International Business
Textbook Exam Questions
Course Introduction
International Business explores the dynamics of conducting commerce across national borders, focusing on the strategies, operations, and challenges faced by companies in a globalized environment. The course covers essential topics such as international trade theories, foreign direct investment, cross-cultural management, global supply chains, and the impact of economic, political, and legal environments on business decisions. Students will develop an understanding of how multinational enterprises operate, adapt to diverse markets, and manage risks associated with international business activities. Through case studies and current events, learners will gain practical insights into globalization, ethical considerations, and emerging trends shaping the world economy.
Recommended Textbook
Global Business 3rd Edition by Mike Peng
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17 Chapters
1326 Verified Questions
1326 Flashcards
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Chapter 1: Globalizing Business
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Sample Questions
Q1) Reverse innovations are innovations that are adopted first in the Triad-based multinationals and then diffused around the world.
A)True
B)False
Answer: False
Q2) All the countries of the BRIC belong to the top tier of the global economic pyramid.
A)True
B)False
Answer: False
Q3) Semiglobalization is primarily caused by the practice of total isolation.
A)True
B)False
Answer: False
Q4) Formal institutions include laws,regulations,and rules.
A)True
B)False
Answer: True
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Chapter 2: Understanding Formal Institutions: Politics, Laws, and Economics
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Sample Questions
Q1) Intellectual property specifically refers to _____ property.
A) tangible
B) intangible
C) real
D) moveable
Answer: B
Q2) Which of the following would be considered an example of intellectual property rights?
A) Rights associated with ownership of vehicles
B) Rights associated with ownership of trademarks
C) Rights associated with ownership of buildings
D) Rights associated with ownership of business contracts
Answer: B
Q3) For which of the following types of economies would the factors of production depend on the relative distribution of market forces versus command forces?
A) Mixed economy
B) Pure market economy
C) Strict laissez faire economy
D) Command economy
Answer: A
Page 4
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Chapter 3: Emphasizing Informal Institutions: Cultures, Ethics, and Norms
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Sample Questions
Q1) The United States has a low-context culture in business.
A)True
B)False
Answer: True
Q2) The hierarchical arrangement of individuals into categories such as classes,castes,or divisions within a society is referred to as _____.
A) social dumping
B) social stratification
C) social facilitation
D) social loafing
Answer: B
Q3) Cultural intelligence emphasizes the understanding of informal institutions.
A)True
B)False
Answer: True
Q4) English-speaking countries contribute the largest share of global business output.
A)True
B)False
Answer: True
Page 5
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Chapter 4: Leveraging Resources and Capabilities
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Sample Questions
Q1) Which of the following support activities corresponds to a firm's primary activity of final assembly?
A) Technology development
B) Human resources
C) Infrastructure
D) Logistics
Q2) The rarity of a firm's resources and capabilities is studied under the VRIO framework.
A)True
B)False
Q3) An original design manufacturer includes final assembly in its value chain activities.
A)True
B)False
Q4) Original design manufacturers are firms that both design and manufacture products.
A)True
B)False
Q5) What is a value chain?
Q6) Illustrate with examples the difference between OEMs,ODMs,and OBMs.
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Chapter 5: Trading Internationally
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Sample Questions
Q1) In the context of tariff barriers,deadweight costs = _____.
A) total inefficiency - net gain
B) net loss - net gain
C) total inefficiency - net loss
D) total inefficiency - net gain - net loss
Q2) Trade embargoes are a means of trade intervention.
A)True
B)False
Q3) Which of the following is true of voluntary export restraints?
A) It is an extra tax imposed by a country on its exports.
B) It is an example of a tariff barrier.
C) It is a government payment to domestic firms.
D) It is an export quota levied by a country on the quantity of its exports.
Q4) The theory of national competitive advantage of industries assumes that comparative advantage always resides in the lead innovation nation.
A)True
B)False
Q5) Classical theories assume no foreign exchange complications.
A)True
B)False
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Chapter 6: Investing Abroad Directly
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Q1) A type of FDI in which the firm moves upstream or downstream in different value chain stages in a host country is called horizontal FDI.
A)True
B)False
Q2) FPI refers to the _____.
A) direct, hands-on management of foreign assets
B) amount of FDI moving in a given period in a certain direction
C) ability of a firm to engage in downstream stage of the value chain in a host country
D) investment in a portfolio of foreign securities that do not entail the active management of foreign assets
Q3) A(n)_____ refers to an industry dominated by a small number of players.
A) oligopoly
B) monopoly
C) perfect competition
D) free market
Q4) Differentiate between the primary characteristics of horizontal and vertical FDI.
Q5) Why do firms prefer FDI to licensing?
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Chapter 7: Dealing with Foreign Exchange
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Q1) Which of the following was true of the Bretton Woods system?
A) All currencies in the system had floating exchange rates.
B) All currencies were pegged at a fixed rate to the dollar.
C) All currencies were maintained by fixing their prices in terms of gold.
D) All currencies in the system were required to be gold convertible.
Q2) Which of the following characterizes a country's current account?
A) A country's current account deficit has to be financed by both purchases and sales of assets.
B) A country experiencing a current account deficit will see its currency appreciate.
C) A country's current account balance consists of exports plus imports of merchandise and services minus income on the country's assets abroad.
D) A country experiencing a current account surplus will see its currency depreciate.
Q3) The Bretton Woods system had been built on the condition that the US inflation rate had to be continuously high.
A)True
B)False
Q4) Briefly explain the cause for the fall of the Bretton Woods System.
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Chapter 8: Capitalizing on Global and Regional Integration
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Q1) In a(n)____,members coordinate and harmonize monetary,fiscal,and taxation policies.
A) customs union
B) common market
C) economic union
D) free trade area
Q2) NAFTA is an example of a(n)_____.
A) free trade area
B) customs union
C) common market
D) economic union
Q3) Discuss the formation of GATT and the issues that precipitated the formation of the WTO (Post GATT).
Q4) Which of the following features refers to the Schengen area in the EU?
A) A passport-free travel zone
B) An open migration zone for workers
C) A common currency zone
D) A Non-EU members' zone
Q5) Explain possible benefits of global economic integration.
Q6) Explain the formation of APEC.
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Chapter 9: Growing and Internationalizing the Entrepreneurial Firm
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Sample Questions
Q1) In general,governments in developed economies impose more procedures to start a company than those in poorer countries.
A)True
B)False
Q2) Domestic transaction costs are qualitatively higher than international transaction costs.
A)True
B)False
Q3) Identify and explain the dilemma behind transaction costs and international entrepreneurial opportunities.
Q4) Owners,managers,and employees at large firms tend to be more innovative and take more risks than those at entrepreneurial firms.
A)True
B)False
Q5) Microfinance emerged in response to the lack of financing for entrepreneurial opportunities in many developing countries.
A)True
B)False
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Chapter 10: Entering Foreign Markets
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Sample Questions
Q1) According to the stage model,firms will enter culturally distant countries for their first internationalization.
A)True
B)False
Q2) A(n)_____ is a non-equity mode of entry used to build a longer-term presence by building and then operating a facility for a period of time before transferring operations to a domestic agency or firm.
A) BOT agreement
B) R&D contract
C) JV
D) WOS
Q3) Efficiency-seeking firms go to countries that have _____.
A) an abundance of natural resources and related transport and communication infrastructure
B) a strong demand for their products and services
C) world-class innovations (innovative individuals, firms, and universities)
D) economies of scale and abundance of low-cost factors
Q4) Explain briefly the meaning of liability of foreignness.Why is it difficult for companies to succeed in foreign markets?
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Chapter 11: Managing Global Competitive Dynamics
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Sample Questions
Q1) If a firm is operating in an environment that is customized to home market,which of the following is the most preferred strategy?
A) Collusion strategy
B) Dodger strategy
C) Extender strategy
D) Contender strategy
Q2) _____ determines the institutional mix of competition and cooperation that gives rise to the market system and also seeks to balance efficiency and fairness.
A) Competition policy
B) Antitrust policy
C) Mutual forbearance
D) Fairness policy
Q3) Which of the following industrial characteristics makes a collusion difficult but leads to competition?
A) Existence of few firms in the industry
B) Existence of an industry price leader
C) Lack of market commonality
D) High barriers of entry
Q4) Under what conditions would a firm adopt a contender strategy?
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Chapter 12: Making Alliances and Acquisitions Work
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Sample Questions
Q1) Describe how partners in an alliance can combat opportunism.
Q2) A non-equity based alliance is also called a _____.
A) cross-border alliance
B) synergistic alliance
C) hubristic alliance
D) contractual alliance
Q3) Influence of formal institutions is low in both equity- and non-equity-based alliances.
A)True
B)False
Q4) In the context of acquisitions,which of the following is a resource-based issue faced by synergistic motives?
A) Herd behavior
B) Enhancement of market power and scale economies
C) Chasing fads of M&As
D) Self-interested actions
Q5) A joint venture (JV)is a form of equity-based alliance.
A)True
B)False
Q6) Describe the stages in the formations of alliances.
Page 14
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Chapter 13: Strategizing,Structuring,and Learning around the World
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Sample Questions
Q1) In the context of the customer-focused dimension of a global matrix,the _____ structure allows a provider to sell whatever combination of goods and services that customers prefer,including rivals' offerings.
A) open innovation
B) solutions-based
C) global account
D) social capital
Q2) From a resource-based view,explicit knowledge is strategically more important than tacit knowledge.
A)True
B)False
Q3) Many firms phase out the international division structure after their initial stage of overseas expansion.
A)True
B)False
Q4) Summarize the advantages and disadvantages of the home replication strategy.
Q5) Summarize the advantages and disadvantages of the transnational strategy.
Q6) Explain the advantages and disadvantages of the global standardization strategy.
Q7) What are centers of excellence?
15
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Chapter 14: Competing on Marketing and Supply Chain Management
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Sample Questions
Q1) For which of the following customer categories are firms advised to leverage the global brands and their relatively more standardized products and services?
A) Global dreamers and antiglobals
B) Global citizens and global dreamers
C) Antiglobals and global agnostics
D) Global agnostics and global citizens
Q2) Briefly discuss market orientation versus relationship orientation that concern marketing and supply chain management.
Q3) Which of the following must be practiced to avoid blunders in international marketing?
A) Encourage ethnocentrism
B) Encourage the pushy salesman approach
C) Be susceptible to nationalistic feelings of local consumers, employees, and governments
D) Save back-translation cost
Q4) Market orientation is the effort to establish,maintain,and enhance relationships with customers.
A)True
B)False
Chapter 15: Managing Human Resources Globally
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Sample Questions
Q1) Externally,HRM is shaped by national and industry contexts.
A)True
B)False
Q2) What are the problems related with inpatriation?
Q3) Compensation with a _____ makes locations,where pay is higher than in their home country,a more attractive place to work for PCNs and TCNs.
A) going rate approach
B) balance sheet approach
C) pay-per-impression
D) merit rate
Q4) Disregarding nationality,a(n)_____ approach focuses on finding the most suitable managers,who can be PCNs,HCNs,or TCNs.
A) polycentric
B) ethnocentric
C) geocentric
D) regiocentric
Q5) MNEs only hire host-country nationals to work at a local subsidiary.
A)True
B)False
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Chapter 16: Financing and Governing the Corporation
Globally
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Sample Questions
Q1) Voice-based governance mechanisms are external mechanisms. A)True
B)False
Q2) The main external governance mechanism is the _____.
A) market for corporate control
B) market for product competition
C) market for private equity
D) market for stock options
Q3) Managerial human capital refers to some of the most valuable,rare,and hard-to-imitate skills and abilities acquired by top managers and directors.
A)True
B)False
Q4) The vast majority of large firms throughout continental Europe,Asia,Latin America,and Africa feature concentrated family ownership and control.
A)True
B)False
Q5) Information asymmetries exist between principals and agents.
A)True
B)False
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Chapter 17: Managing Corporate Social Responsibility
Globally
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Q1) The CSR approach draws upon Adam Smith's idea that the pursuit of economic self-interest within legal and ethical bounds leads to efficient markets.
A)True
B)False
Q2) List some corporate social responsibilities with regard to host governments,recommended for multinational enterprises by international organizations.
Q3) Top management at a(n)_____ firm not only supports and champions CSR activities,but also views CSR as a source of differentiation that permeates throughout the corporate DNA.
A) proactive
B) accommodative
C) defensive
D) reactive
Q4) Global sustainability disregards sustainable capitalism.
A)True
B)False
Q5) Elaborate on the proactive strategy to confront CSR pressures.
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Q6) Elaborate on the resource-based view to CSR.
Q7) Elaborate on the environmental standards debate concerning CSR.
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