International Business Environment
Question Bank
Course Introduction
The International Business Environment course explores the complex and dynamic landscape in which global enterprises operate. It examines the economic, political, legal, technological, and cultural factors that shape international markets and influence business strategies. Students will gain a comprehensive understanding of globalization, trade theories, market entry strategies, regional integration, and the impact of international organizations. By analyzing real-world case studies, the course prepares students to identify challenges and opportunities in diverse markets and develop skills necessary to navigate and succeed in the global business environment.
Recommended Textbook
Global Business 3rd Edition by Mike 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 would be an example of a top down innovation?
A) Lowering prices and features of existing products to meet emerging market needs
B) Launching a product in and for emerging economies
C) Adopting an innovation first in emerging economies and then diffusing it around the world
D) Introducing products from emerging markets into developed markets
Answer: A
Q2) Semiglobalization is primarily caused by the practice of total isolation.
A)True
B)False
Answer: False
Q3) Which of the following would be regarded as a dragon MNE?
A) MNEs from developed countries
B) MNEs belonging to the Triad economies
C) MNEs coming exclusively from the European Union
D) MNEs from emerging markets
Answer: D
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Page 3
Chapter 2: Understanding Formal Institutions: Politics, Laws, and Economics
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Sample Questions
Q1) Disabling formal institutes does not affect transaction costs.
A)True
B)False Answer: False
Q2) A copyright is an example of an intellectual property.
A)True
B)False
Answer: True
Q3) Contracts in civil law countries tend to be long and detailed compared to contracts in common law countries.
A)True
B)False
Answer: False
Q4) Proposition 1 of the institution-based view specifically concerns bounded rationality. A)True
B)False Answer: True
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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) Cultural intelligence emphasizes the understanding of informal institutions. A)True
B)False
Answer: True
Q2) Which of the following is/are the final phase of acquiring cultural intelligence?
A) Skills
B) Awareness
C) Knowledge
D) Divergence
Answer: A
Q3) Confucianism has been a leading philosophy in East Asian business ethics.
A)True
B)False
Answer: True
Q4) "Respect for institutional context" is one of the guiding principles proposed by business ethicist Thomas Donaldson.
A)True
B)False
Answer: True
Page 5
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Chapter 4: Leveraging Resources and Capabilities
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Sample Questions
Q1) Illustrate with examples the difference between OEMs,ODMs,and OBMs.
Q2) Briefly explain outsourcing and its different types.
Q3) _____ refers to a combination of resources and assets that enables a firm to gain a competitive advantage.
A) Core assets
B) Standard assets
C) Supplementary assets
D) Complementary assets
Q4) Organizational culture is an example of _____.
A) human resources and capabilities
B) physical resources and capabilities
C) organizational resources and capabilities
D) technological resources and capabilities
Q5) Describe the VRIO framework.
Q6) Original design manufacturers are firms that both design and manufacture products.
A)True
B)False
Q7) Identify the four categories of tangible resources that a firm can possess.
Q8) Articulate the benefits of offshoring.
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Chapter 5: Trading Internationally
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78 Flashcards
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Sample Questions
Q1) Which of the following is true of the absolute advantage theory of international trade?
A) It emphasizes relative advantage in one economic activity that one nation enjoys in comparison with other nations.
B) It divides the countries of the world into three categories based on innovation.
C) It advocates extensive government intervention in international trade.
D) It was the first theory that advocated free trade.
Q2) The theory of mercantilism viewed international trade as a zero-sum game.
A)True
B)False
Q3) Import quotas are a type of _____.
A) tariff barrier
B) nontariff barrier
C) voluntary export restraint
D) antidumping duty
Q4) The concept of opportunity cost is crucial to the theory of comparative advantage.
A)True
B)False
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Chapter 6: Investing Abroad Directly
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Sample Questions
Q1) Which of the following is a primary cost of FDI to home countries?
A) Loss of sovereignty
B) Increase in local competition
C) Capital outflow and job loss
D) Increased exports of components and services to host countries
Q2) Identify the benefits and costs of FDI to host countries.
Q3) If a firm engages in final assembly in its home operations,then which of the following operations of the firm in a foreign country would be considered a downstream vertical FDI?
A) Research and development
B) Components procurement
C) Marketing
D) Final assembly
Q4) Compared to licensing,FDI increases dissemination risks.
A)True
B)False
Q5) Compared to licensing,FDI provides more direct and tighter control over foreign operations.
A)True
B)False
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Chapter 7: Dealing with Foreign Exchange
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Sample Questions
Q1) Forward discount is a condition under which the forward rate of one currency relative to another currency is lower than the spot rate.
A)True
B)False
Q2) If one country's interest rate is high relative to other countries,the country will attract foreign funds.
A)True
B)False
Q3) A weak dollar makes it more expensive for US tourists when traveling abroad.
A)True
B)False
Q4) Describe what it means for a country to peg its currency to another,and give two benefits to adopting this policy.
Q5) The foreign exchange markets are influenced only by economic factors and free from the effect of social or political pressures.
A)True
B)False
Q6) Briefly explain the cause for the fall of the Bretton Woods System.
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Chapter 8: Capitalizing on Global and Regional Integration
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Sample Questions
Q1) The Euro is currently used in _____.
A) all EU member countries
B) all European countries
C) 17 EU countries
D) Schengen countries only
Q2) Which of the following is true of the Union of South American Nations (USAN)?
A) It is made of nations that are not present in either the Andean Community or Mercosur.
B) It is a proposed integration of Mercosur and the Andean Community.
C) It is a proposed free trade area integrating the Andean Community and ASEAN.
D) Its integration mechanism is modeled after the NAFTA.
Q3) In which of the following types of economic integration systems will the establishment of a common currency be possible?
A) Customs union
B) Economic union
C) Free trade area
D) Common market
Q4) All members of the EU have adopted the euro as their currency.
A)True
B)False
10
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Chapter 9: Growing and Internationalizing the Entrepreneurial Firm
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78 Flashcards
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Sample Questions
Q1) Entrepreneurs need to cultivate strong informal norms granting legitimacy to entrepreneurs.
A)True
B)False
Q2) ____ is the sale of products made by entrepreneurial firms in their home country to customers in other countries.
A) Direct exports
B) Letters of credit
C) Licensing
D) Indirect exports
Q3) Microfinance provides micro loans used to:
A) pay mortgages.
B) pay car loans.
C) start small businesses.
D) start subsidiaries.
Q4) Franchising is a type of internationalizing business model.
A)True
B)False
Q5) Explain the concept of microfinance.
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Chapter 10: Entering Foreign Markets
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Sample Questions
Q1) The non-equity mode of indirect exports has better control over distribution than direct exports.
A)True
B)False
Q2) Which of the following is true of modes of entry?
A) Non-equity modes require the establishment of independent organizations overseas.
B) Non-equity modes are methods used to enter a market in the home country.
C) Equity modes are indicative of relatively larger, harder-to-reverse commitments.
D) Equity modes do not require the establishment of independent organizations overseas.
Q3) Liability of foreignness is _____.
A) the positive perception of firms and products of the host country
B) the negative perception of firms and products of the home country
C) the inherent disadvantage foreign firms experience in host countries
D) the inherent advantage foreign firms experience in home countries
Q4) What are the two schools of thought that have emerged concerning cultural distances?
Q5) How do foreign firms crack new markets against strong local competition?
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Chapter 11: Managing Global Competitive Dynamics
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Sample Questions
Q1) _____ is defined as the extent to which a given competitor possesses strategic endowment comparable,in terms of both type and amount,to those of the focal firm.
A) Mutual forbearance
B) Game theory
C) Resource similarity
D) Collusion
Q2) Prisoners' dilemma is a type of game in which the outcome depends on two parties deciding whether to cooperate or to defect.
A)True
B)False
Q3) The United States has the world's oldest antitrust frameworks dating back to the 1890 Sherman Act.
A)True
B)False
Q4) Cartels are often labeled as anticompetitive and outlawed by antitrust laws.
A)True
B)False
Q5) What is resource similarity? How does it affect firm rivalries?
Q6) Explain the three drivers of counterattacks.
Page 13
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Chapter 12: Making Alliances and Acquisitions Work
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Sample Questions
Q1) Alliances permit firms to sequentially increase their investment should they decide to pursue acquisitions.
A)True
B)False
Q2) In the context of the motives for acquisition,from a resource-based view,the most important _____ rationale is to leverage superior resources.
A) managerial
B) synergistic
C) hubristic
D) collusive
Q3) The "O" in the VRIO framework indicates opportunity.
A)True
B)False
Q4) Importance of direct organizational monitoring and control is low in equity-based alliances.
A)True
B)False
Q5) Describe how partners in an alliance can combat opportunism.
Q6) Discuss few ways of improving the odds for acquisition success.
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Chapter 13: Strategizing,Structuring,and Learning around the World
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Sample Questions
Q1) The _____ structure is the opposite of the geographic area structure.
A) international division
B) global matrix
C) multidomestic
D) global product division
Q2) Social capital is the ability to recognize the value of new information,assimilate it,and apply it.
A)True
B)False
Q3) ____ is the informal benefits individuals and organizations derive from their networks.
A) Social capital
B) Micro-macro link
C) Absorptive capacity
D) Global mandate
Q4) Which of the following is a disadvantage of the home replication strategy?
A) It lacks local responsiveness.
B) It is organizationally complex and difficult to implement.
C) It focuses too much on the foreign country.
D) It has higher costs due to duplication of efforts in multiple countries.
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Chapter 14: Competing on Marketing and Supply Chain Management
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Sample Questions
Q1) Price elasticity refers to the changes in demand when price changes.
A)True
B)False
Q2) ____ requires firms to continuously monitor major geopolitical,social,and technological trends in the world,and reconfigure the supply chain accordingly.
A) Agility
B) Adaptability
C) Alignment
D) Aggregation
Q3) During the Industrial Revolution in the 18?? and 19?? centuries,residual service activities was often the secondary sector for organized economic activities.
A)True
B)False
Q4) Total cost of ownership is often explicitly evaluated prior to purchase decisions.
A)True
B)False
Q5) Elaborate on the triple As in supply chain management.
Page 16
Q6) List a few do's and don'ts to avoid blunders in international marketing.
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Chapter 15: Managing Human Resources Globally
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Sample Questions
Q1) Which of the following types of employees in MNEs are often known as locals?
A) Multinationals
B) Third-country nationals
C) Parent-country nationals
D) Host-country nationals
Q2) Disregarding nationality,a(n)_____ approach focuses on finding the most suitable managers,who can be PCNs,HCNs,or TCNs.
A) polycentric
B) ethnocentric
C) geocentric
D) regiocentric
Q3) Integrating individuals from two (parent and host)countries is a lot more complex than molding managers from a variety of nationalities.
A)True
B)False
Q4) In developed economies,a firm's key concern is to cut cost and enhance competitiveness to fight off low-cost rivals from emerging economies.
A)True
B)False
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Chapter 16: Financing and Governing the Corporation
Globally
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Sample Questions
Q1) Which of the following statements about governance mechanisms is misleading?
A) Governance mechanisms can be classified as voice-based and exit-based mechanisms.
B) As an external governance mechanism, private equity utilizes the stock market to discipline managers.
C) In general, boards are likely to use "carrots" before considering "sticks."
D) Product market competition complements the market for corporate control and the market for private equity.
Q2) Which of the following statement concerning principal-agent versus principal-principal conflicts is true?
A) Formal institutional protection is often lacking in principal-agent conflicts.
B) Courts are more protective of minority shareholder rights in principal-principal conflicts.
C) Manifestations in principal-agent conflicts take the form of expropriation.
D) Considering ownership pattern in principal-principal conflicts, often greater than 50 percent of equity is controlled by the largest shareholders.
Q3) Outline the principal-agent problems in an agency relationship.
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Page 18
Chapter 17: Managing Corporate Social Responsibility
Globally
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Sample Questions
Q1) The CSR advocates argue that firms and managers,if left to their own devices,will choose public interest over self-interest.
A)True
B)False
Q2) To attract investment,developing countries may enter a "race to the bottom" by lowering environmental standards and some may become "pollution havens."
A)True
B)False
Q3) A strategy that would only respond to CSR causes when required by disasters and outcries is called a(n)_____ strategy.
A) accommodative
B) proactive
C) reactive
D) defensive
Q4) _____ firms often build alliances with stakeholder groups.
A) Accommodative
B) Reactive
C) Defensive
D) Proactive
Page 19
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