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Question
Explain the principles on which The Economist's Big Mac index is built, and comment on its use to international managers.
Answer
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Related questions
Q:
An important consideration in design is the extent to which the international company's products and services will be standardized across nations or regions.
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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.
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Supply chains are an integral part of global quality and cost management initiatives, since a typical company's supply chain costs can represent over 80 percent of assets.
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What are the options for global electronic procurement, and what are the benefits of such systems?
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What are the reasons for sourcing globally, and what options are available to a firm that wishes to engage in global sourcing?
Q:
What is supply chain management, and why is it an important issue for a company's international competitiveness?
Q:
Mass customization:
A. is enhanced by a company's use of computer-aided manufacturing systems to produce and deliver products and services in a batch size of one.
B. is usually appropriate in situations where there is the potential for differentiating a product for a particular customer.
C. typically requires the company to reconceptualize the design of its products as well as the design and integration of the processes used for producing and delivering the product to customers.
D. all of the above
E. two of A, B, and C
Q:
When a new plant can be built that is a duplicate of others already functioning:
A. labor trainers experienced in the operation of the machinery can be sent to the new locations without undergoing any training.
B. costs will be the same as in existing locations.
C. vendors will be requested to furnish equipment that they have supplied previously.
D. all of the above.
E. two of A, B, and C.
Q:
Whether the functional currency is local or the parent company's currency, owner's equity is always translated at:
A. the rate in effect when the stock was issued.
B. the rate in effect the day of the consolidation.
C. the rate in effect the day of the journal entry.
D. the method of the company's choice, but consistency is required.
Q:
Swap contracts are agreements to exchange:
A. currencies at specified rates at specified times in the future.
B. equity shares in the future at today's rates.
C. supplier information to ensure competitive pricing.
D. B and C.
Q:
Transaction exposure occurs when:
A. the value of the currency changes between when the asset or liability is recorded and when results are consolidated.
B. the firm has transactions in a foreign currency.
C. the firm's strategic projections use a currency value that has changed.
D. the recorded value of an asset or liability changes between its being reported and its consolidation.
Q:
Please provide an overview of the major issues a compensation package for expatriates should address.
Q:
What challenges often confront the spouses of expatriates, and what options are available for managing these challenges?
Q:
Nancy Adler's research suggests that women:
A. will never get to the top because they take time-out for children.
B. are more likely than men to succeed if they quit the company and start their own businesses.
C. have been remarkably successful in international assignments, which does not seem to be related to gender.
D. are less likely than men to succeed in international assignments.
E. two of the above.
Q:
With regard to the use of women versus men for expat management assignments:
A. few qualified women candidates are available.
B. few women candidates are accepting assignments and enjoying the experience.
C. those women who go into expatriate positions tend to do well. The hurdle is in getting the assignment.
D. the women expatriates are making more money than their male counterparts.
E. two of the above.
Q:
Generalizations about TCNs are difficult because:
A. the IC usually does not know enough about their backgrounds.
B. the geocentric staffing policy prohibits these generalizations.
C. two of A, B, and D.
D. people achieve the TCN status in different ways.
E. all of A, B, and D.
Q:
An advantage of hiring personnel who are citizens of neither the home country nor the host country may be that they:
A. may accept lower wages and benefits.
B. may come from a culture similar to that of the host country.
C. all of A, B, and D.
D. have international experience.
E. two of A, B, and D.
Q:
Home-country nationals may be used in host-country management because:
A. all of B, C, and D.
B. host-country nationals are unavailable.
C. home-country nationals are being groomed for IC headquarters.
D. IC headquarters wants one of its nationals in the host country.
E. two of B, C, and D.
Q:
A regiocentric staffing policy:
A. involves human resource policies that are created at the local level for the specific context in which the local operations operate.
B. may send TCNs to fill management posts, to avoid problems from using PCNs or HCNs.
C. selects the best person for each job, without considering national origin.
D. two of the above.
E. all of A, B, and C.
Q:
A polycentric staffing policy:
A. involves human resource policies that are created at the local level for the specific context in which the local operations operate.
B. results in the company hiring local managers who are familiar with the home country of the IC and with its corporate culture, policies, and practices.
C. may confront the problem of having the best people pirated away by local firms or other IC subsidiaries.
D. two of the above.
E. all of A, B, and C.
Q:
A global mindset:
A. is a "prerequisite for global industry dominance."
B. combines an openness to and awareness of diversity across cultures and markets with a propensity and an ability to synthesize across this diversity.
C. results from a combination of training and language skills.
D. all of the above.
E. two of A, B, and C.
Q:
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. all of the above.
E. two of A, B, and C.
Q:
Bonuses are payments made to compensate expatriates for the extra costs they must incur to live as well abroad as they did in the home country.
Q:
In the method favored by the majority of American ICs, the salary part of an expatriate employee's compensation package will generally be governed by the employee's level in the organization and will not be higher because of the foreign assignment.
Q:
In their measurement and disclosure for accounting systems, less developed countries tend toward:
A. transparency and conservatism.
B. transparency and optimism.
C. secrecy and optimism.
D. secrecy and conservatism.
Q:
In the current rate method, assets and liabilities are translated:
A. at their historical rates.
B. at an average of the historical and current rates.
C. on the date the balance sheet is produced.
D. however the company chooses, as long as it is consistent in all its foreign operations.
Q:
In exposure netting, a risk management technique similar to multilateral netting, the firm runs a centralized clearing account that matches and nets out FX exposure across currencies or currency families.
Q:
Multilateral netting is an approach to debt management in which subsidiaries aggregate their debt service.
Q:
Expatriate children who lived in a foreign country for a period of time while in their impressionable adolescent years often have attributes of "third-world kids."
Q:
As international companies increasingly take the geocentric view, we can be certain to see less use of third-country nationals.