International Business Environment
Final Test Solutions
Course Introduction
International Business Environment explores the complex and dynamic world in which global organizations operate. This course examines the economic, political, legal, technological, and cultural factors that shape international business activities and strategies. Students will analyze how global trends, trade agreements, regulatory frameworks, and emerging markets influence decision-making processes and competitive advantage. Emphasis is placed on understanding cross-border challenges, risk management, and adaptation to diverse business environments, preparing learners to navigate and succeed in the global marketplace.
Recommended Textbook
Global Business 4th Edition by Mike W. Peng
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17 Chapters
1326 Verified Questions
1326 Flashcards
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Page 2
Chapter 1: Globalizing Business
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78 Verified Questions
78 Flashcards
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Sample Questions
Q1) Which of the following countries is represented in the Triad of the global economic pyramid?
A) India
B) China
C) Japan
D) Russia
Answer: C
Q2) Semiglobalization is primarily caused by the practice of total isolation.
A)True
B)False
Answer: False
Q3) More than half the GDP produced by emerging markets comes from outside the BRIC countries.
A)True
B)False
Answer: False
Q4) Reverse innovation is an example of bottom up innovation.
A)True
B)False
Answer: True
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Chapter 2: Understanding Formal Institutions: Politics, laws, and Economics
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78 Flashcards
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Sample Questions
Q1) According to the institution-based view,managers and firms make choices outside institutional constraints.
A)True
B)False
Answer: False
Q2) Private ownership differs from state ownership in that in private ownership _____.
A) maximizing profits is the primary objective of a firm
B) protecting jobs and minimizing social unrest is the primary objective of a firm
C) establishing a firm is determined by government officials and bureaucrats
D) failing firms deemed too big to fail may be supported by taxpayer money indefinitely
Answer: A
Q3) Civil law uses comprehensive statutes and codes as a primary means to form legal judgments.
A)True
B)False
Answer: True
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4
Chapter 3: Emphasizing Informal Institutions: Cultures, ethics, and Norms
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78 Verified Questions
78 Flashcards
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Sample Questions
Q1) A(n) ____ is a set of guidelines for helping a firm make ethical decisions.
A) operating agreement
B) certificate of incorporation
C) mission statement
D) code of conduct
Answer: D
Q2) Which of the following is one of the three "middle-of-the-road" guiding principles proposed by business ethicist Thomas Donaldson?
A) Firms should try to export its home-country ethics to the global market.
B) Firms should not base their ethics on local institutions.
C) Firms should be culturally sensitive when conducting business abroad.
D) Firms should follow a universal ethical business code regardless of geography.
Answer: C
Q3) Dividing individuals of a society into hierarchical classes is an example of social stratification.
A)True
B)False
Answer: True
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Chapter 4: Leveraging Resources and Capabilities
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78 Flashcards
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Sample Questions
Q1) Which of the following value chain activities does an original equipment manufacturer perform?
A) Research and development
B) Product branding
C) Final assembly
D) Marketing
Q2) Captive sourcing is also known as _____.
A) business process outsourcing
B) foreign direct investment
C) securitization
D) domestic in-house activity
Q3) An original design manufacturer (ODM) differs from an original brand manufacturer (OBM) in that an ODM _____.
A) does not include final assembly in its organizational boundary
B) does not include research and development in its organizational boundary
C) does not include marketing in its organizational boundary
D) only executes design blueprints provided by other firms
Q4) Illustrate with examples the difference between OEMs,ODMs,and OBMs.
Q5) Articulate the benefits of offshoring.
Q6) Identify the four categories of tangible resources that a firm can possess.
Page 6
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Chapter 5: Trading Internationally
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78 Flashcards
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Sample Questions
Q1) By trying to be self-sufficient and producing a wide range of goods,_____ policies reduce the wealth of a nation in the long run.
A) absolute advantage
B) laissez faire
C) free trade
D) mercantilist
Q2) In the context of tariff barriers,deadweight costs = _____.
A) total inefficiency - net gain
B) net loss - net gain
C) total inefficiency - net loss
D) total inefficiency - net gain - net loss
Q3) Deadweight costs are net losses that occur when _____ are imposed.
A) import tariffs
B) import quotas
C) voluntary export restraints
D) local content requirements
Q4) The theory of mercantilism viewed international trade as a zero-sum game.
A)True
B)False
Q5) Discuss the political arguments against free trade.
Page 7
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Chapter 6: Investing Abroad Directly
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78 Flashcards
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Sample Questions
Q1) Which of the following is a benefit of FDI to home countries?
A) Decrease in competition between local firms
B) Capital outflow
C) Learning from operations
D) Creation of new jobs
Q2) Firms become MNEs because FDI provides OLI advantages that they otherwise would not obtain.
A)True
B)False
Q3) Dissemination risk refers to the cost that a firm has to endure even when its investment turns out to be unsatisfactory.
A)True
B)False
Q4) Which of the following political views treats FDI as an instrument of imperialism and as a vehicle for exploitation of domestic resources by foreign capitalists and firms?
A) Pragmatic nationalism
B) The free-market view
C) The radical view
D) The monopolistic view
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Chapter 7: Dealing With Foreign Exchange
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78 Verified Questions
78 Flashcards
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Sample Questions
Q1) Capital flight is a phenomenon in which a large number of individuals and companies exchange _____.
A) domestic goods for gold
B) gold for domestic goods
C) foreign currency for a domestic currency
D) domestic currency for a foreign currency
Q2) Hedging protects firms from spot market unpredictability.
A)True
B)False
Q3) Explain,with the help of examples,the three primary types of foreign exchange transactions.
Q4) In foreign exchange,a(n) _____ is said to have occurred when investors move in the same direction at the same time,like a herd.
A) placebo effect
B) bandwagon effect
C) edge effect
D) positive correlation
Q5) List the five underlying building blocks that determine the supply and demand of foreign exchange.
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Chapter 8: Capitalizing on Global and Regional Integration
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78 Verified Questions
78 Flashcards
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Sample Questions
Q1) The Doha Round primarily aimed at strengthening economic development in developed economies.
A)True
B)False
Q2) While emphasizing economic benefits,the most fundamental goal of global economic integration is to promote peace.
A)True
B)False
Q3) The Euro is currently used in _____.
A) all EU member countries
B) all European countries
C) 18 EU countries
D) Schengen countries only
Q4) The WTO differs from "GATT 1948" in that the WTO _____.
A) has trade in services as its primary trade focus
B) has provisions that allows members to review other members' trade policies
C) has no rules governing intellectual property rights
D) has no mechanism to settle member disputes
Q5) Discuss whether global and regional economic integration create more benefits or more challenges.
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Chapter 9: Growing and Internationalizing the Entrepreneurial Firm
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78 Verified Questions
78 Flashcards
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Sample Questions
Q1) Explain the resource-based views in light of their effect on entrepreneurial success.
Q2) Relative to licensing and franchising,_____ allow a firm to have better control of how its proprietary technology is used while entering foreign markets.
A) harvest and exit methods
B) foreign direct investments
C) indirect exports
D) direct exports
Q3) Explain the concept of microfinance.
Q4) Both formal and informal institutional constraints,as rules of the game,affect entrepreneurship.
A)True
B)False
Q5) ____ is a way to reach overseas customers by exporting through domestic-based export intermediaries.
A) Direct exports
B) Licensing
C) Indirect exports
D) Letters of credit
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Chapter 10: Entering Foreign Markets
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Sample Questions
Q1) The resource-based view suggests that firms need to take actions deemed legitimate and appropriate by the various formal and informal institutions governing market entries.
A)True
B)False
Q2) Efficiency-seeking firms go to countries that have _____.
A) an abundance of natural resources and related transport and communication infrastructure
B) a strong demand for their products and services
C) world-class innovations (innovative individuals, firms, and universities)
D) economies of scale and abundance of low-cost factors
Q3) What are the two schools of thought that have emerged concerning cultural distances?
Q4) Which of the following is a benefit of large-scale entries?
A) There are no losses even if these large-scale "bets" turn out to be wrong.
B) They have unlimited strategic flexibility in all markets.
C) They experience no liability of foreignness.
D) They demonstrate strategic commitment to certain markets.
Q5) Define a wholly owned subsidiary (WOS).What are the two primary means to set up a WOS?
Page 12
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Chapter 11: Managing Global Competitive Dynamics
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78 Verified Questions
78 Flashcards
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Sample Questions
Q1) Antitrust laws are only applicable to foreign firms.
A)True
B)False
Q2) Which of the following sets of words describes the initial set of actions a firm uses to gain competitive advantage and the other firm's response to it?
A) Tacit collusion, explicit collusion
B) Competition, cooperation
C) Attack, counterattack
D) Cooperation, signaling
Q3) ____ centers on cooperating through joint ventures with MNEs and sell-offs to MNEs.
A) Defender strategy
B) Extender strategy
C) Dodger strategy
D) Contender strategy
Q4) _____ is defined as a plan to raise prices after eliminating local rivals.
A) Dumping
B) Dodging
C) Collusion
D) Forbearing
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Chapter 12: Making Alliances and Acquisitions Work
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Sample Questions
Q1) The combination of operations and management of two firms to establish a new legal entity is called a(n) _____.
A) joint venture
B) merger
C) contractual alliance
D) acquisition
Q2) The first phase in an alliance dissolution is mediation by third parties.
A)True
B)False
Q3) Importance of direct organizational monitoring and control is low in equity-based alliances.
A)True
B)False
Q4) Which is the best-case scenario for a non-equity-based alliance?
A) High tacitness and low influence of formal institutions
B) Low potential as real options and low influence of formal institutions
C) High tacitness and high importance of direct organizational monitoring and control
D) Low tacitness and low importance of direct organizational monitoring and control
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Chapter 13: Strategizing,structuring,and Learning Around the World
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Sample Questions
Q1) Which of the following may be a hindrance to successful knowledge management?
A) Bonuses tied to measurable knowledge outflows and inflows
B) Investment in codifying tacit knowledge
C) Facilitation of informal social capital
D) Use of single-subsidiary-based incentives
Q2) The _____ strategy focuses on development and distribution of standardized products worldwide to reap maximum benefits from low-cost advantages.
A) transnational
B) localization
C) home replication
D) global standardization
Q3) Social capital is the ability to recognize the value of new information,assimilate it,and apply it.
A)True
B)False
Q4) Innovations flow only from the host countries to the home country in a transnational strategy.
A)True
B)False
Page 15
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Chapter 14: Competing on Marketing and Supply Chain Management
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78 Flashcards
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Sample Questions
Q1) Standardized promotion helps project a globally consistent message,but is expensive.
A)True
B)False
Q2) Ethnocentrism should be encouraged in international marketing.
A)True
B)False
Q3) Which of the following was viewed the tertiary sector for organized economic activities during the Industrial Revolution?
A) Agriculture
B) Residual service activities
C) Manufacturing
D) Retail
Q4) _____ shows how demand changes when price changes.
A) Price lining
B) Price fixing
C) Price elasticity
D) Price discrimination
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Q5) List the globally useful ways of segmenting according to customer categorization.
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Chapter 15: Managing Human Resources Globally
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Sample Questions
Q1) Non-native employees who work and reside in a foreign country are known as
A) host-country nationals
B) expatriates
C) multinationals
D) repatriates
Q2) MNEs pursuing localization strategy typically hire _____ as top managers at local subsidiaries.
A) parent-country nationals
B) multinationals
C) host-country nationals
D) third-country nationals
Q3) In an MNE,a perceived lack of talent and skills of HCNs often necessitates a(n) _____ approach.
A) regiocentric
B) telocentric
C) ethnocentric
D) polycentric
Q4) What are the potential issues that arise during repatriation?
Q5) Describe the different roles of expatriates.
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Chapter 16: Financing and Governing the Corporation
Globally
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78 Verified Questions
78 Flashcards
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Sample Questions
Q1) In firms with separation of ownership and control,ownership is concentrated with a few owners.
A)True
B)False
Q2) The board of directors' effectiveness in serving the control function stems from their independence,deterrence,and norms.
A)True
B)False
Q3) In the context of internal governance mechanisms,if accounting-based measures are adopted,stock prices are subject to too many forces for a manager to manipulate the price.
A)True
B)False
Q4) Corporations in _____ are market-oriented,high-tension systems.
A) Japan
B) continental Europe
C) the United States
D) China
Q5) Explain the role of the Board of Directors.
Page 18
Q6) Elaborate on the external governance mechanisms.
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Page 19
Chapter 17: Managing Corporate Social Responsibility
Globally
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Sample Questions
Q1) Suppliers and customers are secondary stakeholders.
A)True
B)False
Q2) An accommodative strategy focuses on regulatory compliance.
A)True
B)False
Q3) A(n) _____ strategy is indicated by relatively little or no support by top management of CSR causes.
A) proactive
B) defensive
C) accommodative
D) reactive
Q4) Constituents on which the firm relies for its continuous survival and prosperity are _____ groups.
A) primary stakeholder
B) secondary stakeholder
C) tertiary stakeholder
D) corporate parenthood
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Q5) Elaborate on the resource-based view to CSR.
Q6) Elaborate on the environmental standards debate concerning CSR.
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