International Business Operations
Midterm Exam
Course Introduction
International Business Operations explores the strategies, structures, and processes that organizations use to conduct business across national borders. The course examines global business environments, including economic, legal, political, and cultural factors that influence international trade and investment. Students learn about entry modes, supply chain management, international marketing, and the operational challenges faced by multinational enterprises. By analyzing real-world cases and current trends, the course equips students with practical knowledge and critical thinking skills needed to effectively manage and compete in the dynamic global marketplace.
Recommended Textbook
International Business 7th Edition by Ricky
W. Griffin
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19 Chapters
2470 Verified Questions
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Page 2
Chapter 1: An Overview of International Business
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Sample Questions
Q1) Which of the following is the LEAST likely benefit to Olympic host cities?
A) enhanced media sponsorship
B) greater economic growth
C) improved infrastructure
D) increased tourism
Answer: A
Q2) Which of the following is not a common activity of MNCs?
A) owning and controlling foreign assets
B) buying resources in various countries
C) creating goods in a variety of countries
D) establishing foreign exchange rates
Answer: D
Q3) The ratio of international trade to economic activity has ________ since 1950.
A) risen slightly
B) risen dramatically
C) fallen slightly
D) remained about the same
Answer: B
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Chapter 2: Global Marketplaces and Business Centers
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Sample Questions
Q1) ________ is the dominant market for Canadian goods.
A) The European Union
B) The United States
C) China
D) Mexico
Answer: B
Q2) Because of its past colonial relationship, France has a competitive advantage in all of the countries listed below except ________.
A) Niger
B) Chad
C) Kenya
D) Senegal
Answer: C
Q3) Japan's economic success has been facilitated by its keiretsu.
A)True
B)False
Answer: True
Q4) Define the term invoicing currency.
Answer: Invoicing currency is the currency in which the sale of goods and services is denominated.
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Chapter 3: Legal, Technological, Accounting, and Political Environments
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Sample Questions
Q1) Under civil law, judges take on many tasks that lawyers would handle under common law.
A)True
B)False
Answer: True
Q2) Which country follows a "first to invent" patent policy?
A) United States
B) Japan
C) Germany
D) Hong Kong
Answer: A
Q3) A legal system that lacks due process, lacks appeals procedures, and prohibits banks from charging interest on loans is most likely based on ________.
A) common law
B) civil law
C) religious law
D) bureaucratic law
Answer: C
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Chapter 4: The Role of Culture
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Sample Questions
Q1) Language ________.
A) is the exclusive means by which a society's members communicate with each other B) shapes the attitudes its adherents have toward work, consumption, individual responsibility, and planning for the future
C) is the overall framework that determines the roles of individuals within a society, the stratification of the society, and the individuals' mobility within the society
D) stems from deep-seated beliefs about the individual's position in relation to his or her deity, the family, and social hierarchy
Q2) Which of the following countries is not considered a collectivist culture?
A) Singapore
B) New Zealand
C) Hong Kong
D) Pakistan
E) Taiwan
Q3) Culture is a learned behavior that is passed from one society member to another.
A)True
B)False
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Chapter 5: Ethics and Social Responsibility in International Business
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Sample Questions
Q1) What was the first action taken by Siemens after the firm was fined for numerous ethics violations?
A) implemented new hiring policies
B) changed the hierarchical structure
C) revised the code of ethics
D) replaced top executives
Q2) Which regulation seeks to protect individuals from human rights abuses and holds MNCs accountable for such abuses?
A) Foreign Corrupt Practices Act
B) Helms-Burton Act
C) Alien Tort Claims Act
D) Disclosure of Conflict Act
Q3) How do multi-national firms manage the ethical behavior of employees and maintain social responsibility towards organizational stakeholders?
Q4) According to the text, which of the following is NOT an ethical generalization?
A) Individuals have their own belief system about what is ethical and unethical.
B) People from the same cultural backgrounds usually have similar ethics.
C) National values have little influence on an individual's personal ethics.
D) Circumstances cause individuals to deviate from their ethical beliefs.
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Chapter 6: International Trade and Investment
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Sample Questions
Q1) Trade between two countries of goods produced by the same industry is known as interindustry trade.
A)True
B)False
Q2) In which stage of the international product life cycle does the innovating firm's country become a net importer of the product?
A) new product stage
B) maturing product stage
C) standardized product stage
D) never
Q3) Germany exports BMWs to the United States, and the United States exports Dell Computers to Germany. This is an example of ________.
A) mercantilism
B) diversification
C) interindustry trade
D) intraindustry trade
Q4) Why does Heineken rely on FDI for much of its internationalization strategy?
Q5) Why are the islands of Caribbean so important to the United States both as a source and a destination of investment?
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Chapter 7: The International Monetary System and the Balance of Payments
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Sample Questions
Q1) Special drawing rights, SDRs, are sometimes called ________.
A) gold-sterling
B) paper currency
C) paper gold
D) credit
Q2) The World Bank can only make a loan if there is a reasonable expectation that it will be repaid.
A)True
B)False
Q3) What is the primary purpose of the Multilateral Investment Guarantee Agency?
A) make soft loans
B) make hard loans
C) promote FDI in developing countries
D) provide investors with political risk insurance
Q4) The International Bank for Reconstruction and Development is also known as the ________.
A) World Bank
B) International Monetary Fund
C) Organization for Economic Cooperation and Development
D) Bretton Woods Treaty
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Chapter 8: Foreign Exchange and International Financial Markets
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Sample Questions
Q1) ________ is the riskless purchase of a product in one market for immediate resale in a second market in order to profit from a price discrepancy.
A) Commercial exchange
B) Foreign exchange
C) Arbitrage
D) Parity
Q2) ________ suggests that national differences in expected inflation rates yield differences in nominal interest rates among countries.
A) Two-point arbitrage
B) Three-point arbitrage
C) The international Fisher effect
D) The law of one market price
Q3) What is the international Fisher effect? Explain how it relates to the foreign-exchange market?
Q4) A person normally purchases items using the indirect exchange rate.
A)True
B)False
Q5) What are the different ways to establish an overseas banking operation?
Q6) Explain the theory of purchasing power parity. How does it affect arbitrage?
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Chapter 9: Formulation of National Trade Policies
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Sample Questions
Q1) The ________ holds that a country must be self-sufficient in critical raw materials, machinery, and technology or it will be vulnerable to foreign threats.
A) national defense argument
B) infant industry argument
C) industrial policy
D) strategic trade theory
Q2) Which of the following groups would not encourage a government to adopt fair trade policies?
A) domestic labor forces
B) communities where factories are located
C) domestic firms fighting foreign competitors
D) foreign competitors trying to establish a presence in the market
Q3) The harmonized tariff schedule is a detailed classification of imported goods.
A)True
B)False
Q4) Classical theories of trade assume that firms operate in perfectly competitive markets.
A)True
B)False
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Chapter 10: International Cooperation Among Nations
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Sample Questions
Q1) The ________ is an agreement to create a customs union among the governments of Argentina, Brazil, Paraguay, and Uruguay.
A) Mercosur Accord
B) ASEAN Free Trade Area
C) Andean Pact
D) Central America Common Market
Q2) Salvo Software develops computer games and business software systems that are popular throughout the world. Like many software firms, Salvo has experienced problems with illegal counterfeiting of its products. Given this concern, which of the following would be of most interest to Salvo?
A) TRIMS
B) BARS
C) TRIPS
D) GATS
Q3) The GATT is an agreement, not an organization.
A)True
B)False
Q4) Country X has violated its WTO obligations. How would the WTO handle the problem?
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Page 12
Chapter 11: International Strategic Management
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Sample Questions
Q1) A firm following the ________ views the world as a single marketplace.
A) multidomestic strategy
B) home replication strategy
C) transnational strategy
D) global strategy
Q2) Abelman Home Goods, an MNE, faces significant pressure to respond to local conditions but very little pressure to integrate globally. Which strategy would most likely be best for Abelman?
A) home replication strategy
B) transnational strategy
C) global strategy
D) multidomestic strategy
Q3) Global efficiencies are harder to obtain when a single unit of the firm is given world-wide responsibility for the task.
A)True
B)False
Q4) The mission statement clarifies the organization's purpose, values, and directions.
A)True
B)False
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Chapter 12: Strategies for Analyzing and Entering Foreign Markets
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Sample Questions
Q1) LVMH uses all of the following entry methods in its international operations except
A) acquiring small foreign firms
B) entering licensing agreements
C) establishing franchises
D) exporting products
Q2) Foreign direct investment offers both high profit potential and high financial risk.
A)True
B)False
Q3) Unlike an export management company, an international trading company
A) offers customer financing
B) facilitates customs documentation
C) manages international transportation logistics
D) participates in exporting and importing activities
Q4) Dunning's eclectic theory is useful in understanding which mode of entry to use.
A)True
B)False
Page 14
Q5) What is the difference between a brownfield strategy and a greenfield strategy? Do you think one strategy is better than the other? Explain.
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Chapter 13: International Strategic Alliances
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Sample Questions
Q1) Otis Elevator strives to enter emerging markets before competitors and work with local partners to minimize risks.
A)True
B)False
Q2) Why does Otis Elevator always seek local partners when it expands into new markets?
Q3) A financial alliance is formed primarily for the purpose of ________.
A) performing multiple tasks as quickly as possible
B) sharing a common manufacturing facility
C) generating technological change
D) reducing investment risks
Q4) What is a comprehensive alliance?
Q5) What are the three types of management agreements used for strategic alliances?
Q6) Under a delegated arrangement, partner firms are highly involved in the day-to-day operations of the venture.
A)True
B)False
Q7) What are the various forms that strategic alliances can take? What are the benefits of strategic alliances?
Page 15
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Chapter 14: International Organization Design and Control
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Sample Questions
Q1) The polycentric approach to management is most likely used by firms that
A) operate internationally the same way they do domestically
B) customize their operations for each foreign market in which they serve
C) analyze the needs of their customers worldwide and then adopt standardized operations for all markets they serve
D) adapt their marketing strategies for foreign markets, but not their finance strategies
Q2) Active subsidiary boards are most useful in which type of organization?
A) an M-form
B) a U-form
C) an H-form
D) an S-form
Q3) A group of managers from different parts of the world who are connected to one another in some way is called an informal management structure.
A)True
B)False
Q4) What are the competitive advantages associated with a global product design?
Q5) What are the three levels of international control?
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Chapter 15: Leadership and Employee Behavior in International Business
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Sample Questions
Q1) What motivates managers and employees in both uncertainty-avoiding and uncertainty-accepting cultures? How do the differences between these types of cultures affect team dynamics?
Q2) Xuan-Li, a manager at a Japanese electronics firm, has initiated a ringisho, which is currently circulating through his work group. Xuan-Li most likely generated the ringisho for the purpose of ________.
A) identifying potential group leaders
B) adhering to the firm's hierarchical structure
C) encouraging creative solutions to a problem
D) documenting a problem raised by management
Q3) Which theory says that behavior resulting in a positive outcome will likely be repeated under the same circumstances in the future?
A) reinforcement model
B) hierarchy of needs
C) expectancy theory
D) two-factor theory
Q4) As an international manager, how would you make a decision using the normative model of decision making?
Q5) What are the characteristics of a mature team?
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Chapter 16: International Marketing
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Sample Questions
Q1) Participating in international trade shows can be a good first step for firms beginning the internationalization process.
A)True
B)False
Q2) What are the advantages and disadvantages of customized international marketing?
Q3) How does culture affect an international firm's product policy? How can hiring local sales representatives help international firms overcome many cultural barriers in marketing?
Q4) Digitex, an MNE, customizes its marketing mix in each market that the firm enters to meet the idiosyncratic needs of customers in different foreign markets. What pricing policy does Digitex most likely use?
A) standard
B) two-tiered
C) market
D) global
Q5) Define medium and message in advertising.
Q6) What is the most common approach to personal selling?
Q7) What are the three factors firms must consider as they develop an advertising strategy?
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Chapter 17: International Operations Management
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Sample Questions
Q1) What function is LEAST likely performed in the management of international services operations?
A) capacity planning
B) distribution scheduling
C) facilities designing
D) location planning
Q2) What is international logistics and materials management? What factors differentiate domestic and international materials management?
Q3) The management of the flow of finished products, services, and goods from the firm to customers is called materials management.
A)True
B)False
Q4) Sourcing and procuring refer to ________.
A) supply chain management
B) production management
C) service operations management
D) integration management
Q5) What is the difference between operations management and supply chain management?
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Chapter 18: International Financial Management
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Sample Questions
Q1) Theresa, an importer, uses a variety of payment methods when paying for goods. Which of the following is most likely Theresa's LEAST preferred form of payment?
A) letter of credit
B) wire transfer
C) open account
D) payment in advance
Q2) You are a financial officer at an MNC. What types of foreign exchange risks do you frequently face? What capital budgeting techniques do you use to manage these risks?
Q3) The State Trading Corporation of India agreed to exchange wheat and other grains to Turkmenistan in return for cotton. What form of countertrade is this?
A) counterpurchase
B) barter
C) parallel barter
D) offset purchase
Q4) Explain the process of documentary collection as an international payment method.
Q5) What is a clearinghouse account? What are the benefits of using such accounts?
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Chapter 19: International Human Resource Management and Labor Relations
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Sample Questions
Q1) A tax equalization program is a means of ensuring the expatriate's after-tax income is similar to what it would be in the home country.
A)True
B)False
Q2) What term refers to people working and residing in countries other than their native country?
A) host country national
B) expatriate
C) nonpatriot
D) green card resident
Q3) Companies that view themselves as multidomestic are more likely to ________.
A) provide visas to third country nationals
B) decentralize decision making
C) employ parent country nationals
D) centralize decision making
Q4) The compensation package offered a host country national is equivalent to that offered to an expatriate manager for a position of roughly equal responsibility and power.
A)True B)False
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