International Business, 16th edition BY John D. Daniels
Email: richard@qwconsultancy.com
International Business, 17e (Daniels) Chapter 1 Globalization and International Business 1) In terms of international business, it is most accurate to say that ________. A) there is a universal "best way" to conduct business B) global competition affects large companies but not small ones C) most firms depend either on foreign markets and supplies or compete against companies that do D) government regulation of international business has little effect on a company's profits Answer: C Diff: 2 Skill: Concept Objective: 1-1 Explain why and how the study of international business (IB) is important AACSB: Reflective thinking 2) Individuals should most likely study international business to ________. A) comply with graduate school certification requirements B) ensure that an employer has a global online presence C) remain current on the latest business methods D) obtain bilingual business experience Answer: C Diff: 1 Skill: Application Objective: 1-1 Explain why and how the study of international business (IB) is important AACSB: Application of knowledge 3) Devon, an accounts manager at a large electronics firm, does not have any direct international responsibilities; however, Devon would most likely benefit from studying international business issues so that he can ________. A) conduct better job interviews B) better understand how foreign operations affect the company's competitive position C) supervise and evaluate subordinates who have global assignments D) understand the legalities of importing and exporting products overseas Answer: B Diff: 2 Skill: Application Objective: 1-1 Explain why and how the study of international business (IB) is important AACSB: Application of knowledge
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4) Why is it relevant for today's business students to study international business and to become culturally literate? Answer: There are several reasons to study international business. Most large organizations will have international operations or be affected by the global economy. In addition, an understanding of international business will allow students to better assess career opportunities, interact more effectively with other managers, and keep pace with competitors. Furthermore, students may eventually work for a company headquartered in another country. Finally, small businesses are becoming more involved in international business. Being culturally literate means having an understanding of different countries and cultures. Having some knowledge of how a country or company fits into the global economy can help a business person earn respect, confidence, and a competitive edge. Diff: 2 Skill: Concept Objective: 1-1 Explain why and how the study of international business (IB) is important AACSB: Reflective thinking 5) How does international business differ from domestic business? Why is it important for business students to learn about international business? Answer: Domestic business involves transactions that occur within a single country, while international business involves transactions that cross national borders. Students should learn about IB because most large firms have global operations and many small firms are expanding into the international arena. Diff: 2 Skill: Concept Objective: 1-1 Explain why and how the study of international business (IB) is important AACSB: Reflective thinking 6) The widening set of interdependent relationships among people from different parts of the world is known as ________. A) globalization B) offshoring C) franchising D) outsourcing Answer: A Diff: 1 Skill: Concept Objective: 1-2 Understand the relationship between globalization and IB AACSB: Reflective thinking
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7) Which of the following best defines international business? A) It includes all economic flows between two or more countries. B) It includes all private economic flows between two or more countries. C) It includes all business transactions involving two or more countries. D) It includes all business transactions in countries other than your home country. Answer: C Diff: 2 Skill: Concept Objective: 1-2 Understand the relationship between globalization and IB AACSB: Reflective thinking 8) International business is more complex than domestic business. Answer: TRUE Diff: 1 Skill: Concept Objective: 1-2 Understand the relationship between globalization and IB AACSB: Application of knowledge 9) Globalization refers to all economic transactions among countries. Answer: FALSE Diff: 1 Skill: Concept Objective: 1-2 Understand the relationship between globalization and IB AACSB: Reflective thinking 10) Globalization has allowed firms to expand into markets that, until recently, were separated from the international marketplace. Answer: TRUE Diff: 1 Skill: Concept Objective: 1-2 Understand the relationship between globalization and IB AACSB: Application of knowledge 11) It is difficult to compare globalization of business over time because shifting national borders have changed the nature of transactions from domestic to international and vice versa. Answer: TRUE Diff: 2 Skill: Concept Objective: 1-2 Understand the relationship between globalization and IB AACSB: Application of knowledge
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12) Globalization enables companies to get a greater variety of products with better quality and with lower prices. Answer: TRUE Diff: 2 Skill: Concept Objective: 1-2 Understand the relationship between globalization and IB AACSB: Application of knowledge 13) What is globalization? What modes of international business are used by firms that want to globalize? Briefly describe each method. Answer: Globalization refers to the widening set of interdependent relationships among people from different parts of a world that happens to be divided into nations. The term can also refer to the integration of world economies through the elimination of barriers to movements of goods, services, capital, technology, and people. Firms have many options available when they want to globalize their operations including licensing, franchising, turnkey operations, management contracts, and direct/portfolio investment. a. Licensing and franchising–Licensing agreements are used when companies allow others to use their assets, such as trademarks, patents, copyrights, or expertise under contract. Franchising is a mode of business in which one party allows another party the use of a trademark that is an essential asset for the franchisee's business. b. Turnkey operations–Refers to business operations, performed under contract, that are transferred to the owner when they are ready to begin operating. c. Management contract–Refers to arrangements in which one company provides personnel to perform general or specialized management functions for another company. d. Direct and portfolio investment–A direct investment is one that gives the investor a controlling interest in a foreign company. A portfolio investment is a noncontrolling interest in a company or ownership of a loan to another party. Diff: 3 Skill: Synthesis Objective: 1-2 Understand the relationship between globalization and IB AACSB: Analytical thinking 14) The shifting of national borders has most likely created which of the following situations for international business? A) It has left rural residents more isolated from technology. B) It has complicated the understanding of behavioral factors affecting business. C) It has increased physical barriers to exporting. D) It has slowed communications between a company's headquarters and foreign operations. Answer: C Diff: 3 Skill: Concept Objective: 1-3 Grasp the forces driving globalization and IB AACSB: Reflective thinking
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