International Business Strategy Practice Exam
Course Introduction
International Business Strategy explores the frameworks, concepts, and tools necessary to analyze and develop strategies for companies operating in the global marketplace. This course examines the complexities of cross-border operations, the impact of cultural, political, and economic differences on business decisions, and the strategic options available for firms seeking to gain a competitive advantage internationally. Students will learn about entry strategies, global value chain management, international market selection, and adaptation versus standardization of products and services. The course also addresses current trends and challenges in international business, including global risk management, sustainability, ethical considerations, and the role of digital transformation in shaping international strategies.
Recommended Textbook
International Business The New Realities 4th Edition by S. Tamer Cavusgil
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Chapter 1: Introduction: What Is International Business
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Sample Questions
Q1) The level of government intervention in commercial activities is similar across most countries.
A)True
B)False
Answer: False
Q2) In the past, international trade and investment activities were mainly conducted by companies that sold services.
A)True
B)False
Answer: False
Q3) Each of the following has contributed to the rapid growth of trade among nations EXCEPT ________.
A)the growth of emerging market countries
B)the increase in trade barriers
C)advances in information technology
D)the liberalization of markets
Answer: B
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Chapter 2: Globalization of Markets and the
Internationalization of the Firm
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Sample Questions
Q1) Which of the following statements most likely to counters Juan's argument concerning the homogenization of national cultures?
A)As globalization standardizes superficial aspects of life across national cultures, people resist these forces by insisting on their national identity and taking steps to protect it.
B)Foreign values tend to shift not just superficial aspects of culture, but deeply held beliefs as well.
C)Material goods such as cell phones and computers are found in most homes throughout the world.
D)In most industries, domestic operation alone cannot sustain competitive business growth.
Answer: A
Q2) Offshoring and the flight of jobs are prime drivers of market globalization.
A)True
B)False
Answer: False
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Chapter 3: The Cultural Environment of International Business
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Sample Questions
Q1) In the advanced economies, firms that engage in services such as lodging and retailing account for a much lesser share of FDI than firms that manufacture products.
A)True
B)False
Answer: False
Q2) ________ is the most populous Muslim country in the world.
A)Saudi Arabia
B)Iran
C)Egypt
D)Indonesia
Answer: D
Q3) English is the most common primary language in the world.
A)True
B)False
Answer: False
Q4) Culture refers to the inherited attitudinal traits of an individual.
A)True
B)False
Answer: False
Page 5
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Chapter 4: Ethics, Corporate Social Responsibility,
Sustainability and Corporate Governance
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Sample Questions
Q1) Relying on one's instincts is often the best way to identify an ethical problem.
A)True
B)False
Q2) Evaluation of results is the last step of the framework for arriving at ethical decisions.
A)True
B)False
Q3) Hudson uses a distinctive sign to enable its customers to easily identify its products. This distinctive sign that the company also uses to distinguish its offerings from that of its competitors is known as a ________.
A)patent
B)copyright
C)trademark
D)users' license
Q4) When it comes to ensuring ethical behavior, experienced managers follow a systematic process.
A)True
B)False
Q5) In a short essay, explain the concept of CSR. List some typical CSR values.
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Chapter 5: Theories of International Trade and Investment
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Sample Questions
Q1) Countries cannot create or acquire comparative advantage.
A)True
B)False
Q2) In a short essay, explain the absolute advantage principle. Provide an example of the principle at work.
Q3) In a short essay, explain why the comparative advantage principle is the foundation and overriding justification for international trade. How does this principle support the competitive advantage of nations theory?
Q4) The eclectic paradigm specifies three conditions that determine whether a company will internationalize via FDI. Which of the following refer(s)to one of those conditions?
A)entrepreneurial orientation of national enterprises
B)FDI stock
C)availability of variable capital in the home country
D)location-specific advantages
Q5) Entrepreneurial orientation and availability of venture capital are examples of country-specific advantages .
A)True
B)False
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Chapter 6: Political and Legal Systems in National Environments
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Q1) Which of the following legal systems is based on legal precedents and past practices set by the nation's courts through interpretation of statutes, legislation, and past rulings?
A)common
B)religious
C)socialist
D)civil
Q2) Which of the following statements is most likely applicable to Country B?
A)local and national legislatures pass laws
B)ethics and morality are the underlying tenets
C)an all-inclusive system of law that has been codified
D)detailed contracts that clearly state all potential contingencies
Q3) Trade unions are part of a country's legal system.
A)True
B)False
Q4) In a market economy, the government may intervene to address the inequalities that market economies sometimes produce.
A)True
B)False
Q5) What is transparency? Explain how transparency varies around the world.
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Chapter 7: Government Intervention and Regional Economic Integration
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Sample Questions
Q1) Import tariffs are a principle instrument of trade intervention. In a short essay, briefly describe the five main types of import tariffs.
Q2) Governments support domestic industries by ________.
A)incentivize dumping
B)increase the costs of production of domestic industries
C)alienate domestic industries
D)adopting procurement policies that restrict purchases to home-country suppliers
Q3) Nations pursuing regional integration seek to ________.
A)increase the scale of the marketplace for firms inside the economic bloc
B)help firms increase the scale of operations and enhanced productivity
C)attract direct investment from outside the bloc
D)all of the above
Q4) Governments impose offensive barriers to ________.
A)protect domestic industries
B)promote national security
C)increase employment
D)safeguard the interests of special interest groups
Q5) What has NAFTA accomplished for its members?
Q6) In a short essay, explain how the GATT changed international trade.
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Chapter 8: Understanding Emerging Markets
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Sample Questions
Q1) Which of the following emerging market economies has the highest median household income ?
A)Indonesia
B)Turkey
C)China
D)India
Q2) Businesses in emerging markets are far less important targets for machinery and equipment sales compared to those in advanced economies.
A)True
B)False
Q3) The strategies that MNEs developed decades ago and refined in mature advanced-economy markets are considered most suitable for achieving success in emerging markets.
A)True
B)False
Q4) In a short essay, describe some of the risks and challenges of doing business in emerging markets. What strategies help firms enter emerging markets successfully?
Q5) Write a short essay on technology and emerging markets.
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Chapter 9: The International Monetary and Financial Environment
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Sample Questions
Q1) Explain how a nation's economic growth is measured and what stimulates economic growth. What is the central bank, and how does it affect economic growth?
Q2) The most universally accepted currencies for international business transactions are the British pound, European euro, Japanese yen, and U.S. dollar, which are all considered hard currencies.
A)True
B)False
Q3) A U.S. company buys from a supplier whose currency is increasing against the dollar. Which of the following will the company most likely have to do if the purchasing price is expressed in the supplier's currency?
A)pay less in dollars than originally expected
B)pay more in dollars than originally expected
C)pay the same amount of dollars as originally expected
D)pay part of the transaction in the supplier's currency
Q4) Capital flight from a country enhances its ability to service debt and pay for imports.
A)True
B)False
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Chapter 10: Financial Management and Accounting in the Global Firm
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Sample Questions
Q1) ________ is the number of units of foreign currency obtained for one unit of domestic currency.
A)Indirect quote
B)Prime rate
C)Direct quote
D)Repo rate
Q2) Which of the following is a direct tax?
A)customs tax
B)corporate income tax
C)VAT
D)sales tax
Q3) Which of the following most likely supports the purchase of Maple Leaf by FEG?
A)Canadian and U.S. accounting systems and regulations are harmonized.
B)Maple Leaf financial records lack transparency despite tax audits.
C)Currency traders anticipate FEG will need to hedge the Canadian dollar.
D)FEG should be able to attain a fronting loan for the purchase of Maple Leaf.
Q4) Speculators are currency traders who seek profits by investing in currencies with the expectation their value will change in the future.
A)True
B)False
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Chapter 11: Strategy and Organization in the International Firm
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Sample Questions
Q1) A multidomestic industry is one in which competition takes place on a regional or worldwide basis.
A)True
B)False
Q2) Coordinating the international value-chain activities of a firm across multiple countries to achieve maximum efficiency is known as ________.
A)local responsiveness
B)global integration
C)adaptation
D)country-by-country responsiveness
Q3) In which of the following are substantial autonomy and decision making authority delegated to a firm's subsidiaries around the world?
A)decentralized approach
B)global strategy
C)transnational strategy
D)nationalization
Q4) Describe four traits that characterize visionary leaders, and explain why these traits are especially necessary for a firm that operates within a global matrix structure.
Page 13
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Chapter 12: Global Market Opportunity Assessment
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Sample Questions
Q1) Which of the following factors should most likely be considered by Brown consultants as they screen countries for All You Cosmetics?
A)Which markets have the highest number of skin cancer cases among women?
B)In which markets are women the primary breadwinners for their families?
C)Which markets have the highest number of environmentally-friendly corporations?
D)In which markets are organic cosmetics and skin care products currently unavailable?
Q2) Explain why it is especially critical for a firm to select the most appropriate market for its product or service during the primary stage of internationalization. What are the negative consequences of making a poor market selection for firms planning to globalize through FDI?
Q3) Global market opportunities depend on timing and location, and they often enhance a firm's performance.
A)True
B)False
Q4) Describe the variables used to identify the best markets for FDI entry. Which countries are popular for FDI entry? Why are they popular?
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Chapter 13: Exporting and Global Sourcing
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Sample Questions
Q1) Compared to other entry strategies, exporting minimizes risk and maximizes flexibility.
A)True
B)False
Q2) Back-office activities consist of downstream, customer-related services.
A)True
B)False
Q3) In the decision about whether to outsource, research and development is considered of low importance to a firm.
A)True
B)False
Q4) Global sourcing hinders firms from freeing expensive analysts, engineers, and managers from routine tasks.
A)True
B)False
Q5) Exporting and importing collectively refers to international trade.
A)True
B)False
Q6) What are the benefits of global sourcing?
Q7) Discuss the major risks associated with global sourcing.
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Chapter 14: Foreign Direct Investment and Collaborative Ventures
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Q1) Firms often follow their key customers abroad to preempt other vendors from serving them.
A)True B)False
Q2) In the context of attaining economies of scope, using individual managers in each European country is more efficient that using the same base of managers all over Europe.
A)True B)False
Q3) Discuss three reasons for firms seeking new market opportunities. Illustrate each with an example of a firm that sought a new foreign market for that particular motive.
Q4) Equity joint ventures have the simplest management structure.
A)True B)False
Q5) Discuss resource and asset-seeking motives for FDI. Why might a company favor acquisition over greenfield investment as an FDI approach?
Q6) Describe the advantages of international collaborative ventures, and describe the potential risks of collaboration.
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Chapter 15: Licensing, Franchising, and Other Contractual Strategies
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Sample Questions
Q1) Which of the following is true about franchising as an entry strategy?
A)It provides firms with minimum control over foreign operations.
B)It is an ownership-based international business activity.
C)It restricts a firm's ability to expand more rapidly abroad.
D)It is typically characterized as an unstable, short-term entry strategy.
Q2) A know-how agreement grants a firm permission to use another firm's proprietary names, characters, or logos for a specified period of time in exchange for a royalty.
A)True
B)False
Q3) A cross-border contractual relationship provides the focal firm with ________ over the foreign partner.
A)a low level of control
B)a moderate level of control
C)a high level of control
D)seldom any control
Q4) Describe six unique qualities shared by all cross-border contractual relationships.
Q5) Describe the guidelines for protecting intellectual property.
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Chapter 16: Marketing in the Global Firm
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Sample Questions
Q1) A firm that uses the Internet to provide detailed product information and the means for foreigners to buy offerings is using ________.
A)modular architecture
B)direct marketing
C)lengthy distribution channels
D)internal marketing
Q2) Varying income levels among nations usually necessitate that firms make price adjustments and product modifications for individual markets.
A)True
B)False
Q3) Taken together, the key elements of a company's marketing program are known as the ________.
A)product mix
B)value chain
C)product lifecycle
D)marketing mix
Q4) What is market segmentation? In a short essay, discuss how international firms use market segmentation.
Q5) Briefly discuss the principal advantages of standardization.
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Chapter 17: Human Resource Management in the Global Firm
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Sample Questions
Q1) Given the potential hardships of working abroad, many MNEs also provide ________ to expatriate employees which is similar to a bonus.
A)wages
B)incentives
C)base remuneration
D)allowance
Q2) Define performance appraisal. Briefly describe the factors that make performance evaluations more complex in the international context and explain the use of incentives in the compensation of employees.
Q3) ________ is a formal process for assessing how effectively employees perform their jobs.
A)Performance planning
B)Performance management
C)Performance appraisal
D)Performance guarantee
Q4) Why are taxes a concern for expatriates? Discuss how firms and governments often handle tax issues for employees working abroad.
Q5) In a short essay, discuss the key tasks in international human resource managers.
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