International Management Exam Bank
Course Introduction
International Management explores the strategies, challenges, and practices required to manage and lead organizations in a global context. The course examines cultural, economic, legal, and political differences that impact international operations, with a focus on effective decision-making across borders. Topics include cross-cultural communication, global leadership, international market entry, managing international teams, ethical considerations, and adapting business practices to diverse environments. Through case studies and real-world examples, students will develop the skills necessary to navigate and succeed in complex international business environments.
Recommended Textbook
International Business The New Realities 4th Edition by S. Tamer Cavusgil
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17 Chapters
1641 Verified Questions
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Page 2
Chapter 1: Introduction: What Is International Business
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Sample Questions
Q1) In a short essay, explain the four trends that provide evidence for the globalization of markets. Provide an example to illustrate one of the trends.
Answer: In practical terms, the globalization of markets is evident in several related trends. First is the unprecedented growth of international trade. For example, cross-border trade was modest-about $100 billion per year. Today, it accounts for a substantial proportion of the world economy, with world exports alone amounting to some $18 trillion annually-that is, $18,000,000,000,000! Second, trade between nations is accompanied by substantial flows of capital, technology, and knowledge. The third trend is the development of highly sophisticated global financial systems and mechanisms that facilitate the cross-border flow of products, money, technology, and knowledge. Fourth, globalization has brought about a greater degree of collaboration among nations through such organizations as the World Trade Organization and the International Monetary Fund.
Q2) Which of the following is another term for importing?
A)capital investment
B)supply side development
C)global sourcing
D)unilateral procurement
Answer: C
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Page 3
Chapter 2: Globalization of Markets and the
Internationalization of the Firm
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Q1) In a "common market," barriers to the cross-border flow of factors of production are removed.
A)True
B)False
Answer: True
Q2) Convergence of consumer preferences has led to an enhanced emphasis on standardization which implies that ________.
A)the consistently rising prices of consumer goods have led to a demand vacuum in the market
B)the distance between consumers worldwide has increased with the advent of technology
C)the raw materials, parts, and components sourced by professional buyers are very similar in design and structure
D)the globalization of services has adversely affected the quality of service worldwide
Answer: C
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Page 4
Chapter 3: The Cultural Environment of International Business
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Q1) Cross-cultural proficiency is characterized by four key personality traits: tolerance for ambiguity, perceptiveness, valuing personal relationships, and flexibility and adaptability.
A)True
B)False
Answer: True
Q2) Culture refers to the inherited attitudinal traits of an individual.
A)True
B)False
Answer: False
Q3) Cross-cultural risk is often intensified by managers with geocentric tendencies.
A)True
B)False
Answer: False
Q4) Self-reference criterion is ________.
A)the tendency to assume that all people from one culture are the same
B)the tendency to understand a culture without regard to country boundaries
C)the propensity to view other cultures through the lens of one's own culture
D)the propensity to understand culture as an inherited trait
Answer: C
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Chapter 4: Ethics, Corporate Social Responsibility,
Sustainability and Corporate Governance
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Sample Questions
Q1) Advances in communications technologies makes it difficult to deceive consumers in foreign countries .
A)True
B)False
Q2) Firms with a strong social interest ________.
A)openly support the use of sweatshops
B)aim to optimize work conditions and diversity in hiring
C)are reluctant to provide health insurance to employees
D)engage in deceptive marketing
Q3) The Global Reporting Initiative pioneered the development of the most widely used sustainability reporting framework.
A)True
B)False
Q4) Who among the following managers is most likely to raise concern over the ban on advertising directed at children in his/her country?
A)Marta
B)Geoff
C)Luis
D)Jang
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Chapter 5: Theories of International Trade and Investment
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Q1) Which of the following is true about absolute advantage principle?
A)According to this approach, enhanced product specialization adversely affects communal welfare.
B)This approach allows the nation to consume more than it otherwise could, generally at lower cost.
C)This is the only approach that can be used to explain why nations attempt to run a trade surplus.
D)This approach explains the process by which firms acquire and retain one or more value-chain activities inside the firm.
Q2) Born global firms are ________.
A)companies that forgo the domestic focus stage of the internationalization process
B)companies that focus mainly on running a trade surplus
C)young companies that internationalize early in their evolution
D)young companies that focus on the ratio of production costs rather than the absolute cost of production
Q3) In a short essay, explain the absolute advantage principle. Provide an example of the principle at work.
Q4) Distinguish between comparative and competitive advantages. Provide examples.
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Page 7
Chapter 6: Political and Legal Systems in National Environments
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Sample Questions
Q1) Boycotts and protests have the potential to harm businesses by ________.
A)preventing businesses from shipping their products to foreign markets
B)lost sales and increased costs for public relations activities
C)destroying the ability of all local firms to carry on normal business operations
D)raising concerns about a firm's foreign operations by initiating lawsuits
Q2) One of the best sources of intelligence in the scanning process is employees working in foreign countries targeted for market entry
A)True
B)False
Q3) Market forces and free trade are encouraged in democracies.
A)True
B)False
Q4) Totalitarianism's fundamental tenet is that capital and wealth should be vested in the state and used primarily as a means of production rather than for profit.
A)True
B)False
Q5) Describe how the political and legal systems of a host country can both harm and benefit a foreign firm.
8
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Chapter 7: Government Intervention and Regional Economic Integration
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Q1) Import tariffs are a principle instrument of trade intervention. In a short essay, briefly describe the five main types of import tariffs.
Q2) The WTO was created in order to reduce tariffs through continuous negotiations among member nations.
A)True
B)False
Q3) Increasing trade barriers are a major factor in the growth of developing nations and global commerce.
A)True
B)False
Q4) A ________ is an area within a country that receives imported goods for assembly or other processing and subsequent re-export.
A)single market
B)trade bloc
C)foreign trade zone
D)common market
Q5) In a short essay, describe two methods of government intervention and explain the four major defensive motives for government intervention.
Page 9
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Chapter 8: Understanding Emerging Markets
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Sample Questions
Q1) MNEs must set high prices in emerging markets because emerging market consumers have high spending power.
A)True
B)False
Q2) Which of the following best summarizes the argument in favor of microfinance?
A)Microfinance ultimately leads to greater tax revenues for national governments.
B)Recently, mainstream banks have begun to view microfinance as the prime driver of advanced economies.
C)Microfinance allows the underprivileged to create businesses and improve their lives.
D)Microfinance alleviates the pressure on MNEs to support developing economies.
Q3) Which of the following is/are proving vital to the development of Africa?
A)landline telephony
B)protectionism
C)cell phones
D)high regulations
Q4) Where are emerging markets mostly found? What are the factors contributing to their rapid growth?
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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Q1) Which of the following statements is true of a dirty float?
A)exchange rates fluctuate with occasional central bank intervention
B)beneficial exchange rates are offered in trade with certain nations
C)fixed exchange rates are set and maintained by the World Bank
D)currency values rise and fall according to the U.S. dollar
Q2) Which of the following best describes the role that the international monetary system plays with foreign firms?
A)underwrite stock and bond issues and give advice on mergers
B)establishes regulations for FDI financing
C)oversees finance and trade in developing nations
D)provides a framework for monetary and foreign exchange activities worldwide
Q3) In most high-inflation nations, interest rates are increasing while the purchasing power of the national currency is plummeting.
A)True
B)False
Q4) Explain the concept of currency risk. How can inflation and interest rates create currency risk?
Q5) Explain the duties of central banks. How do central banks, such as the Federal Reserve, implement national monetary policies?
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Chapter 10: Financial Management and Accounting in the Global Firm
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Sample Questions
Q1) Which of the following is a direct tax?
A)customs tax
B)corporate income tax
C)VAT
D)sales tax
Q2) Equity financing comes from either of two sources: (1)loans from banks and other financial intermediaries, or (2)the sale of corporate bonds to individuals or institutions.
A)True
B)False
Q3) The current rate method is typically employed when translating records of
A)foreign subsidiaries that are part of the parent firm's operations
B)domestic affiliates that conduct business abroad occasionally
C)foreign subsidiaries that are considered stand-alone legal entities
D)joint venture partnerships that participate in global operations
Q4) When a Japanese firm sells yen-denominated bonds in the United States, it is issuing foreign bonds.
A)True
B)False
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Chapter 11: Strategy and Organization in the International Firm
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Q1) Which of the following is the most critical asset of any organization?
A)goodwill
B)computer programs
C)human capital
D)bonds
Q2) How can a firm's strategy make the best use of the firm's resources? How does a firm's decision to have a centralized versus a decentralized organizational structure affect its strategy?
Q3) A firm would be compelled to seek global integration when it has to ________.
A)adjust to cultural differences
B)cater to local customer needs
C)capitalize on converging consumer trends and universal needs
D)accommodate differences in distribution channels
Q4) A centralized approach means substantial autonomy and decision-making authority are delegated to the firm's subsidiaries around the world.
A)True
B)False
Q5) Discuss the advantages and implementation of a transnational strategy, and explain why this strategy is closely associated with a global matrix structure.
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Chapter 12: Global Market Opportunity Assessment
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Q1) Ongoing globalization has reduced the cost and risk of entering foreign markets.
A)True
B)False
Q2) Which of the following tasks is the final stage of assessing the global market opportunities of a firm?
A)screen countries to identify target markets
B)assess product suitability for foreign markets
C)estimate company sales potential
D)assess industry market potential
Q3) ________ is used by some firms to gauge long-term sales potential without fully committing to a foreign market.
A)Competitor assessment
B)Test marketing
C)Market segmentation
D)End-user surveys
Q4) Which of the following is management's goal when utilizing gradual elimination?
A)diminish the number of foreign markets served by a large MNE
B)lessen the number of corporate managers involved in subsidiary issues
C)decrease the need for foreign intermediaries to improve profitability
D)reduce the number of nations to investigate as potential foreign markets
Page 14
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Chapter 13: Exporting and Global Sourcing
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Sample Questions
Q1) If Fun Play decides to source from its own wholly owned subsidiary, it would be engaging in ________.
A)offshoring
B)contract manufacturing
C)cause marketing
D)captive sourcing
Q2) Most companies cite cost cutting as the main reason for global sourcing.
A)True
B)False
Q3) The growth of global sourcing has been driven by ________.
A)the declining demand for highly skilled workers
B)the rapidly aging population in advanced economies
C)technological advances in communications
D)the rising costs of international business
Q4) The bill of lading is the "birth certificate" of the goods being shipped and indicates the country where they originate.
A)True
B)False
Q5) Distinguish between captive sourcing and contract manufacturing.
Q6) What is offshoring? Describe the types of industries that tend to offshore.
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Chapter 14: Foreign Direct Investment and Collaborative Ventures
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Sample Questions
Q1) Foreign direct investment is the least risky entry strategy.
A)True
B)False
Q2) Explain the difference between vertical FDI and horizontal FDI. Provide an example that illustrates the difference between vertical and horizontal integration
Q3) Collaborative ventures benefit SMEs by providing them with ________.
A)better trained employees
B)increased amount of capital
C)larger and newer facilities
D)more advanced technology
Q4) A firm that develops the capacity to sell its products by investing in marketing and selling operations is ________.
A)acquiring downstream value-chain facilities
B)acquiring upstream value-chain facilities
C)engaging in centralization
D)engaging in decentralization
Q5) Avoiding trade barriers is classified as a market-seeking motive for FDI.
A)True
B)False
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Chapter 15: Licensing, Franchising, and Other Contractual Strategies
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Sample Questions
Q1) Professional service firms, such as PriceWaterhouseCooper, often enter large international markets through FDI but usually use ________ to enter small markets.
A)equity-based collaborative ventures
B)affiliates
C)BOT arrangement
D)turnkey contracting
Q2) The purpose of intellectual property rights is to ________.
A)prevent excessive regulation and government bureaucracy
B)grant a firm permission to use another firm's proprietary names
C)allow inventors monopoly advantage for a specified period of time
D)allow a firm to use an entire business system in exchange for compensation
Q3) One of the advantages of licensing is that the profits generated from such agreements are typically higher than for FDI.
A)True
B)False
Q4) Explain how licensing works as an entry strategy into foreign markets. Describe the risks faced by technological firms that enter licensing agreements in foreign countries.
Q5) Describe the guidelines for protecting intellectual property.
Page 17
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Chapter 16: Marketing in the Global Firm
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Sample Questions
Q1) An American automaker operating in the Asian and the European markets designs various models around a standardized platform. The firm adds parts, features, and regular units to this basic standardized platform according to the preferences of its customers. This exemplifies ________.
A)segmentation
B)customer relations management
C)brand dilution
D)modular architecture
Q2) Which of the following refers to a key strategy used by corporations to combat international price escalation?
A)lengthen the distribution channel
B)ship assembled products to save additional labor costs
C)redesign the product to remove costly features
D)centralize production and sourcing to a single location
Q3) Locating manufacturing in countries with low-cost labor enables a firm to
A)charge premium prices
B)create artificial demand
C)standardize products
D)charge lower prices
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Chapter 17: Human Resource Management in the Global Firm
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Sample Questions
Q1) 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.
Q2) Typically, a standardized diagnostic tool is used to evaluate the performance of all firm employees and subsidiaries, both domestic and international.
A)True
B)False
Q3) Expatriates usually do not receive the benefits normally accorded to home-country employees.
A)True
B)False
Q4) Which of the following sums up the goal of training Conrad for his assignment in Romania?
A)increasing Conrad's effectiveness abroad
B)ensuring a smooth repatriation for Conrad
C)decreasing the per-unit cost of production
D)enhancing overall freedom for employees
Q5) In a short essay, discuss the key tasks in international human resource managers.
Page 19
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