International Business Operations
Exam Materials
Course Introduction
International Business Operations explores the strategies, processes, and challenges associated with conducting business across national borders. The course examines key topics such as global market entry modes, international trade theories, cross-cultural communication, foreign exchange management, international supply chains, and the impact of political and legal environments on global operations. Students will gain an understanding of how multinational organizations adapt to diverse regulatory frameworks, manage risks, and leverage international opportunities, preparing them for effective decision-making in a rapidly globalizing business landscape.
Recommended Textbook
International Business Environments Operations 14th Edition by John Daniels
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20 Chapters
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1998 Flashcards
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Page 2
Chapter 1: Globalization and International Business
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Q1) Reebok pays a royalty to the German Soccer League to use the team's logo on t-shirts that it sells. Reebok and the German Soccer League most likely have a
A) turnkey operation contract
B) licensing agreement
C) portfolio investment
D) joint venture
Answer: B
Q2) Which of the following is NOT a likely reason to study international business?
A) Global events affect almost all companies.
B) Differences among countries in physical, social, and competitive conditions may cause companies to alter their operating methods from country to country.
C) Business conducted outside the confines of any one country is inexplicably on the decline.
D) Firms may be better able to obtain better or less expensive resources by operating internationally.
Answer: C
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Page 3
Chapter 2: The Cultural Environments Facing Business
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Sample Questions
Q1) Assume a U.S. firm plans to expand into either Mexico,Germany,or Japan. Its executives are traveling to each country to meet with local businesspeople in the decision-making process. Which of the following would be LEAST beneficial when the executives make a presentation?
A) requesting a translator with technical vocabulary knowledge
B) simplifying vocabulary and terminology for the audience
C) conducting back translations for written work
D) avoiding repetition to prevent boredom
Answer: D
Q2) A firm that begins operating in a culturally similar foreign country will most likely face few necessary cultural adjustments.
A)True
B)False
Answer: True
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) The largest percentage of nations,within a contiguous geographic region,that adhere to the rule of man are located in ________.
A) Central Africa
B) Northern Africa
C) Eastern Europe
D) Central America Answer: A
Q2) International companies often must customize products to comply with local standards if they are to do business in a particular country.
A)True
B)False Answer: True
Q3) Countries with a theocratic legal system encourage precise,detailed contracts whereas countries with a common legal system encourage shorter and less specific contracts.
A)True
B)False Answer: False
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Chapter 4: The Economic Environments Facing Businesses
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Q1) The two main categories in the balance of payments are the ________.
A) merchandise exchange account and the services account
B) external debt and the unilateral transfers account
C) merchandise trade account and the capital account
D) current account and the capital account
Q2) In the Economic Freedom Index,________ exhibit high economic freedom whereas ________ exhibit little to no economic freedom.
A) mixed economies; market economies
B) command economies; market economies
C) market economies; command economies
D) centrally planned economies; command economies
Q3) Between 2000 and 2008,China's economy grew at a faster rate than Japan's economy.
A)True
B)False
Q4) Communism primarily relies on a system of ________.
A) private business ownership
B) competitive pricing and marketing
C) market-generated supply and demand
D) government controlled economic activity
Page 6
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Chapter 5: Globalization and Society
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Q1) 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
Q2) Which of the following statements describes an inconsistency of the FCPA?
A) Facilitation payments are classified as bribery.
B) Facilitation payments are excluded from the FCPA's definition of bribery.
C) Payments to officials who are not directly responsible for carrying out the law are legal.
D) Payments to foreign officials who carry out the law are considered illegal by provisions of the FCPA.
Q3) Which of the following is a primary business objective for pursuing ethical behavior?
A) replacing home-country technology with host-country technology
B) minimizing federal investigations into corporate finances
C) avoiding being perceived as a socially irresponsible firm
D) imposing home-country behavior on the host country
Q4) 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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Q1) Under mercantilism,colonial powers sought to run trade surpluses with their colonies by preventing the colonies from manufacturing.
A)True
B)False
Q2) Which of the following is the LEAST likely result of outward migration?
A) Emigrants remit capital used to start businesses in their home countries.
B) Nations receive more foreign aid.
C) Nations lose highly educated and productive workers.
D) Countries receive remittances from emigrants.
Q3) Countries with varied climates and varied natural resources generally ________ than countries with less varied climates and natural resources.
A) have lower per capita incomes
B) depend less heavily on trade
C) have more ethnic subgroups
D) have higher endowments of capital relative to labor
Q4) A strategic trade policy is one that develops industries to lessen dependence on foreign military goods.
A)True
B)False
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Chapter 7: Governmental Influence on Trade
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Q1) A quota is a quantitative limit on the amount of a product that can be traded.
A)True
B)False
Q2) Assume a government places restrictions on a specific product from a specific foreign country. What would be the government's most likely concern about the foreign country's response?
A) the foreign producers raising the prices of their exports
B) the foreign country restricting its own imports
C) the foreign country restricting its exports in that industry
D) the foreign producers seeking other markets
Q3) Which of the following is NOT causing greater complexity in the regulation of trade?
A) growth in export tariffs
B) services available over the Internet
C) heightened concern about product safety
D) development of new products that must be classified
Q4) The most common type of tariff is the export tariff.
A)True
B)False
Q5) Describe and compare the different types of tariffs (duties).
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Chapter 8: Cross-National Cooperation and Agreements
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Q1) An NGO is ________.
A) an agency of the United Nations
B) a private institution independent of a government
C) any organization working on environmental issues
D) an organization that is concerned only with workers' rights
Q2) NAFTA is a good example of ________.
A) trade divestment
B) trade diversion
C) the theory of trade disruption
D) the theory of trade implementation
Q3) The formation of CARICOM has primarily been triggered by the desire of Jamaica,Trinidad,and Tobago to expand the region's market size and attract more FDI.
A)True
B)False
Q4) Are commodity agreements effective? Why or why not?
Q5) Which of the following was primarily responsible for establishing the euro?
A) Lisbon Treaty
B) Treaty of Maastricht
C) European Finance Act
D) Single European Act
10
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Chapter 9: Global Foreign-Exchange Markets
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Q1) Which of the following handles the majority of all foreign exchange activities?
A) multinational enterprises
B) commodities exchanges
C) commercial banks
D) regional banks
Q2) A letter of credit that provides an exporter with the guarantee of another bank in addition to the importer's bank is called ________.
A) a confirmed letter of credit
B) a time draft letter of credit
C) an amendable letter of credit
D) a cash in advance letter of credit
Q3) Which of the following best explains the increase in trading activity in recent years?
A) growing emphasis on hedge funds
B) availability of more global currencies
C) demands for immediate money access
D) advances in communication technology
Q4) What are the two major segments of the foreign exchange market? What types of foreign exchange instruments are traded within these markets?
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Chapter 10: The Determination of Exchange Rates
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Q1) What role has the IMF played in the Greek financial crisis of 2010-2011?
A) setting the value of the drachma
B) releasing funds for debt payments
C) demanding the sale of state-owned assets
D) lowering interest rates for international investors
Q2) An MNE would most likely benefit from converting local currency into its home-country currency when exchange rates are most favorable so it can maximize its return.
A)True
B)False
Q3) According to the text,which currency is expected to experience the most change in the upcoming years?
A) yen
B) yuan
C) euro
D) U.S. dollar
Q4) Technical forecasting relies on trends in economic variables to predict future exchange rates.
A)True
B)False
Page 12
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Chapter 11: The Strategy of International Business
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Q1) Which strategy champions worldwide consistency and standardization to support the firm's goal to become the low-cost leader?
A) international strategy
B) multidomestic strategy
C) global strategy
D) transnational strategy
Q2) Pressures for local responsiveness include cross-national differences in terms of consumer preferences,advances in technology,and government regulations.
A)True
B)False
Q3) Change in the long-term industry growth rate has the potential to transform an industry's structure.
A)True
B)False
Q4) The essence of a differentiation strategy is to ________.
A) target the most sophisticated segment of the market
B) incorporate the greatest number of features into a product
C) offer a unique product that supports a premium price
D) outspend rivals on product advertising
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Chapter 12: Country Evaluation and Selection
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Q1) A company's operations are most likely to be taken over by a host government when
A) the operations are relatively small and, thus, unlikely to incur the wrath of the company's home government
B) the operations are substantial and have a widespread effect on the country because of the company's size
C) the host country becomes involved in a regional war
D) the firm produces discretionary rather than essential products
Q2) A manager needs to prepare a grid to compare countries for location of the firm's international operations. It would be most useful for the manager to ________.
A) prepare an opportunity analysis in-house, but out-source the risk analysis
B) have agents within each country supply governmental data
C) prepare the risk analysis in-house, but out-source the opportunity analysis
D) use a team made up of people from different functions within the company
Q3) What are the major types of published data that managers can use to compare countries? Describe the tools available to managers for making country comparisons.
Q4) What problems are common with the published data available about different countries?
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Page 14
Chapter 13: Export and Import
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Q1) A major pitfall of exporting is misclassifying products in terms of the destination country's tariff schedule,thereby incurring a higher tax or slower delivery.
A)True
B)False
Q2) In conducting ________,a business sells goods directly to or through an independent domestic intermediary in the exporter's home country that exports the products to foreign markets.
A) direct exporting
B) global marketing
C) strategic planning
D) indirect exporting
Q3) This spring break you are planning to leave the U.S. and visit London,where you will stay in a hotel for 10 days. The London hotel will be performing a ________.
A) indirect merchandise export
B) merchandise export
C) service export
D) service import
Q4) What role does the customs agency of a government play?
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Page 15
Chapter 14: Direct Investment and Collaborative Strategies
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Q1) What is a key industry?
A) an industry that is locked up competitively by domestic producers
B) a turnkey operator specializing in the construction of infrastructure components
C) an industry that receives government subsidies
D) an industry that significantly affects the economy by virtue of its size or influence on other sectors
Q2) For the provider,management contracts offer the advantage of ________.
A) receiving income without making a capital outlay
B) increasing their merchandise exports
C) reducing their global taxes
D) better access to raw materials
Q3) Small economies are sometimes less successful than large countries in attracting FDI by raising import restrictions. What is the most likely reason for this?
A) Large economies impose higher trade restrictions.
B) Transportation costs are generally higher in small economies.
C) People in small economies are more nationalistic in their purchases.
D) Small economies frequently lack sufficient markets for large-scale production.
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16
Chapter 15: The Organization of International Business
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Sample Questions
Q1) Which tool is used by most firms to monitor the data linkages among product planning,parts purchasing,and inventory maintenance activities?
A) reports
B) clan controls
C) financial metrics
D) information systems
Q2) A firm's vertical differentiation determines where in its organization structure managers have decided to concentrate decision-making authority.
A)True
B)False
Q3) Which of the following begins with a company defining critical success factors and specifying objective targets and hard deadlines?
A) coordination by standardization
B) coordination by consensus
C) coordination by plan
D) coordination by intervention
Q4) What is the difference between a classical structure and a neoclassical structure? Provide examples of each type.
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Chapter 16: Marketing Globally
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Q1) Define price escalation in exporting and explain why it occurs.
Q2) When a company identifies a market segment on a global basis,such as a segment based on income,it will likely ________.
A) encounter a similar percentage of the population in each country within that segment
B) find that a niche market in one country may be a mass market in another
C) find that the market in each country is so dispersed that distribution is difficult
D) be aiming at a mass market in each country
Q3) All of the following are true about the Internet and electronic commerce EXCEPT which one?
A) Suppliers can deal more quickly with their customers.
B) It enhances companies' ability to differentiate their marketing methods by country.
C) Customers worldwide can quickly compare prices from different distributors.
D) To be successful, companies must be able to deliver efficiently what they sell over the Internet.
Q4) What is the gray market? Why are companies concerned about it?
Q5) In a short essay,compare push and pull promotional strategies.
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Chapter 17: Global Manufacturing and Supply Chain Management
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Q1) Some companies select locations in different countries to specialize in the production of parts or final goods,which is known as ________.
A) centralized manufacturing
B) the multidomestic approach
C) offshore manufacturing
D) rationalization
Q2) MedCo uses an IT system that labels a product with an electronic tag to provide realtime information. Which of the following does MedCo most likely use?
A) EDI (electronic data interchange)
B) RFID (radio frequency ID)
C) PTX (private technology exchange)
D) ERP (enterprise resource planning)
Q3) In order to assure the quality of its products,Samsonite ________.
A) performs only internal quality tests
B) relies only on independent quality-assurance tests
C) conforms its products to industry-set standards
D) uses both internal quality tests and independent quality-assurance tests
Q4) Why are the concepts of dependability and quality important when developing a global manufacturing strategy?
Page 19
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Chapter 18: International Accounting Issues
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Q1) Matt manages the sales unit at Global Electronics but has no control over input costs. The primary purpose of the sales division is to sell goods produced by another division at Global Enterprises. What is the most appropriate performance evaluation measure for Matt's division?
A) market share
B) profitability
C) net income as a percentage of sales
D) inventory costs as a percentage of sales
Q2) The price on the sale of goods from one member of a corporate family to another is known as a ________.
A) transfer price
B) sale/resale price
C) global price
D) multidomestic price
Q3) The International Accounting Standards Board is composed of international securities regulators and is attempting to harmonize accounting standards through issuing International Financial Reporting Standards.
A)True
B)False
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Page 20
Chapter 19: The Multinational Finance Function
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Q1) If a British company exports to a German company and the export is denominated in euros,which of the following is true?
A) The German company would experience a loss if the euro strengthens against the pound.
B) The British company would experience a gain if the euro strengthens against the pound.
C) The British company would not experience a gain or a loss because the sale is denominated in euros, not pounds.
D) Exports result in translation exposures but not transaction exposures.
Q2) Which of the following has extensive banking activities involving short-term financial transactions?
A) booking center
B) operational center
C) foreign exchange market
D) international regulatory market
Q3) You are the chief financial officer at an MNE. What are your main responsibilities in this position? What taxation issues have a significant effect on the decisions you make?
Q4) What is an offshore financial center? What are the main characteristics of OFCs?
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Chapter 20: International Human Resources
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Q1) Home-country nationals are ________.
A) used a great deal abroad by polycentric companies
B) citizens of the countries in which they are working
C) citizens of the country where the company is headquartered
D) noncitizens of the countries in which they are working
Q2) What types of employees are increasingly being chosen for expatriate assignments? What characteristics are firms seeking when selecting expatriates?
Q3) The HRM requirements of a(n)________ strategy is well matched with a polycentric staffing policy.
A) transnational
B) international
C) multidomestic
D) global
Q4) Practical predeparture training for the expatriate is often geared toward developing his or her sensitivities to overcome culture fright.
A)True
B)False
Q5) List and compare the three common methods of implementing a balanced compensation plan.
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