International Business Operations
Chapter Exam Questions
Course Introduction
International Business Operations explores the strategic, operational, and cultural aspects of conducting business across borders. The course examines the complexities of the global marketplace, including international trade theories, market entry strategies, supply chain management, cross-cultural management, legal and ethical considerations, and the impact of international economic and political environments on business decisions. Students gain insights into how multinational corporations structure their operations, adapt to diverse regulatory environments, and respond to global challenges, preparing them to effectively manage or support business activities in an international context.
Recommended Textbook
International Business The Challenge of Global Competition 13th Edition by Donald Ball\
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Page 2
Chapter 1: The Challenging World of International Business
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Q1) The United States has only about 10 percent of the world's population, so the vast proportion of most companies' potential customers are located elsewhere.
A)True
B)False
Answer: False
Q2) Reasons for international firms to enter into foreign markets are linked to which of the following desires?
A) Increased sales and reduced costs
B) Protecting sales and profits from being eroded by competitors
C) Creation of new markets.
D) all of the above.
E) two of A, B, and C.
Answer: D
Q3) Opponents of globalization argue that globalization has contributed to an improvement in environmental and health conditions.
A)True
B)False
Answer: False
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Page 3
Chapter 2: International Trade and Foreign Direct Investment
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Q1) The proportion of world commercial services exports accounted for by ___________ has evidenced an overall decline since 1980.
A) the European Union
B) Africa
C) the United States
D) all of the above
E) two of A, B, and C
Answer: E
Q2) Which of the following is explained by international trade theory?
A) Differences in production costs
B) Differences in levels of technology
C) Foreign exchange rates
D) Differences in efficiency of factor use
E) All of the above
Answer: E
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Page 4
Chapter 3: International Institutions From an International Business Perspective
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Q1) The major function of the World Bank is to serve as a:
A) nonprofit banking cooperative for its members to meet development needs.
B) central bank for the world's central bankers.
C) nonprofit cooperative to finance the educational needs of its members.
D) investor of funds in global businesses in order to create value for its shareholders.
Answer: A
Q2) Informal institutions are composed of sets of:
A) mandatory agreements, a bit like the mind's software.
B) orthodox accords whose goal is to establish rigor.
C) agreements that are for the most part written and taken for granted.
D) voluntary agreements.
Answer: D
Q3) The EU is a supranational body that has become, essentially, a regional government.
A)True
B)False
Answer: True
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Chapter 4: Sociocultural Forces
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Q1) In some countries people are relatively loosely connected and tend to focus on themselves and their immediate family. Hofstede would describe these countries as:
A) myopic.
B) xenophobic.
C) self-referential.
D) individualistic.
Q2) There are few cultural misunderstandings in the discipline of marketing.
A)True
B)False
Q3) Feminine cultures in Hofstede's dimensions care about relationships and are not focused on business success. It is quality of life that matters.
A)True
B)False
Q4) One danger of using the frameworks in this chapter is that if they are applied prescriptively, they may well lead to a sophisticated form of stereotyping. Explain this danger and suggest ways to avoid it.
Q5) Discuss Hall's high- and low-context framework, and suggest how it might be useful in an international business situation.
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Chapter 5: Natural Resources and Environmental Sustainability
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Q1) The International Energy Agency 2010 report observes that an energy revolution underway may well lead to:
A) a 27 percent drop in oil usage.
B) North America becoming the center of alternative energy research.
C) Africa and the Middle East increasingly relying on fossil fuels.
D) Europe relying increasingly on nuclear.
Q2) How does the notion of sustainable business compare to Milton Friedman's assertion that the focus of business should be only on the bottom line?
Q3) Wind power is sourced:
A) on land only.
B) on land and sea.
C) where altitudes permit.
D) in the Swiss Alps.
Q4) Sustainable business models:
A) incorporate a more socialist political approach to the marketplace.
B) have as a goal to ensure that the marketplace exists for future generations.
C) regard environmentalism as more important than profit.
D) A and C
Q5) Explain the concept of sustainability as applied to business, using examples.
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Chapter 6: Political and Trade Forces
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Q1) Trade restrictions violate the spirit of the WTO.
A)True
B)False
Q2) To hedge the terrorism risk, there are insurance, antiterrorist schools, and even companies to handle negotiations.
A)True
B)False
Q3) Subsidies that confer a benefit may well evoke countervailing duties.
A)True
B)False
Q4) Kidnap, ransom, and extortion are techniques often used by terrorists against which no insurance is available.
A)True
B)False
Q5) Nontariff barriers that are not quantitative can be divided into two groups, those that are established by the government participation in trade and those that are administrative.
A)True
B)False
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Chapter 7: Intellectual Property and Other Legal Forces
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Q1) The Foreign Corrupt Practices Act is U.S. legislation that:
A) outlines bribery practices that are allowed abroad but not in the United States.
B) prohibits bribery by American companies abroad.
C) allows bribery in foreign dealings when culturally sanctioned.
D) outlines and prohibits foreign bribery practices by foreign nationals in foreign nations. E) clearly states the basis for illegal bribery.
Q2) The degree to which a country's legal system is based on the rule of law makes no difference; it is personal relationships that matter in foreign environments.
A)True
B)False
Q3) By UN regulation, contracts cannot contain choice-of-law and choice-of-forum clauses.
A)True B)False
Q4) The United States avoids extraterritorial application of its laws.
A)True B)False
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Chapter 8: The International Monetary System and Financial Forces
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Q1) The Bretton Woods system worked until the late 1960s.
A)True
B)False
Q2) The SDR is:
A) a special deposit for corporate reimbursement.
B) special drawing rights, an international reserve asset.
C) a special deficit refund, made to compensate for currency devaluation.
D) a paper credit issued by the Bank for International Settlements.
Q3) World interest rates tend to vary across a small range because:
A) the IMF has been successful at promoting responsibility in the monetary sector.
B) world financial markets are integrated, so we see the law of one price at work.
C) bankers have low market appeal, given the financial crisis.
D) the BIS has coordinated monetary policy.
Q4) Who took the United States off the gold system?
A) President Eisenhower
B) President Kennedy
C) the Supreme Court
D) President Nixon
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Chapter 9: International Competitive Strategy
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Q1) Value chain analysis is an assessment conducted on the chain of interlinked activities of an organization or set of interconnected organizations, intended to determine where and to what extent value is added to the final product or service.
A)True
B)False
Q2) Performance measures are done to:
A) all of B, C, andD
B) measure the time the company takes to acculturate new employees.
C) determine if the strategy and its implementation are proceeding successfully.
D) As stated directly in the text.
E) two of B, C, and D.
Q3) A broad statement that defines the organization's scope is the mission statement.
A)True
B)False
Q4) Two prominent features of the strategic plan are sales forecasts and the mission statement.
A)True
B)False
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Chapter 10: Organizational Design and Control
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Q1) A decision to move production factors from one country to another would be:
A) affected by currency and political stability.
B) made cooperatively by subsidiary managers.
C) based on tax, labor supply, and market conditions.
D) all of the above.
E) two of A, B, and C.
Q2) The more familiar, or the more similar, conditions in the host country are perceived to be, the more likely headquarters is to rely on subsidiary management.
A)True
B)False
Q3) It is sensible for an IC to direct or allocate as much profit as reasonably possible to subsidiaries in countries with:
A) two of B, C, and
B) the least currency controls.
C) lower taxes.
D) B and C are correct, so A is the appropriate response.
E) all of B, C and D.
Q4) What is organizational design, and why is it an important topic for managers of international companies to understand?
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Chapter 11: Global Leadership Issues and Practices
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Q1) Included in the differences between a traditional team and a global team is the difference between:
A) one economic condition and many dissimilar economic conditions.
B) virtual and actual relationships.
C) hierarchy and flat structures.
D) individual and group goals.
E) assertive and aggressive goal setting.
Q2) Brake's leadership triad includes:
A) culture knowledge, foreign languages, and business acumen.
B) business, culture, and geographic acumen.
C) business knowledge, relationship skills, and personal effectiveness skills
D) self-discipline, motivational skills, and business skills.
E) personal, business, and motivational skills.
Q3) Research indicates that global leaders are born, not developed through experience or training.
A)True
B)False
Q4) Bridging involves seeing the other person's point of view.
A)True
B)False
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Chapter 12: Assessing International Markets
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Q1) Social desirability bias can be seen as a cultural problem when conducting market research.
A)True
B)False
Q2) Cultural problems and technical difficulties cause problems:
A) when preparing for field trips.
B) in the collection of secondary data.
C) in the collection of primary data.
D) during the economic/financial screening.
E) none of the above.
Q3) Discuss the use of market indicators.
Q4) In a personal interview or phone survey situation, some respondents want to help the interviewer out of politeness or just to please the interviewer. This is known as: A) market research.
B) response bias.
C) interviewer bias.
D) social desirability bias.
E) none of the above.
Q5) Discuss why imports do not completely measure market potential.
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Chapter 13: Entry Modes
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Q1) Alliances can allow a partner to acquire a firm's technological or other competencies, thereby raising important competitive concerns.
A)True
B)False
Q2) The Internet has made direct exporting much easier.
A)True
B)False
Q3) ________ alliances are driven by similarity and integration.
A) Strategic
B) Trading
C) Pooling
D) Equity-based
E) None of the above
Q4) Direct exporting is simpler than indirect exporting because it requires neither special expertise nor large cash outlays.
A)True
B)False
Q5) What is contract manufacturing, and what are the ways in which international firms employ contract manufacturing?
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Chapter 14: Export and Import Practices
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Q1) In FAS (free alongside ship, loading port) the buyer pays all the transportation and delivery expenses up to the ship's side and clears the goods for export. Risk passes at the ship's rail.
A)True
B)False
Q2) If assembly or manufacturing is done in an FTZ using imported components, no duties need to be paid when the finished product is imported.
A)True
B)False
Q3) Freight forwarders' responsibilities may include all of the following except:
A) booking space on a ship.
B) preparing the export documents.
C) verifying that the seller has money in the bank.
D) arranging to have the merchandise delivered to the port.
E) D and C.
Q4) Incoterms were created by the New York Chamber of Commerce and are revised every year.
A)True
B)False
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Chapter 15: Marketing Internationally
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Q1) The benefits from standardization of the marketing mix are lower costs, easier control, and reduction of time in preparing the marketing plan.
A)True
B)False
Q2) The various methods of communicating with the firm's publics to secure a favorable impression are:
A) advertising.
B) promotion.
C) public relations.
D) marketing.
E) none of the above.
Q3) Generally, the deeper the immediate market penetration desired, the greater the product modification must be.
A)True
B)False
Q4) Why is the closer integration of functions important for new product development?
Q5) Why do industrial products or services generally require less modification for international sales than do consumer products?
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Chapter 16: Global Operations and Supply Chain Management
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Q1) Backward vertical integration refers to:
A) the purchase of competitive firms.
B) the installation of production facilities to produce inputs for the production of final products.
C) the placing of minorities in charge of production processes.
D) the installation of production facilities to consume the outputs of the production system.
Q2) According to the text, which of the following is true?
A) Zara's competitive advantage comes from its stylish fashion design.
B) Zara's supply chain management processes are combined with a strategy of limited availability of its merchandise.
C) Two of A, B, and D
D) Both B and D are correct, so C is the appropriate answer.
E)All of A, B, and D.
Q3) Backward vertical integration establishes facilities to manufacture inputs used in the production of a firm's final product.
A)True
B)False
Q4) Discuss the problems associated with global sourcing.
Page 18
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Chapter 17: Managing Human Resources in an International Context
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Q1) The use of TCNs has become particularly prevalent in the developing countries.
A)True
B)False
Q2) Contract termination payments are:
A) made to induce the employee to quit.
B) made to induce the employee to work out the contract term.
C) frequently made for work in hardship areas.
D) two of the above.
E)none of A, B, and C.
Q3) Bonuses are payments made to compensate expatriates for the extra costs they must incur to live as well abroad as they did in the home country.
A)True
B)False
Q4) Qualifications for a good manager of an overseas operation should include:
A) all of B, C, and D.
B) being bicultural and bilingual.
C) knowing business practices in the home and host countries.
D)having more and different skills than domestic managers.
E) two of B, C, and D.
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Q5) Discuss the advantages and disadvantages of employing third-country managers.
Chapter 18: International Accounting and Financial Management
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Q1) Tax liability on foreign earnings is controlled by:
A) the tax treaties in place between the two relevant countries.
B) the tax rates in the local jurisdictions.
C) how the foreign operations of a company are organized.
D) negotiations between the company and the host country.
Q2) Although the international airline segment is competitive, British Air as it is today could not legally take over Delta or United.
A)True
B)False
Q3) There are four main types of FX risk: transaction, translation, economic, and arbitrage exposure.
A)True
B)False
Q4) Accounting is an objective, fact-based discipline and is not influenced by culture. A)True
B)False
Q5) Unanticipated shifts in exchange rates present risk to the international firm.
A)True
B)False
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