Introduction to International Business Midterm Exam
Course Introduction
Introduction to International Business explores the dynamic environment of global commerce, examining how organizations operate in an increasingly interconnected and competitive world. The course covers fundamental concepts such as globalization, international trade theories, foreign direct investment, cross-cultural management, international marketing strategies, and the regulatory and ethical challenges faced by businesses abroad. Through case studies and real-world examples, students will gain insights into the strategies multinational enterprises use to enter new markets, manage international operations, and adapt to diverse legal and cultural landscapes, preparing them for careers in the global business arena.
Recommended Textbook
M International Business 1st Edition by Michael Geringer
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Page 2
Chapter 1: The Challenging World of International Business
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Sample Questions
Q1) A multidomestic company is
A)a business whose activities involve crossing national borders.
B)the domestic operations within a foreign country.
C)an organization with multicountry affiliates.
D)an organization that attempts to standardize operations worldwide.
Answer: C
Q2) Foreign business denotes
A)a business whose activities involve crossing national borders.
B)the domestic operations within a foreign country.
C)an organization with multicountry affiliates.
D)an organization that attempts to standardize operations worldwide.
Answer: B
Q3) External forces in the international business environment are commonly called uncontrollable forces.
A)True
B)False
Answer: True
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Chapter 2: International Trade and Investment
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Q1) Approximately 70 percent of the exports from developed countries go to developed countries.
A)True
B)False
Answer: True
Q2) Arguments in support of mercantilism largely disappeared after the end of the mercantilist era in the late 1700s.
A)True
B)False
Answer: False
Q3) Dunning's Eclectic Theory of International Production states that if a firm is going to invest in production facilities abroad,it must have the following kinds of advantages:
A)ownership-specific,location-specific,and internationalization.
B)strategic,organizational,and technological.
C)ownership-specific,location-specific,and internalization.
D)technological,financial,and human resource.
E)financial,and human resource and technological.
Answer: C
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4
Chapter 3: International Institutions From an International Business Perspective
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Q1) The UN International Court of Justice hears cases that involve disputes between national governments.
A)True
B)False
Answer: True
Q2) The idea that WTO members treat all members equally is known as
A)the transparency principle.
B)the fairness principle.
C)the equity and equality principle
D)the MFN/most favored nation principle.
Answer: D
Q3) The Doha Development Agenda is
A)a WTO conference on trade.
B)an agreement on climate control and greenhouse gasses.
C)a decision-making approach to development.
D)a development rules list.
Answer: A
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Page 5
Chapter 4: Sociocultural Forces
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Q1) According to Trompenaars,a culture's attitude toward the environment can range from
A)peaceful to warlike.
B)overwhelmed by aesthetics to dominating the environment.
C)control over the environment to harmony with it.
D)submission to atheism.
Q2) Low context cultures tend to be polychronic,with a lot going on at one time.
A)True
B)False
Q3) Culture includes everything but A)religion.
B)religion and politics.
C)higher education and universal values.
D)none of the above.
Q4) In high context cultures,people tend to form long-lasting relationships that endure over time.
A)True
B)False
Q5) Explain Trompenaars' achievement-ascription dimension,and comment on its usefulness in an international business setting.
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Chapter 5: Natural Resources and Environmental Sustainability
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Q1) The marketed energy use has been dominated since 1980 by A)renewable energy sources.
B)nuclear energy and coal.
C)nonrenewable energy sources.
D)solar and wind power.
Q2) Why do international managers need to know anything about a nation's topographic features?
Q3) Porter in his diamond model distinguishes two types of factor conditions, A)positive and negative factors.
B)contributing and disaggregating factors.
C)advanced and basic factors.
D)foreign and domestic factors.
Q4) Sustainable approaches in business usually involve trade-offs such as lower profits compensated by reduced marketing costs and improved image/reputation.
A)True
B)False
Q5) Because it is a high polluter,coal is on the decline as an energy source.
A)True
B)False
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Chapter 6: Political and Trade Forces
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Sample Questions
Q1) Trade restrictions violate the spirit of the WTO.
A)True
B)False
Q2) Define and discuss country risk assessment,using examples to illustrate your points.
Q3) Cote d'Ivoire uses child labor,often imported and kidnapped,in the cultivation and harvesting of
A)marijuana.
B)palm oil.
C)cocoa bean.
D)poppy.
Q4) U.S.ocean shipping companies are benefiting from U.S.government subsidies.
A)True
B)False
Q5) The oldest orderly marketing arrangement,which was disbanded through the WTO,is the
A)multi-fiber arrangement (MFA).
B)Jamaica Agreement.
C)Textile Co-operation Treaty (CTC).
D)Japanese truck export quota.
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Chapter 7: Intellectual Property and Other Legal Forces
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Q1) The U.S.avoids trade barriers on imports in support of free trade principles.
A)True
B)False
Q2) The U.S.antitrust law contains both civil and criminal penalties,
A)neither of which can be applied outside the U.S.
B)and the criminal penalties apply to foreign companies even if the conspiracy took place outside the U.S.
C)but their application to foreign companies is limited to actions that have taken place within the U.S.
D)and they can be administered by foreign courts.
Q3) Smaller nations would like patent protection
A)extended,to allow for them to build their competitive advantage.
B)extended,so that they can recoup development costs.
C)reduced,so that they can enter the game earlier,possibly with generics.
D)extended,so that their profits can increase.
Q4) Where litigation should occur has to do with the location of the problem and is usually clear to both the defendant and plaintiff.
A)True
B)False
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Chapter 8: The International Monetary System and Financial Forces
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Q1) The international Fisher effect states that the interest rate differentials for any two currencies reflect the expected change in their exchange rates.
A)True
B)False
Q2) When a business pays in dollars for an import from Turkey,the dollars that leave the U.S.will eventually show up as a credit on the U.S.capital account. A)True
B)False
Q3) Your firm operates in Seattle and is signing a contract to supply advisory services to a design firm in Beijing.Your payment is 50% on contract signing and 50% on completion,which is two years out.Would you want your payment in dollar or yuan for today's portion? What about the portion on completion? Why?
Q4) The Bank for International Settlements operates as the banker for central banks. A)True B)False
Q5) The spot rate is the rate for exchange within two days in the currency market. A)True B)False
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Chapter 9: Labor Forces
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Sample Questions
Q1) In 2008,what percentage of the U.S.population was foreign-born?
A)2%
B)24.5%
C)12.5%
D)1.2%
Q2) What are the forces that affect the quality and quantity of labor in a nation?
Q3) Less than 20 percent of the world's population lived in urban areas in 1950; today it is over half.
A)True
B)False
Q4) In employment policies of an international firm,social status issues need to be A)ignored,so that all workers have equity.
B)paid careful attention to,so that issues arising from them can be foreseen.
C)relegated to local control,because that is where status issues appear.
D)understood and then flaunted,so that locals learn about diversity.
Q5) Discuss some of the considerations in employment policies foreign firms should be aware of as they operate in new markets.
Q6) Classical economists assumed that labor was a mobile production factor.
A)True
B)False
Page 11
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Chapter 10: International Competitive Strategy
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Sample Questions
Q1) International strategy involves decisions that deal with a single area,such as marketing or production.
A)True
B)False
Q2) International strategy helps firms to make choices about how to deploy scarce resources in order to achieve their international objectives.
A)True
B)False
Q3) According to the text,competencies:
A)are skills or abilities required in order to achieve competitive advantage.
B)refer to the ability of a company to have higher rates of profits than its competitors.
C)create value for customers and for which customers are willing to pay.
D)create value for manufactures and for which customers are willing to pay.
E)refer to the ability of a company to have higher rates of FDI.
Q4) Sales forecasts are both a control and planning technique.
A)True
B)False
Q5) Discuss the global strategic planning process.
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Chapter 11: Organizational Design and Control
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Q1) The regionalized organization seems to be popular with companies that:
A)operate in many diverse foreign regions.
B)favor licensing as a form of market entry.
C)manufacture products with a low technological content requiring strong marketing ability.
D)manufacture products incorporating high technology in industrialized regions.
E)favor new product development as a form of market entry.
Q2) Advantages of the virtual corporation concept include that it allows a company to build competence from the ground up and to increase management's control over the corporation's activities.
A)True
B)False
Q3) The horizontal organization has been characterized as anti-organization because its designers try to remove the constraints imposed by the conventional organizational structure.
A)True
B)False
Q4) Explain why and where decisions are made among ICs and their subsidiary units.
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Chapter 12: Assessing International Markets
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Sample Questions
Q1) Countries in which strong competition already exists are eliminated from consideration by most managers.
A)True
B)False
Q2) Managers may consider entering a market in which strong competition already exists,if they believe entering a competitor's home market will distract the competitor's attention from the new entrant's own home market.
A)True
B)False
Q3) When the historic growth rates of a product are known,future growth can be forecast by means of trend analysis.
A)True
B)False
Q4) College students may make good interviewers for firms doing market research in foreign countries.
A)True
B)False
Q5) Discuss the requirements of viable markets under the segment approach.
Q6) Discuss cluster analysis as a method of estimating market demand.
Page 14
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Chapter 13: Entry Modes
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Q1) When a licensing agreement is made,
A)the licensee receives expertise from another company.
B)the licensee obtains permission from the government to do business in a foreign country.
C)the licensor is a foreign government which grants the license.
D)the licensor pays to receive assistance from the licensee.
E)the licensee receives expertise from its own company's in-house experts.
Q2) A follower will most likely succeed when there are few legal,technological,cultural,or financial barriers to inhibit entry,as long as it has sufficient resources or competencies to overwhelm the pioneer's early advantage.
A)True
B)False
Q3) Research shows that surviving pioneers hold a smaller average market share when their industries reach maturity than firms that were either fast followers or late entrants in the product category.
A)True
B)False
Q4) What are the drawbacks of indirect exporting?
Q5) What are the reasons that firms,both small and large,may engage in exporting?
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Chapter 14: Marketing Internationally
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Q1) A middle ground between an ad campaign that is standardized worldwide and an entirely local ad campaign is called a:
A)hybrid advertising campaign.
B)programmed-management approach.
C)computerized-management approach.
D)shared-management approach.
E)programmed-hybrid approach.
Q2) In a code law country,a brand name belongs to the:
A)person registering it first.
B)person who uses it first.
C)company that uses it first.
D)person who registers it first under the Berlin Convention.
E)person who registers it first under the Luxembourg Convention.
Q3) Whether to position a product as foreign or local is a basic cultural decision for the marketer,and it seems to depend on:
A)the distribution channel being used.
B)the product type.
C)the target market.
D)vendor relations.
E)the product type,and the target market.
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Chapter 15: Global Operations and Supply Chain Management
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Q1) When a country needs new job creation,it follows that government officials will insist on the use of labor-intensive processes.
A)True
B)False
Q2) Because inventory is carried at each stage in the supply chain,and because inventory ties up money,it has been argued that the ultimate goal of effective supply chain management systems is to reduce inventory.
A)True
B)False
Q3) While indirect production-oriented goods have been the focus of management attention for many years,the purchasing of goods and services that are part of finished goods-termed indirect procurement-is also critical.
A)True
B)False
Q4) In many companies,the purchasing function has been viewed as prime candidate for outsourcing to other firms,a trend encouraged by rapid developments in E-procurement.
A)True
B)False
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Chapter 16: Managing Human Resources in an International Context
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Q1) The effectiveness of every organization depends to a great extent on how well its:
A)human resources are utilized.
B)production facilities are operated.
C)financial resources are planned.
D)human resources are utilized,how production facilities are operated,and how financial resources are planned.
E)ads it designs persuade the customer to try its products.
Q2) Please provide an overview of the major issues a compensation package for expatriates should address.
Q3) When managers are assigned and move abroad with their families,the most difficult adjustments are frequently for the children.
A)True
B)False
Q4) Managerial positions in overseas operations require more and different skills than do purely domestic executive jobs.
A)True
B)False
Q5) Discuss the advantages and disadvantages of employing third country managers.
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Chapter 17: International Accounting and Financial Management
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Q1) There are three points at which operating in a foreign currency raises accounting issues: when transactions are made in foreign currencies,when foreign subsidiaries consolidate their results to the parent company,and when debt is acquired in foreign currencies.
A)True
B)False
Q2) For the conservative international firm,there is no reason to move money other than the repatriation of profits.
A)True
B)False
Q3) The temporal method of translation translates fixed assets at the rates in effect the day the assets were acquired.
A)True
B)False
Q4) Discuss the risks associated with transaction exposure and how to hedge them.
Q5) FASB 52 requires that companies record foreign currency based transactions at the spot rate at the time of the transaction.
A)True
B)False
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