International Management Exam Review
Course Introduction
International Management explores the challenges and opportunities faced by managers operating across national boundaries. This course examines the complexities of managing organizations in a global context, including cultural differences, international business strategies, global leadership, cross-border negotiations, and the impact of economic, legal, and political environments. Through case studies and practical examples, students learn how to effectively manage multinational teams, adapt organizational practices to different cultural settings, and develop strategies for competing in the global marketplace.
Recommended Textbook
International Business Environments Operations 14th Edition by John Daniels
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20 Chapters
1998 Verified Questions
1998 Flashcards
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Page 2
Chapter 1: Globalization and International Business
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Sample Questions
Q1) Many companies merge with or acquire other companies to gain operating efficiencies that help them compete with or become global leaders.
A)True
B)False
Answer: True
Q2) It is rare for a new company to locate its operations near competitors and suppliers.
A)True
B)False
Answer: False
Q3) The owner of a U.S. football team and the owner of a Canadian hockey team purchase a British soccer team. This is an example of a ________.
A) royalty
B) portfolio investment
C) turnkey operation
D) joint venture
Answer: D
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Page 3
Chapter 2: The Cultural Environments Facing Business
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Sample Questions
Q1) Most people's basic values are acquired during childhood and are not readily changed later in life.
A)True
B)False
Answer: True
Q2) Many firms gain a global competitive advantage by fostering cultural diversity.
A)True
B)False
Answer: True
Q3) Assume a firm has operations in Tokyo,where there is a collectivist culture. Which of the following would most likely motivate the firm's Japanese employees?
A) "employee-of-the-month" programs
B) extensive vacation time
C) on-the-job challenges
D) good health benefits
Answer: D
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Chapter 3: The Political and Legal Environments Facing Business
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Sample Questions
Q1) A(n)________ law system is based on a systematic and extensive codification of laws and puts political officials in charge of specifying accessible,detailed,and written law that applies to all citizens.
A) customary
B) common
C) civil
D) theocratic
Answer: C
Q2) Multilateral development banks encourage development in risky environments through financial incentives.
A)True
B)False
Answer: True
Q3) International companies often must customize products to comply with local standards if they are to do business in a particular country.
A)True
B)False
Answer: True
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Chapter 4: The Economic Environments Facing Businesses
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Sample Questions
Q1) A firm with operations in Denmark can most likely expect all of the following EXCEPT
A) high taxes
B) significant regulation
C) tough job-protection laws
D) minimal monetary policies
Q2) In a country that practices state capitalism,all of the following are most likely to be handled by the state EXCEPT ________.
A) leveraging control of the financial system
B) developing national corporations
C) supporting the local activities of foreign competitors
D) systematically managing trade relations
Q3) What issues complicate international economic analysis?
Q4) Inflation occurs because aggregate demand is growing as fast as aggregate supply.
A)True
B)False
Q5) There is a positive correlation between economic freedom and economic growth.
A)True
B)False
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Chapter 5: Globalization and Society
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Sample Questions
Q1) Why is the argument that "anything legal is ethical" most likely insufficient?
A) Everything that is unethical is also illegal.
B) The law is an extremely efficient way to solve ethical dilemmas.
C) Laws are frequently based on imprecisely defined moral concepts.
D) Laws can never be changed; thus, rules for all possible ethical dilemmas are found in the law.
Q2) Which stakeholder group primarily wants additional sales and increased productivity?
A) customers
B) shareholders
C) society at large
D) government
Q3) The requirement by the U.S. government that its subsidiaries abroad comply with trade restrictions with Cuba is an example of ________.
A) utilitarianism
B) extraterritoriality
C) absolute advantage
D) relative advantage
Q4) Explain why the argument that "anything that is legal is ethical" is insufficient.
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Chapter 6: International Trade and Factor Mobility Theory
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Sample Questions
Q1) Understanding trade theories helps companies know if they will need to compete against goods and services produced abroad.
A)True
B)False
Q2) The comparative advantage theory holds that a country will gain from trade even though it can produce all goods more efficiently than other countries.
A)True
B)False
Q3) All of the following are examples of international labor mobility EXCEPT ________.
A) a manager assigned by an MNE to work short-term abroad
B) a refugee who takes up employment in another country
C) a college student on a study abroad program
D) an illegal immigrant working in another country
Q4) An objective of neomercantilism is to build up gold reserves.
A)True
B)False
Q5) As an international business manager,how can you benefit from an understanding of international trade theories?
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Chapter 7: Governmental Influence on Trade
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Sample Questions
Q1) In a short essay,list and discuss the nontariff barriers that relate to direct price influences: subsidies,aid and loans,customs valuations,and other direct price influences.
Q2) The fact that there are few reciprocal agreements among countries on the licensing of professionals most likely means that ________.
A) universities' study abroad programs do not enable students to obtain dual degrees and licenses from more than one country
B) more service functions are being handled as not-for-profit
C) people immigrate to those countries with the highest standards so as to more easily become licensed anywhere else
D) there is an effective limitation on trade in services
Q3) In international trade,what is a quota?
A) a guarantee by one country to buy some minimum amount from another
B) a quantitative limit on the amount of a product that can be imported or exported
C) a countertrade arrangement that establishes the value of imports and exports
D) a bilateral agreement calling for mutual access to markets
Q4) What is dumping? What are the possible effects of dumping on a country's economy?
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9
Chapter 8: Cross-National Cooperation and Agreements
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Sample Questions
Q1) Which of the following recently threatened the future of the EU's common currency?
A) refusal of the UK to use the euro
B) failed mergers and acquisitions
C) debt crisis in Greece
D) human rights issues
Q2) Global integration occurs as countries from all over the world decide to cooperate through the ________.
A) EU
B) NAFTA agreement
C) WTO
D) CARICOM
Q3) Describe the different types of regional economic integration and give an example of each type.
Q4) NAFTA is an example of a common market.
A)True
B)False
Q5) What is the difference between a free trade agreement and a customs union? Provide examples of each in your answer.
Q6) What has been the impact of NAFTA on trade and employment in NAFTA nations?
Page 10
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Chapter 9: Global Foreign-Exchange Markets
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Sample Questions
Q1) In 2010,what was the top remittance-receiving country in the world?
A) Brazil
B) Mexico
C) India
D) China
Q2) Commercial banks look at foreign-exchange trading as a service extended primarily to important customers,not as a major business activity of its own.
A)True
B)False
Q3) Why would companies become involved in arbitrage? What is the difference between arbitrage and interest arbitrage?
Q4) Which of the following is NOT a reason a company would deal in foreign exchange?
A) to pay or receive dividends in a foreign currency
B) to speculate on possible future movements in a currency
C) to buy and sell merchandise denominated in a foreign currency
D) to import merchandise denominated in its currency rather than the currency of the exporter
Q5) What is currency speculation? Why is it risky?
Q6) What is a futures contract? What institutions handle futures contracts?
Page 11
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Chapter 10: The Determination of Exchange Rates
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Sample Questions
Q1) What is a black market? Under what conditions might one exist?
Q2) If a Big Mac costs $3.41 in the United States and $2.67 in Argentina (the price of a Big Mac in Argentine pesos converted into dollars at the spot exchange rate),which of the following is most likely true?
A) The peso is overvalued against the dollar.
B) The dollar is overvalued against the peso.
C) It should be harder for a U.S. tourist to buy a leather coat in Buenos Aires because the dollar won't go very far.
D) It will be cheap for Argentine companies to invest in the United States because the dollar is relatively weak.
Q3) Shelly,a manager at a global firm,is studying the foreign currency intervention practices of Indonesia. Shelly is most likely examining ________ factors.
A) institutional setting
B) fundamental analysis
C) confidence
D) circumstantial
Q4) What methods are used by managers to forecast exchange rates? What are the main factors that influence exchange rates?
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Page 12
Chapter 11: The Strategy of International Business
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Sample Questions
Q1) The fundamental outlook of the multidomestic strategy is standardization.
A)True
B)False
Q2) The Industry Organization (IO)paradigm assumes which of the following?
A) stable political and cultural trends
B) shifting foreign exchange rates
C) perfect competition
D) unequal value
Q3) When the pressure for global integration is high and the pressure for local responsiveness is low,a company is most likely to pursue a(n)________ strategy.
A) global
B) transnational
C) multidomestic
D) international
Q4) What is the Industry Organization (IO)paradigm? Discuss the underlying assumptions of this model.
Q5) Discuss the characteristics of international,multidomestic,global,and transnational strategies. Include situations and a specific example in which each strategy would be most appropriate.
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Chapter 12: Country Evaluation and Selection
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Sample Questions
Q1) In developed countries,the percentage of the working-age population (using today's standards)is expected to rise by 2050.
A)True
B)False
Q2) Executives at Wilson Enterprises need to determine how to leverage and improve the firm's existing competencies on a global basis. What are the two most basic questions that they must answer?
A) Which markets should we serve and where should production be located to serve those markets?
B) What are the short-term competitive advantages of the project and what is the return on investment?
C) What is the total investment required and what are the managerial resources needed to supervise the investment?
D) What is the availability of land and what is the cost of labor?
Q3) In a concentration strategy for international expansion,a company goes first to one or a few countries and builds up fast there before going to other countries.
A)True
B)False
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Chapter 13: Export and Import
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Sample Questions
Q1) Smithson Pottery is considered a regular exporter because the firm fills unsolicited orders from foreign buyers and passively investigates international trade options.
A)True
B)False
Q2) The Internet supports more companies' efforts to launch a direct exporting strategy by ________.
A) providing information quickly and inexpensively
B) eliminating the need for highly detailed export plans
C) letting software take over customer service responsibilities
D) countering the power of electronic data interchange systems
Q3) All of the following are benefits of countertrade EXCEPT ________.
A) decreasing trade protectionism
B) increasing access to innovative technology
C) developing new trade relationships with foreign companies
D) preserving foreign exchange reserves
Q4) Indirect exporters sells goods to a foreign intermediary,who then sells the product in the domestic market to the final consumer.
A)True
B)False
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Chapter 14: Direct Investment and Collaborative Strategies
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Sample Questions
Q1) When a large company and a small company enter a joint venture,the large company is expected to contribute more to the arrangement.
A)True
B)False
Q2) Companies typically use various international operating forms simultaneously for all the following reasons EXCEPT which one?
A) They may be at different stages of commitment for different products.
B) They may be at different stages of commitment for different countries.
C) They may need to balance foreign revenues among their operating divisions.
D) Differences in countries' characteristics may necessitate diverse operational forms.
Q3) When a company wants to be compensated in a foreign subsidiary beyond its contribution in capital and managerial resources,it often ________.
A) licenses intangible property to its subsidiary
B) negotiates a special agreement with the host government
C) establishes a management contract
D) sets up an equity alliance
Q4) Explain how franchising agreements differ from licensing agreements.
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16
Chapter 15: The Organization of International Business
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Sample Questions
Q1) Martin Manufacturing is an MNE that centralizes authority to implement an extensive set of rules and procedures to govern a broad range of activities. Martin Manufacturing is most likely applying a system of ________.
A) market control
B) adjustment control
C) bureaucratic control
D) clan control
Q2) In a brief essay,discuss how decentralized management and organizational culture affect Johnson & Johnson.
Q3) Which of the following is promoted by a neoclassical structure?
A) innovation of ideas
B) information control
C) project competition
D) minimal relationships
Q4) Coordination refers to ________.
A) linking various value activities within an organization
B) identifying the span of control within an organization
C) portioning the performance of specific tasks
D) assigning tasks to qualified managers
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Chapter 16: Marketing Globally
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Sample Questions
Q1) Critics complain that pharmaceutical research budgets emphasize non-debilitating conditions common in developed countries rather than life-threatening diseases common in developing countries. People answering this criticism have contended that
A) correction of developed country conditions, such as balding, are necessary to stimulate developing country innovations that push global economic growth
B) very small portions of research budgets actually target these non-debilitating conditions
C) by being located almost entirely in developed countries, pharmaceutical companies lack access to locations where they can study diseases such as malaria and sleeping sickness
D) pharmaceutical companies cannot recoup expenses for research on some of the developing country problems, so governmental research centers and nonprofit foundations should handle this research
Q2) In a short essay,discuss the standardization of two marketing components: advertising and distribution.
Q3) In a short essay,discuss gap analysis.
Q4) In a short essay,compare push and pull promotional strategies.
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18
Chapter 17: Global Manufacturing and Supply Chain Management
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Sample Questions
Q1) Some companies select locations in different countries to specialize in the production of parts or final goods,which is known as ________.
A) centralized manufacturing
B) the multidomestic approach
C) offshore manufacturing
D) rationalization
Q2) What are foreign trade zones? How are they used?
Q3) Which of the following best describes a major difference between supply chain management and logistics?
A) Supply chain management involves handling suppliers and customers.
B) Logistics involves longer distances and international distribution networks.
C) Supply chain management focuses on transportation and the storage of goods.
D) Logistics only encompasses the outbound flow of products and materials.
Q4) Offshore manufacturing is attractive because it offers high labor costs,cheap materials and components,and proximity to markets.
A)True
B)False
Q5) Why are the concepts of dependability and quality important when developing a global manufacturing strategy?
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Chapter 18: International Accounting Issues
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Sample Questions
Q1) At Cooper Industries,Jake is responsible for evaluating potential acquisitions abroad,managing cash flow,tax planning,and internal auditing. Which of the following is most likely Jake's position at Cooper?
A) CEO
B) treasurer
C) regulator
D) controller
Q2) In addition to hiding losses,Parmalat engaged in financial statement fraud to ________.
A) pay shareholders
B) bribe government officials
C) support family-owned businesses
D) avoid paying high export/import tariffs
Q3) In regards to accounting,what is the impact of the SEC and Sarbanes-Oxley Act on international business?
Q4) Germany's accounting system has historically been a ________ system.
A) micro-pragmatic
B) macro-pragmatic
C) law-based
D) tax-based
Page 20
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Chapter 19: The Multinational Finance Function
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Sample Questions
Q1) What are the major sources of external funds for an MNE's normal operations? Why do MNEs use offshore financial centers to raise funds?
Q2) What is foreign currency translation exposure? How can this type of exposure affect an MNE?
Q3) The long-term financing dimension of cash management deals with the selection,issuance,and management of long-term debt and equity.
A)True
B)False
Q4) Equity financing is the degree to which a firm funds the growth of a business by debt.
A)True
B)False
Q5) An economic exposure ________.
A) occurs when reporting systems are inadequate
B) generally takes place when foreign currencies weaken against the dollar
C) occurs when the sourcing and costs of components change as exchange rates change
D) is the same as a translation exposure
Q6) What is multilateral netting? What are the advantages of multilateral netting?
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Chapter 20: International Human Resources
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Sample Questions
Q1) Historically,companies searching their ranks for potential expatriates looked first for individuals with the necessary language proficiency and then evaluated their technical competence.
A)True
B)False
Q2) Cost-of-living allowances given to an expatriate during his or her foreign assignment ________.
A) usually involve a compensation reduction because of lower costs abroad
B) are due to the difficulty of duplicating a particular way of living abroad
C) are usually eliminated over time
D) increase the longer the individual is overseas
Q3) Home-country nationals are ________.
A) used a great deal abroad by polycentric companies
B) citizens of the countries in which they are working
C) citizens of the country where the company is headquartered
D) noncitizens of the countries in which they are working
Q4) Why is global HRM more difficult than domestic HRM? How can staffing a foreign facility with locals alleviate some of these HRM difficulties?
Q5) List and discuss the main components of an expatriate's compensation package.
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