International Business Operations
Study Guide Questions
Course Introduction
International Business Operations explores the strategies, structures, and processes involved in conducting commerce across national boundaries. The course examines key topics such as global trade theories, international market entry strategies, cross-cultural management, global supply chains, international financial systems, and regulatory environments. Students will gain insight into the complexities of operating in diverse international markets, the challenges of coordinating activities across multiple countries, and the impact of cultural, economic, and legal factors on business decisions. Through case studies and practical examples, this course prepares students to understand and manage the dynamic environment of global business operations.
Recommended Textbook
Global Business Today 8th Edition by
Charles W. L. Hill
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17 Chapters
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2491 Flashcards
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Chapter 1: Globalization
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Sample Questions
Q1) The WTO is seen as the lender of last resort to nation-states whose economies are in turmoil and whose currencies are losing value against those of other nations.
A)True
B)False
Answer: False
Q2) Which of the following statements is true about the former communist nations of East Europe and central Asia?
A) These countries show no commitment toward democratic and free-market policies.
B) These countries have completely moved away from the unstable totalitarian and authoritarian form of government.
C) These economies are yet essentially closed to Western international businesses.
D) Businesses in these economies tend to be characterized by high risks as well as high returns.
E) Compared to the rest of the world, the economies of many of the former Communist states are more developed.
Answer: D
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Chapter 2: National Differences in Political Economy
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Q1) Intellectual property laws stimulate innovation and creative work.
A)True
B)False
Answer: True
Q2) Product safety and product liability laws are enforced to protect:
A) intellectual property rights.
B) companies from their domestic competitors.
C) companies from their foreign competitors.
D) consumers.
E) product inventors.
Answer: D
Q3) Which of the following is most likely to be protected by a copyright?
A) A new manufacturing process invented in a company
B) A newly invented telecommunication device
C) Tangible property like land and building
D) Movies produced and directed by a person
E) A new type of car invented by an automobile company
Answer: D
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Chapter 3: Political Economy and Economic Development
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Sample Questions
Q1) Which of the following is most likely to be true about the overall attractiveness of a country as a potential market or investment site for an international business?
A) The potential long-run benefits of doing business in a foreign country are independent of the country's future economic growth rates.
B) The costs and risks associated with doing business in a foreign country are highest in economically advanced democratic nations.
C) Economic growth tends to be higher in a centrally planned command economy system than in a free market system.
D) The risks associated with doing business are low in developing nations where the governments have huge debts.
E) The costs and risks associated with doing business in a foreign country tend to be greater in politically unstable nations.
Answer: E
Q2) Economic freedom does not necessarily equate with political freedom.
A)True
B)False
Answer: True
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Chapter 4: National Differences in Culture
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Sample Questions
Q1) When a Japanese and a German businessperson get together to do business,it is most likely that they will communicate in _____ .
A) French
B) Spanish
C) English
D) Chinese
E) Arabic
Q2) Which of the following is the most dominant religion in the world in terms of numbers of adherents?
A) Judaism
B) Christianity
C) Islam
D) Buddhism
E) Confucianism
Q3) Dharma,karma,and nirvana are terms related to:
A) Confucianism.
B) Hinduism.
C) Judaism.
D) Islam.
E) Protestantism.
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Chapter 5: Ethics in International Business
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Sample Questions
Q1) In stating that all human beings are born free and equal in dignity and rights and that they are endowed with reason and conscience and should act towards one another in a spirit of brotherhood,Article 1 of the Universal Declaration of Human Rights echoes:
A) the Friedman doctrine.
B) naive immoralism.
C) cultural relativism.
D) Kantian ethics.
E) teleological theory.
Q2) In business ethics,the term "_____" refers to a fair and equitable distribution of economic goods and services.
A) global commons
B) zero-level distribution
C) normal distribution
D) just distribution
E) global equity
Q3) Compare and contrast cultural relativism and righteous moralism.
Q4) What kind of an organization culture should a business develop in order to foster ethical behavior?
Q5) Discuss John Rawls principles of justice.
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Chapter 6: International Trade Theory
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Sample Questions
Q1) Michael Porter argues that advanced factors are the most significant for competitive advantage.
A)True
B)False
Q2) Which of the following factor endowments would be classified as a basic factor by Michael Porter?
A) Communication infrastructure
B) Research facilities
C) Natural resources
D) Skilled labor
E) Technological know-how
Q3) Which of the following theories generates for government intervention and strategic trade policy?
A) Theory of absolute advantage
B) Theory of comparative advantage
C) Heckscher-Ohlin theory
D) New trade theory
E) Poduct life-cycle theory
Q4) Describe the shortcomings of the product life-cycle theory.
Q5) Describe the Leontief paradox.
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Chapter 7: The Political Economy of International Trade
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Sample Questions
Q1) Which of the following groups would benefit the most from receiving subsidies?
A) Governments
B) International organizations such as the WTO
C) Domestic producers
D) Importers
E) Foreign competitors
Q2) A particularly odd aspect of the Smoot-Hawley tariff-raising binge was that the United States was running a balance-of-payment surplus at the time and it was the world's largest _____ nation.
A) debtor
B) free-trade
C) importing
D) creditor
E) exporting
Q3) Subsidies are a trade policy instrument.
A)True
B)False
Q4) What conclusions can be derived from economic analysis of the effect of import tariffs?
Q5) Are tariffs levied only on imports?
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Chapter 8: Foreign Direct Investment
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Sample Questions
Q1) Indirect effects of FDI on employment in a host country arise when:
A) a foreign MNE employs a number of host-country citizens.
B) jobs are created because of increased local spending by employees of an MNE.
C) an MNE brings in managers from the home country for its operations in the host country.
D) an MNE recruits people from the host country for research and development.
E) an MNE sends it home country employees to host countries for training.
Q2) Services,such as telecommunications,retailing,and many financial services,where the service has to be produced where it is delivered,lend themselves well to exporting.
A)True
B)False
Q3) The WTO embraces the promotion of international trade in services.
A)True
B)False
Q4) Since World War II,the United States has been the largest source country for FDI,a position it retained during the late 1990s and early 2000s.
A)True
B)False
Q5) How can governments restrict the outward flow of FDI?
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Chapter 9: Regional Economic Integration
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Sample Questions
Q1) _____ refers to the pact among Argentina,Brazil,Paraguay,and Uruguay that originated in 1988 to establish a free trade area.
A) ASEAN
B) NAFTA
C) Mercosur
D) CARICOM
E) CAFTA
Q2) Which of the following is the economic level corresponding to the least integration?
A) A free trade area
B) A customs union
C) A common market
D) An economic union
E) A political union
Q3) The most significant impact of the North American Free Trade Agreement has not been to create the background for increased political stability in Mexico.
A)True
B)False
Q4) Describe the arguments for the North American Free Trade Agreement (NAFTA).
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Chapter 10: The Foreign Exchange Market
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Sample Questions
Q1) A U.S.company that imports laptop computers from Japan knows that in 30 days it must pay in yen to a Japanese supplier when a shipment arrives.The company will pay the Japanese supplier ¥150,000 for each computer,and the current dollar/yen spot exchange rate is $1 = ¥110.The importer can sell the computers the day they arrive for $1,600 each.However,the importer will not have the funds to pay the Japanese supplier until the computers have been sold.The importer enters into a 30-day forward exchange transaction with a foreign exchange dealer at $1 = ¥105.Which of the following will happen if the exchange rate after 30 days is $1 = ¥90?
A) The importer will earn a profit of approximately $236 per computer.
B) The importer will earn a profit of approximately $171 per computer.
C) The importer will earn a profit of approximately $65 per computer.
D) The importer will incur a loss of approximately $67 per computer.
E) The importer will incur a loss of approximately $105 per computer.
Q2) The foreign exchange market is a market for converting the currency of one country into that of another country.
A)True
B)False
Q3) Differentiate between a lead strategy and a lag strategy.
Q4) What is meant by carry trade? Why is it risky? Explain with an example.
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Chapter 11: The International Monetary System
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Sample Questions
Q1) All International Monetary Fund loan packages come with conditions attached.Elaborate.
Q2) Briefly describe the Bretton Woods agreement of 1944.
Q3) Which of the following is true of monetary contraction in a fixed exchange rate system?
A) It requires low interest rates.
B) It increases the demand for money.
C) It puts downward pressure on a fixed exchange rate.
D) It leads to an inflow of money from abroad.
E) It can lead to high price inflation.
Q4) Which of the following explains the rise of the dollar against most major currencies in the late 1990s,even though the United States was still running a significant balance-of-payments deficit?
A) Reduced government intervention in the foreign exchange market
B) Increased foreign investments in U.S. financial assets
C) Low real interest rates in the United States compared to the rest of the world
D) Increased exports as opposed to the imports
E) Increased communism in the United States
Q5) Describe gold standard and a balance-of-trade equilibrium.
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Chapter 12: The Strategy of International Business
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Sample Questions
Q1) Discuss the significance of value creation.According to Michael Porter,what are the two primary strategies for creating value?
Q2) What are the different ways in which a firm can benefit from global expansion?
Q3) Processes are the manner in which decisions are made and work is performed within the organization.
A)True
B)False
Q4) Labor productivity increases over time as individuals understand the most efficient ways to perform particular tasks.This is as a result of _____.
A) diminishing returns
B) location economies
C) economies of time
D) learning effects
E) an efficiency frontier.
Q5) What are the disadvantages of strategic alliances?
Q6) The ability to spread fixed costs over a large volume is one of the sources of economies of scale.
A)True
B)False
Page 14
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Chapter 13: Entering Foreign Markets
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Q1) Which of the following is an advantage of exporting as a mode of entry into foreign markets?
A) A firm can avoid the cost of establishing manufacturing operations in the host country.
B) A firm does not have to bear the development costs and risks associated with opening a foreign market.
C) A firm can earn returns from process technology skills in countries where FDI is restricted.
D) A firm has access to local partner's knowledge.
E) A firm has the ability to engage in global strategic coordination.
Q2) Large-scale entry allows an international firm to learn about a foreign market while limiting the firm's exposure to that market.
A)True B)False
Q3) What are the advantages and disadvantages of using joint venture as a mode of entry into a foreign market?
Q4) What are the consequences of an international firm entering a foreign market on a significant scale?
Q5) How should a firm choose between a greenfield venture and an acquisition?
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Chapter 14: Exporting, Importing, and Countertrade
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Q1) The _____ is a government organization that helps potential exporters.It employs 76 district international trade officers and 10 regional international trade officers throughout the United States as well as a 10-person international trade staff in Washington,DC.
A) Federal Trade Commission
B) U.S. Commercial Service
C) International Trade Administration
D) Small Business Administration
E) sogo shosha
Q2) Which of the following is an advantage of having a letter of credit?
A) It allows payment for merchandise after its delivery.
B) It facilitates an exporter to obtain pre-export financing.
C) It allows an exporter to get a higher price for his or her goods.
D) It helps exporters incur lower shipping costs.
E) It does not require the importer to pay any fee.
Q3) How does a lack of trust affect firms engaged in international trade? How can the problem be solved?
Q4) What are export management companies? What are their advantages and and disadvantages?
Q5) Describe the pros and cons of countertrade.
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Chapter 15: Global Production, Outsourcing, and Logistics
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Sample Questions
Q1) Geminia System,manufacturer of car components,wants to set up a system that will help in sending invoices to its customers once orders for input supply are placed.Which of the following should the company use to perform this function?
A) Computer-aided design system
B) Lean production
C) Just-in-time inventory system
D) Electronic data interchange
E) Social networking
Q2) Under a more traditional system as opposed to a just-in-time inventory system,warehousing parts for weeks before they are used:
A) reduces the total working capital required by a firm.
B) allows many defective parts to be produced before a problem is recognized.
C) results in a near error-free production process.
D) reduces the costs related to inventory holding.
E) reduces the need to write off excess unsold inventory against earnings.
Q3) Discuss the advantages and the disadvantages of just-in-time (JIT)inventory systems.
Q4) How do country-specific factors affect a country's attractiveness as a manufacturing base?
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Chapter 16: Global Marketing and R-D
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Q1) Firms based in _____ countries tend to build a lot of extra performance attributes into their products.
A) highly developed
B) least developed
C) highly-indebted
D) developing countries
E) agriculture-based
Q2) The expertise,competencies,and skills of established retailers in a nation,and their ability to sell and support the products of international business is referred to as channel exclusivity.
A)True
B)False
Q3) Which of the following is a characteristic of fragmented retail systems?
A) Long channels of distribution
B) Single-layer distribution systems
C) Lower sales call to sales order ratio
D) Relatively smaller sales force compared to concentrated retail systems
E) Promotion of direct interaction between retailers and firms
Q4) Discuss the arguments for and against standardized advertising.
Q5) Describe how cultural differences affect product attributes.
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Chapter 17: Global Human Resource Management
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Sample Questions
Q1) International trade secretariats have been less successful because of the:
A) similarity in the structure of unions on a global level.
B) common perception unions have about multinational companies.
C) reciprocal tax treaty.
D) competition between national unions to attract investment from international businesses.
E) retention of highly skilled tasks in the host country.
Q2) According to the results of a seminal study by R.L.Tung,what was the major reason for expatriate failure among European expatriates?
A) Personal or emotional problems
B) Inability to cope with overseas responsibilities
C) Poor pay
D) Inability of spouse to adjust to a new environment
E) Lack of technical competence
Q3) What is repatriation? What is its importance?
Q4) Define an expatriate manager.Describe the dimensions of self-orientation and others-orientation that predict success in a foreign posting.
Q5) Describe any two components of a typical expatriate compensation package.
Q6) Describe human resource management.
Page 19
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