is GATT's position on the argument?
Q2) _____ are the highest rate that can be charged,which is often,but not always,the rate that is charged.
A)Ad valorem tariff rates
B)Tariff rents
C)Specific tariff rates
D)Bound tariff rates
Q3) After the Uruguay Round of GATT extended global trading rules to cover trade in services,the first two industries targeted for reform by the WTO were:
A)textiles and technology.
B)telecommunications and financial services.
C)automotives and aerospace.
D)agriculture and consulting services.
Q4) TRIPS regulations oblige WTO members to all of the following except:
A)grant and enforce patents lasting at least 20 years.
B)grant and enforce copyrights lasting 50 years.
C)comply with the rules within five years in the case of rich countries.
D)comply with the rules within 10 years in the case of the poorest countries.
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Chapter 7: Foreign Direct Investment
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Q1) The rise in FDI in the services sector is a result of all of the following except:
A)the general move in many developed countries away from manufacturing and toward services.
B)accelerating regulations of services.
C)many services cannot be traded internationally.
D)many countries have liberalized their regimes governing FDI in services.
Q2) Discuss the connection between foreign direct investment and multinational enterprises?
Q3) Identify the theory that seeks to explain why firms often prefer foreign direct investment over licensing as a strategy for entering foreign markets.
A)Internalization theory
B)Internationalization theory
C)Perfect markets theory
D)Small markets theory
Q4) FDI is seen by executives as a means of circumventing future trade barriers.
A)True
B)False
Q5) What is multipoint competition? How do firms respond to multipoint competition?
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Chapter 8: Regional Economic Integration
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Q1) Describe the state of economic integration in Africa.What factors have hindered the process?
Q2) In theory,WTO rules should ensure that a free trade agreement results in trade diversion.
A)True
B)False
Q3) The emerging role of the European Commission in competition policy suggests the EU is increasingly willing and able to intervene and impose conditions on companies proposing mergers and acquisitions.
A)True
B)False
Q4) In 1991,Argentina,Brazil,Paraguay,and Uruguay implemented an agreement known as:
A)NAFTA.
B)MERCOSUR.
C)APEC.
D)FTAA.
Q5) Discuss the economic case for economic integration.How does it relate to trade theory?
Q6) Briefly describe the four main institutions that make up the political structure of the EU.
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Chapter 9: The Foreign Exchange Market
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Q1) When a tourist changes one currency into another,the tourist is participating in the foreign exchange market.
A)True
B)False
Q2) How can a firm minimize its foreign exchange exposure?
Q3) The _____ argues that forward exchange rates do the best possible job of forecasting future spot rates and therefore investing in forecasting services would be a waste of money.
A)inefficient market school
B)efficient market school
C)Fisher Effect
D)international Fisher Effect
Q4) International businesses use foreign exchange markets for all of the following reasons except:
A)to receive payments from foreign investments that may be in foreign currencies.
B)to pay a foreign company for its products or services in its country's currency.
C)to invest for short terms in money markets when they have spare cash.
D)to cover themselves from all risks involved in currency speculation.
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Chapter 10: The International Monetary System
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Q1) Many of the world's developing nations peg their currencies,primarily to the dollar or the yen.
A)True
B)False
Q2) Under a strict currency board system,interest rates:
A)adjust automatically.
B)are constant.
C)decline consistently.
D)rarely move.
Q3) The financial crisis that erupted across Southeast Asia during the fall of 1997 emerged as the biggest challenge to date for the IMF.
A)True
B)False
Q4) Speculative buying and selling of currencies can create very volatile movements in exchange rates.
A)True
B)False
Q5) What two multinational institutions were established at the Bretton Woods agreement? What are their roles in the international monetary system?
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Chapter 11: The Global Capital Market
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Q1) When an investor purchases _____,he purchases the right to receive a specified fixed stream of income from the corporation for a specified number of years.
A)a corporate bond
B)a company share
C)eurocurrency bonds
D)equity holdings
Q2) In 1997,the stock markets of several Asian countries,including South Korea,Malaysia,Indonesia,and Thailand,lost over 50 percent of their value in response to the Asian financial crisis,while at the same time the S&P 500 increased in value by over 20 percent.This indicates that:
A)relatively low correlation exists between the movement of stock markets in different countries.
B)international diversification has failed in reducing the risks of global capital movement.
C)capital controls result in segmentation of different stock markets.
D)the integration of global capital disproportionately favors developed countries in Europe and America.
Q3) Trace the genesis and growth of the eurocurrency market.
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Chapter 12: The Strategy of International Business
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Q1) For a firm,all positions on the efficiency frontier are viable.
A)True
B)False
Q2) When the firm simultaneously faces both strong cost pressures and strong pressures for local responsiveness,the ideal strategy to follow is the transnational strategy.
A)True
B)False
Q3) A consumer surplus can be best described as:
A)what the consumer has "left-over" after a purchase.
B)how much extra a consumer has to pay for a product.
C)value for the money.
D)the premium charged for a quality product.
Q4) A strategy that focuses on increasing the attractiveness of a product is referred to as a(n):
A)differentiation strategy.
B)low cost strategy.
C)effectiveness strategy.
D)efficiency strategy.
Q5) Explain the concept of location economies.
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Chapter 13: The Organization of International Business
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Q1) What is horizontal differentiation?
A)The mechanisms that enable each subunit to operate independently
B)The formal division of the organization into subunits
C)The location of decision-making responsibilities within a structure
D)The mechanisms for coordinating subunits
Q2) Discuss the location of decision-making in a firm that is following a transnational strategy.
Q3) Discuss the relationship between a firm's control systems and a firm's incentive system.Why is this relationship important?
Q4) Consider the use of personal controls in international firms.In which type of firm is this control most common?
Q5) This structure encourages fragmentation of the organization into highly autonomous entities.
A)Worldwide area structure
B)Global matrix structure
C)Worldwide product structure
D)Global network structure
Q6) What are the basic principles for successful organizational change?
Q7) Why should a firm centralize its decision-making?
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Chapter 14: Entry Strategy and Strategic Alliances
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Q1) The threat of tariff barriers by the host government can make _____ very risky.
A)greenfield investment
B)franchising
C)licensing
D)exporting
Q2) The main advantage of greenfield investment is that it gives the firm a much greater ability to build the kind of subsidiary company that it wants.
A)True
B)False
Q3) To maximize the learning benefits of an alliance,partners should try to learn from each other and then disperse the knowledge within their own organizations.
A)True
B)False
Q4) Exporting may not be appropriate if lower-cost locations for manufacturing the product can be found abroad.
A)True
B)False
Q5) Briefly explain the advantages and disadvantages of franchising agreements.
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Chapter 15: Exporting,Importing,and Countertrade
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Q1) Describe the process involved in financing imports and exports using a letter of credit.Why has this system developed? What is the advantage of using this system?
Q2) A shotgun approach to exporting will almost always result in that firm becoming established in any one market.
A)True
B)False
Q3) Unless there is no alternative,large,diverse multinational enterprises should probably try to avoid countertrade deals.
A)True
B)False
Q4) The Department of Commerce has a _____ program,in which department representatives accompany groups of U.S.businesspeople abroad to meet with qualified agents,distributors,and customers.
A)best prospects
B)matchmaker
C)trade events
D)comparison shopping
Q5) Compare and contrast time drafts and sight drafts.
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Chapter 16: Global Production, Outsourcing, and Logistics
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Q1) A statistically based philosophy that aims to reduce defects,boost productivity,eliminate waste,and cut costs throughout a company is known as ISO 9000.
A)True
B)False
Q2) Discuss the role of information technology and the Internet in materials management.
Q3) Which of the following statements about products with high value-to-weight ratios is true?
A)They are relatively inexpensive and weigh a lot.
B)They are expensive and do not weigh very much.
C)Transportation costs usually account for a large percentage of their total costs.
D)They must be produced in multiple locations close to major markets.
Q4) A _____ is a grouping of various types of machinery,a common materials handler,and a centralized cell controller.
A)flexible machine cell
B)mass customization policy
C)lean production system
D)minimum efficient scale cluster
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Chapter 17: Global Marketing and RD
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Q1) Designing for manufacturing increases not only product quality,but also costs involved.
A)True
B)False
Q2) In a _____ retail system,a few retailers supply most of the market.
A)fragmented
B)dispersed
C)focused
D)concentrated
Q3) Pricing decisions around the world must be delegated to the managers of various national subsidiaries.
A)True
B)False
Q4) When distribution channels are short,firms should:
A)use a direct channel.
B)use a push strategy.
C)focus on consumer products or other standardized products.
D)focus on industrial products or other complex products.
Q5) What are the arguments for standardized advertising across international markets?
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Chapter 18: Global Human Resource Management
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Q1) Which dimension of Mendenhall and Oddou's study suggests that an expatriate with high self-esteem,self-confidence,and mental well-being is likely to succeed in a foreign job posing?
A)Self-orientation
B)Others-orientation
C)Cultural toughness
D)Perceptual ability
Q2) According to Mendenhall and Oddou,poorly-adjusted expatriates tend to be nonjudgmental and nonevaluative in interpreting the behavior of host-country nationals.
A)True
B)False
Q3) According to research,American companies experience an expatriate failure rate that is:
A)similar to that of Japanese firms.
B)similar to that of European companies.
C)higher than both European and Japanese enterprises.
D)lower than both European and Japanese multinationals.
Q4) What is the relationship between a firm's staffing policy and its corporate culture?
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Chapter 19: Accounting in the International Business
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Q1) Highlight the role of the European Union (EU)in harmonization of accounting standards in the EU.
Q2) This accounting method adjusts all items in a financial statement-assets,liabilities,costs,and revenues-to factor out the effects of inflation.
A)Current cost accounting
B)Operating profit method
C)Historic cost principle
D)Economic accounting
Q3) The impact of the IASB standards has probably been least noticeable in the United States because of policy directives that direct U.S.public companies to adhere to domestic standards.
A)True
B)False
Q4) According to Statement 52,"Foreign Currency Translation," the functional currency of an integral subsidiary is to be the home currency.
A)True
B)False
Q5) Describe the current cost accounting system.
Q6) Describe accounting in international business.What is accounting information?
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Chapter 20: Financial Management in the International Business
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Q1) How are dividend remittances used by firms to transfer funds from foreign subsidiaries to the parent company?
Q2) Political risk assessment is more art than science.
A)True
B)False
Q3) Different tax regimes can determine the relative attractiveness of debt and equity in a country.
A)True
B)False
Q4) A deferral principle specifies that parent companies are not taxed on foreign source income until they actually receive a dividend.
A)True
B)False
Q5) Define financial structure.Is it the same across various countries,if not why?
Q6) What are tax havens? What is their importance in international business?
Q7) What are transaction costs? How can they be reduced?
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Q8) The problem of blocked earnings is much more serious than it was previously.
A)True
B)False
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