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Managing in a Global Environment Exam Preparation Guide
Course Introduction
This course explores the challenges and opportunities facing managers in an increasingly interconnected world. Students will examine how cultural, economic, legal, and political differences influence business decisions and management practices across borders. The curriculum covers topics such as global strategy formulation, cross-cultural communication, international organizational structures, and the management of diverse teams. By analyzing real-world cases and participating in interactive activities, students will develop the skills needed to effectively navigate the complexities of international business environments and make informed managerial decisions in a global context.
Recommended Textbook
International Business Environments Operations 14th Edition by John Daniels
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Page 2
Chapter 1: Globalization and International Business
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Q1) A computer firm has high foreign sales in Asia and wants to expand sales into Europe. Which of the following statements provides the most appropriate advice for Elway executives?
A) Although countries' market sizes differ, companies usually face about the same number of competitors in each national market.
B) In most industries, companies face the same competitors in each country where they operate.
C) It takes about the same amount of resources to gain national distribution in one country versus another.
D) Being a leader in one country does not guarantee market leadership in another country.
Answer: D
Q2) When a U.S. citizen flies Japan Airlines,the airline acts as a service exporter for Japan. A)True
B)False
Answer: True
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3
Chapter 2: The Cultural Environments Facing Business
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Q1) American hamburgers,Japanese sushi,Italian pizza,Mexican tacos,and Middle Eastern pita bread are now commonly found in most countries. This best supports the argument that ________.
A) although visible expressions of culture are becoming homogenized, basic differences in societal values remain strong
B) globalization fulfills lower order needs in Maslow's hierarchy
C) cultural imperialism is increasingly widespread
D) cultural hybridization is occurring
Answer: D
Q2) Ellen,a U.S. citizen,worked for a U.S. firm in Germany for four years and was transferred back to the firm's home office in Chicago two months ago. Ellen feels significant dissatisfaction with her job and life in Chicago,which is most likely a result of
A) reverse culture shock
B) polycentrism
C) culture shock
D) ethnocentrism
Answer: A
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Chapter 3: The Political and Legal Environments Facing Business
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Q1) In a country that emphasizes collectivism,________.
A) the interests of the individual are more important than the interests of the state
B) one person or political party exercises absolute control over the political and economic systems
C) the needs of society and the needs of individuals are treated as equally important
D) the needs of society take precedence over individual freedoms
Answer: D
Q2) Totalitarianism is a political ideology that typically involves constant indoctrination of the population by agents of the government to eliminate dissent.
A)True
B)False
Answer: True
Q3) The fundamental element of democracy is justice.
A)True
B)False
Answer: False
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Page 5
Chapter 4: The Economic Environments Facing Businesses
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Q1) History suggests that if the economic crisis worsens,we are likely to see more people question the ________.
A) fall of communism
B) legitimacy of capitalism
C) practicality of mixed market economies
D) correlation between economic freedom and prosperity
Q2) Which of the following countries is the best example of a mixed economic model?
A) United States
B) France
C) United Kingdom
D) Australia
Q3) Pender Pharmaceuticals is considering expanding overseas and is focusing primarily on the BRICs. Which of the following countries is one that Pender is considering?
A) Indonesia
B) Chile
C) Russia
D) Bangladesh
Q4) What is the difference between a command economy and state capitalism?
Q5) What is inflation? How does inflation affect international business?
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Chapter 5: Globalization and Society
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Q1) Normativism asserts that universal standards of behavior exist and should be accepted in all cultures.
A)True
B)False
Q2) Which of the following is permitted by the Foreign Corrupt Practices Act?
A) a bribe paid by foreign firms operating in U.S. territories
B) a bribe paid by U.S. firms operating in a foreign country that permits bribes to be paid
C) a payment to a foreign government official to influence a customs official
D) a payment to a customs official to clear legitimate merchandise
Q3) The U.N. Global Compact is best described as a(n)________.
A) corruption mandate
B) environmental initiative
C) external code of conduct
D) international trade guideline
Q4) Under the practice of extraterritoriality,legal and ethical values in a country may cause its companies to operate abroad according to home country laws rather than host country laws.
A)True
B)False
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Chapter 6: International Trade and Factor Mobility Theory
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Q1) Under mercantilism,colonial powers sought to run trade surpluses with their colonies by preventing the colonies from manufacturing.
A)True
B)False
Q2) The foreign-born population as a percentage of total population is substantial for some countries and insignificant for others.
A)True
B)False
Q3) Countries with large land areas are generally less dependent on trade than countries with small land areas.
A)True
B)False
Q4) An exception to the PLC theory in terms of production location is often a product with very rapid change in innovation.
A)True
B)False
Q5) What assumptions underlie the theories of specialization in international trade? What are the limitations of these assumptions?
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Chapter 7: Governmental Influence on Trade
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Q1) Advocates of the comparable access argument for trade protection primarily assert that domestic industries ________.
A) will deteriorate in countries that have lower import restrictions than their trading partners
B) should be required to implement export-led development policies on foreign competitors
C) are entitled to the same access to foreign markets as foreign industries have to their markets
D) are forced to lower prices for domestic consumers because of foreign import restrictions
Q2) On average,workers displaced by imports earn higher wages in the new jobs they accept.
A)True
B)False
Q3) The term protectionism,when applied to international trade,refers to governmental restrictions and incentives to affect trade flows.
A)True
B)False
Q4) Describe and compare the different types of tariffs (duties).
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Chapter 8: Cross-National Cooperation and Agreements
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Q1) Each country in NAFTA sets its own tariffs to the rest of the world.
A)True
B)False
Q2) NGOs must be recognized by the United Nations in order to do humanitarian work in developing countries.
A)True
B)False
Q3) Baldani Manufacturing,an Italian firm,plans to expand into Asia. In order to take advantage of regional trading groups,Baldani will most likely need to change its ________.
A) operating strategies
B) selection test methods
C) bilateral trade agreements
D) economic integration methods
Q4) Which of the following are members of NAFTA?
A) the United States, Canada, and Mexico
B) North America and Latin America
C) the United Kingdom, the United States, and Canada
D) the United States, Canada, and Brazil
Q5) 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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Q1) Why would companies become involved in arbitrage? What is the difference between arbitrage and interest arbitrage?
Q2) In the spot market,the ________ is the difference between the bid and offer rates and is the trader's profit margin.
A) bid
B) offer
C) cross rate
D) spread
Q3) As a center for foreign exchange trading,London ________.
A) actually trades more U.S. dollars than are traded in the United States
B) usually opens up for business as trades are winding down in the United States
C) deals primarily in European currencies and is not as active in trading U.S. dollars
D) deals primarily in spot rather than forward trades
Q4) Which of the following best describes arbitrage?
A) using foreign exchange to fund new foreign direct investments
B) purchasing foreign currency in anticipation of long term trends
C) using foreign exchange instruments to speculate for profit
D) purchasing foreign currency on one market for immediate resale on another market
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Chapter 10: The Determination of Exchange Rates
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Q1) Given the daily volume of foreign-exchange transactions,it is most accurate to say which of the following?
A) It is impossible for a government's interventions in the foreign-exchange market to affect market psychology.
B) A government's intervention in the foreign-exchange market can reverse a currency's slide for the long term.
C) A government's intervention cannot force the foreign-exchange market to move in a direction it doesn't want to go.
D) A government should focus more on intervening in foreign-exchange markets than on correcting economic fundamentals.
Q2) Which of the following links together the central banks of the world and acts as a central banker's bank?
A) the IMF
B) the World Bank
C) the BIS
D) the EMU
Q3) What is a black market? Under what conditions might one exist?
Q4) What is a Special Drawing Right (SDR)? How is it used?
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Page 12
Chapter 11: The Strategy of International Business
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Q1) Which of the following refers to the means by which management applies the systems that link a company's value activities,whether those activities are performed in one or in many countries?
A) configuration
B) logistics
C) coordination
D) core competency
Q2) Mobile Technology is a company that sees the world as a single market,assuming that consumer preferences and industry conditions do not vary much among countries. Mobile Technology is likely to adopt a global strategy.
A)True
B)False
Q3) The fundamental outlook of the global strategy is adaptation.
A)True
B)False
Q4) What is the Industry Organization (IO)paradigm? Discuss the underlying assumptions of this model.
Q5) What is configuration? Briefly list and discuss the factors that influence value chain configuration.
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Chapter 12: Country Evaluation and Selection
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Q1) Losses to companies from natural disasters are much less risky than losses from operating in violent areas.
A)True
B)False
Q2) What is meant by liability of foreignness? How might this influence location and allocation decisions?
Q3) Comparability of economic information among countries is hampered by countries' use of different definitions for similar terms.
A)True
B)False
Q4) When choosing international operating locations,companies should outsource the preparation of grids or matrices to experts rather than preparing them with their own personnel.
A)True
B)False
Q5) When income inequality is high in a specific country,the per capita GDP figures are more meaningful.
A)True
B)False
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Chapter 13: Export and Import
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Q1) Jordan Jewelry is a U.S. firm that designs,manufactures,and sells inexpensive jewelry and accessories. Executives at the firm believe that Jordan Jewelry could significantly increase its profitability by exporting products to foreign markets. Before engaging in international trade,Jordan executives need to develop an export plan. Which of the following questions is LEAST relevant to this activity?
A) Would Jordan's resources be better utilized developing business in the United States?
B) How much will it cost to get Jordan's products to the targeted markets?
C) What marketing campaign would be best for Jordan's foreign markets?
D) Is exporting consistent with Jordan's long-term goals?
Q2) Vandelay Designs is a small firm based in Boston that makes and sells scrapbooking products through its retail store and Web site. Many of Vandelay's first sales were made to customers located in Canada,England,and Japan. Vandelay Designs would best be identified as a(n)________.
A) incremental exporter
B) occasional exporter
C) born global
D) geo-expo
Q3) What is a born global? How has technology triggered the growth of born globals?
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Chapter 14: Direct Investment and Collaborative Strategies
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Q1) Large companies that have resources to go it alone may have advantages in product development over small companies that do not because ________.
A) evidence suggests that collaborative arrangements slow the speed of innovation
B) large companies can dictate their terms of operations abroad
C) small companies are disadvantaged in legal settlements
D) large companies need not adapt to national differences
Q2) A U.S. firm owns 100% of its production facility in Brazil,thus is most likely using a ________ strategy.
A) comprehensive ownership
B) vertical integration
C) appropriability
D) internalization
Q3) What is a management contract? What are the potential advantages to both parties in the contract?
Q4) Licenses are often given to companies owned in whole or in part by the licensor. A)True
B)False
Q5) Explain how franchising agreements differ from licensing agreements.
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Chapter 15: The Organization of International Business
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Q1) A major benefit of the international division structure is ________.
A) outsourcing distribution and shipping tasks
B) responding quickly to foreign events
C) diversifying most product groups
D) hiring low-cost, local workers
Q2) The idea of ________ involves how a company specifies organizational tasks; divides those tasks into jobs,departments,subsidiaries,and divisions; and then assigns authority and authority relationships.
A) systemic differentiation
B) horizontal differentiation
C) vertical differentiation
D) schematic differentiation
Q3) According to the unity-of-command principle,workers and organizations benefit the most from dual hierarchies of communication.
A)True
B)False
Q4) Coordination methods include mutual adjustment,planning,and standardization.
A)True
B)False
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Chapter 16: Marketing Globally
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Q1) Some critics complain that MNEs introduce and promote superfluous products in developing countries,causing consumers there to buy these products rather than things they need for their health. People answering this criticism have contended that
A) consumers don't buy things because of promotion
B) the amount spent on so-called superfluous products is insignificant
C) it is impossible to draw a line between people who can afford and people who can't afford these products
D) these products serve to motivate people in developing countries to work harder
Q2) The marketing orientation used by Bantam Shoes for its foreign sales focuses primarily on efficiency and product quality. Bantam most likely uses a ________.
A) production orientation
B) customer orientation
C) sales orientation
D) strategic marketing orientation
Q3) What challenges are created by selling internationally through the Internet? How does e-commerce affect pricing?
Q4) How do language differences affect international branding and promotion?
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Chapter 17: Global Manufacturing and Supply Chain Management
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Q1) Vertical integration occurs when the company owns the entire supplier network or at least a significant part of it.
A)True
B)False
Q2) The manufacturing plants of Orion Computers are located closer to customers rather than in low-wage areas. What is the most likely reason for this strategy?
A) competitor locations in emerging markets
B) overseas producers with innovative designs
C) customer demand for dependability
D) diversification of product lines
Q3) Warehouse configuration is a particularly important consideration in the establishment of a transportation network.
A)True
B)False
Q4) What factors complicate the international transportation of goods? How can a firm make the process more efficient?
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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Q1) International accounting firms,such as Deloitte and KPMG,have the most influence on
A) international and domestic tax laws
B) public record disclosure rules
C) global auditing practices
D) domestic legal systems
Q2) Financial statements typically include ________.
A) accompanying footnotes, a balance sheet, and a cash-flow statement
B) translations into the languages of every country where the company lists shares
C) different currency results to reflect the different countries where the company has investments or generates revenues
D) different reports detailing the differences in generally accepted accounting principles used by the company in different countries
Q3) In regards to accounting,what is the impact of the SEC and Sarbanes-Oxley Act on international business?
Q4) What metrics are used to measure the performance of an MNE? How is the balanced scorecard approach unique?
Q5) In a brief essay,discuss the concepts of transfer pricing and hedging.
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Chapter 19: The Multinational Finance Function
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Q1) When using a lag strategy,a company collects foreign-currency receivables before they are due when the foreign currency is expected to weaken.
A)True
B)False
Q2) Brooke buys shares of stock in a small bakery in a foreign country in return for an ownership position and promised capital gains. This is an example of ________.
A) equity securities
B) debt financing
C) playing the stock market
D) investing in Euroequities
Q3) A tax credit is a credit on goods and services paid by one member of a corporate family to another.
A)True
B)False
Q4) The combined effect of an exchange-rate change on the financial statements of a foreign subsidiary is neither a gain nor a loss because of accounting rules.
A)True
B)False
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Chapter 20: International Human Resources
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Q1) Studies of repatriated employees regularly report that most knew what their company position would be when they returned home but were uncertain about their likely new workplace practices.
A)True
B)False
Q2) Today,most expatriate assignments are for ________.
A) less than one year
B) one to three years
C) three to five years
D) five to ten years
Q3) Companies find it challenging to judge a potential expatriate's adaptability to foreign places,people,and processes.
A)True
B)False
Q4) The headquarters-based compensation method bases the expatriate's compensation on the salary of a comparable job in the city where the MNE has its headquarters.
A)True
B)False
Q5) List and discuss the main components of an expatriate's compensation package.
Page 22
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