Accounting
Anthropology
Archaeology
Art History
Banking
Biology & Life Science
Business
Business Communication
Business Development
Business Ethics
Business Law
Chemistry
Communication
Computer Science
Counseling
Criminal Law
Curriculum & Instruction
Design
Earth Science
Economic
Education
Engineering
Finance
History & Theory
Humanities
Human Resource
International Business
Investments & Securities
Journalism
Law
Management
Marketing
Medicine
Medicine & Health Science
Nursing
Philosophy
Physic
Psychology
Real Estate
Science
Social Science
Sociology
Special Education
Speech
Visual Arts
Business Communication
Q:
__________ permits a firm to set up an export program with a minimum of cash outlay and little special expertise.
A. A joint venture
B. Direct exporting
C. Franchising
D. Indirect exporting
E. Licensing
Q:
Companies wishing to export must first choose between:
A. exporting directly and using sales companies.
B. exporting indirectly and using joint ventures.
C. exporting directly and exporting indirectly.
D. exporting directly and licensing.
E. none of the above.
Q:
Which of the following are reasons that many firms engage in exporting?
A. Exports can allow the firm to meet customer requests for the firm to export.
B. Exports can help a company to remain price competitive in the home market.
C. Exports are the best way for gaining information about foreign markets and competition.
D. All of the above.
E. Two of A, B, and C.
Q:
Which of the following are reasons that many firms engage in exporting?
A. Exports can allow the firm to serve markets where it has no or limited production facilities.
B. Exports can offset cyclical sales in the firm's domestic market.
C. Exports can test foreign markets and foreign competition inexpensively.
D. All of the above.
E. Two of A, B, and C.
Q:
Which of the following are reasons that many firms engage in exporting?
A. Exports enable the firm to serve markets where it has sufficient production facilities.
B. Exports can offset cyclical sales in the firm's domestic market.
C. Exports eliminate the risk of losing the firm's technology to potential competitors.
D. All of the above.
E. Two of A, B, and C.
Q:
Most firms begin their involvement in overseas business by:
A. exporting.
B. licensing.
C. joint ventures.
D. wholly owned subsidiaries.
E. none of the above.
Q:
Cluster analysis is a technique for dividing objects into groups based on geographic or economic similarity.
Q:
When the historic growth rates of a product are known, future growth can be forecast by means of trend analysis.
Q:
Trend analysis assumes that past conditions will remain constant.
Q:
Trend analysis and cluster analysis are used in the third screening phase.
Q:
Estimation by analogy is an example of a market factor.
Q:
The e-commerce potential index developed in the text includes three indexes: market size, market growth rate, and e-commerce readiness.
Q:
Market indicators measure relative market weaknesses.
Q:
Market indicators are economic data that correlate highly with market demand for a product.
Q:
Market indicators and market factors measure market demand.
Q:
A complete financial analysis is part of the financial and economic forces screening process.
Q:
Analysis of the paying habits of customers is studied as part of the sociocultural forces screening.
Q:
Smaller nations would like patent protection:
A. extended, to allow 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.
E. to be the same for government patent holders as for multinational companies.
Q:
WIPO is a:
A. UN agency that administers intellectual property treaties and advises countries on intellectual property-related administrative issues.
B. WTO group opposed to patent extension and pro-generic.
C. part of the Club of Rome that lobbies for longer patent periods.
D. a research arm of the fuel cartel that has been advocating longer patent protection for biofuel processing systems.
E. creation of the Paris Union.
Q:
WIPO and TRIPS represent:
A. patent harmonization agreements in Southeast Asia and the EU, respectively.
B. anticounterfeiting agreements in Korea and North America, respectively.
C. WTO and UN agreements on IP.
D. UN and WTO agencies or programs that focus on IP.
E. international governments during litigation at the World Court.
Q:
Patent treatment is standardized thanks to:
A. the WTO.
B. the UN Commission on Patents.
C. domestic laws in various nations.
D. the Paris Union.
E. the ACTA.
Q:
A patent gives the inventor:
A. property rights for 10 years.
B. the right to use the invention until development costs are recouped.
C. exclusive rights to manufacture, exploit, use, and sell the invention for a given time period.
D. the right to keep the patented process but not the product for five years.
E. two of the above.
Q:
With patents:
A. there is standardization, to some degree, through the Paris Union.
B. there is no standardization, so often companies such as Nestl file many patent applications in different countries.
C. total harmonization has been reached through UN accords and the EPO.
D. an inventor is automatically granted rights to her invention as long as she completes a patent filing.
E. the first person to file is the one who receives patent protection.
Q:
Patents are government grants that give the owner:
A. exclusive rights to use, sell, manufacture, or exploit the invention or process.
B. the exclusive right to use the fundamental ideas on which the invention is based.
C. the right to sell the invention, but only beyond the patent-granter's borders.
D. rights to the invention but do not prevent others from copying the invention.
E. two of the above.
Q:
Intellectual property:
A. excludes intangibles, which is why it is a difficult area.
B. includes thoughts and ideas, but not tangible products.
C. includes anything that is a result of a creative process that does not have material qualities.
D. includes anything that is the result of things created using someone's intellect.
E. excludes things found in nature, such as natural colors, scents, and sounds.
Q:
Usually, it is reasonable to assume that foreign law:
A. will be similar to U.S. law.
B. will differ from U.S. law and must be understood.
C. won't matter because you and your trading partner will agree to arbitrate.
D. will be biased against the foreigner.
E. will vary but that U.S. law will take precedence.
Q:
Legal uncertainties have affected international business, and:
A. they have prevented IB growth.
B. they have not, though, slowed down the growth of IB; instead, they have made it more complex.
C. prices and insurance costs have risen.
D. fewer large businesses want to be involved across national borders due to the uncertainties of the legal environment.
E. none of the above.
Q:
Incoterms include:
A. FAS and DAF.
B. CFR and COD.
C. INSAP and ECO.
D. SAE and EBI.
E. DOA and EDP
Q:
The degree to which a country's legal system is based on the rule of law makes no difference; it is personal relationships that matter in foreign environments.
Q:
According to the World Health Organization, about one-quarter of all drugs sold through "questionable" Internet pharmacies are estimated to be counterfeit.
Q:
Discuss the terrorist threat of kidnapping and how it impacts international business.
Q:
Discuss barriers to trade, using examples to illustrate your points.
Barriers to trade may be divided into tariff barriers and nontariff barriers. Tariff barriers are import duties whose primary purpose is to raise the selling price of the import in the importing country's market. This reduces competition for domestic producers. Countries may also use tariffs to raise revenue on both imports and exports. Tariffs may vary depending on local content and also relative to the good's selling price in the importing market. Nuisance tariffs are tariffs imposed for their administrative hassle rather than to affect market price.
Q:
What is dumping, and why is it found to be problematic?
Q:
The owners of private companies sometimes complain that government-owned companies have unfair advantages. Discuss some of these complaints.
Q:
Define and discuss country risk assessment, using examples to illustrate your points.
Country risk assessment (CRA) is an evaluation of the risk of losing an investment in a particular country. It may be conducted by a bank or business and is increasingly political in nature.
The risks themselves may be economic or financial and include the balance-of-payments position, inflation levels, labor conditions, productivity levels, and militancy in unions. Government instability that would lead to currency convertibility restrictions, tariffs and quota changes, and tax rate and labor permit changes are also assessed. Reliability and impartiality of the legal system and the risk of terrorism may be assessed as well. CRA is affected by the nature of the business. Is it a hotel or a mining company? Also important is the length of time an investment would need to yield a satisfactory return. CRA is often conducted piecemeal by various company departments, and, increasingly, outside firms are involved in CRA. Examples of these points will vary.
Q:
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.
E. none of the above.
Q:
Barriers to trade:
A. are a political issue but affect the cost of imports only marginally.
B. cost consumers billions of dollars per year.
C. save jobs in unprotected industries at $231,289 per job per year.
D. none of the above.
E. two of A, B, and C.
Q:
Standards are a way to establish nontariff barriers, and examples are:
A. all of B, C, and D.
B. Japan's refusal to import light mayonnaise.
C. Canada's categorization of orange juice with added calcium as a drug and subject to special requirements.
D. the prohibition of imported drugs at the consumer level in the United States.
E. two of B, C, and D.
Q:
Customs procedures in many countries often:
A. are transparent and fair.
B. discriminate against imports and favor exports.
C. are online and impersonal.
D. two of the above.
E. all of A, B, and C.
Q:
Government protection of economic activities is:
A. two of the following.
B. a historical function of government.
C. a recent responsibility of government.
D. a socialist characteristic.
E. stronger in democracies.
Q:
Nationalization and privatization are:
A. similar trends.
B. opposing trends.
C. both risks faced by privately held firms.
D. both risks not encountered in capitalist democracies.
E. two of the above.
Q:
With privatization:
A. assets are transferred from the public sector to the private sector.
B. stock is bought back so that the company no longer has public shareholders.
C. state activities are moved into private management through contracts.
D. all of the above.
E. two of A, B, and C.
Q:
Privately owned companies sometimes complain that government-owned companies have the following unfair advantages:
A. higher-cost financing.
B. ability to charge higher prices.
C. access to government contracts.
D. all of the above.
E. two of A, B, and C.
Q:
The reasons a government may nationalize a firm include:
A. to get government contracts.
B. to promote the ideology of capitalism.
C. to preserve jobs.
D. all of the above.
E. two of A, B, and C.
Q:
The reasons a government may nationalize a firm include:
A. to extract more money from the firm.
B. to increase the firm's profitability.
C. to preserve jobs.
D. all of the above.
E. two of A, B, and C.
Q:
Sanctions against nations are not a form of trade restriction because the motivation is political.
Q:
The national defense argument for trade restrictions suggests that some industries, even if they are not competitive, need protection from imports.
Q:
Trade barriers create costs that are paid by the government erecting the barrier.
Q:
Nontariff barriers that are not quantitative can be divided into two groups, those that are established by the government participation in trade and those that are administrative.
Q:
Voluntary export restraints are imposed by the importing nation to avoid violating WTO rules.
Q:
Climate is probably the most important element of the physical forces, as it sets the limits on:
A. annual rainfall, and thus water supply.
B. population growth patterns.
C. what people can do physically and economically.
D. expected FDI.
Q:
Proximity is a factor in explaining:
A. a nation's political system.
B. the number of a nation's political and trade relationships.
C. language patterns.
D. demand conditions.
Q:
Porter's diamond is a model that offers an explanation of:
A. differing levels of success among the national players in world markets.
B. endowment factor differentials.
C. the impact of climate on development.
D. macro-level FDI.
Q:
A specific example of a sustainable business is Patagonia, as evidenced in its:
A. Footprint Chronicles program that addresses the trade-offs global sourcing creates and evaluates the impact of sourcing decisions.
B. ecosystem model of sustainability that relies on the synergies between financial, environmental, and social elements.
C. product lines and credit policies.
D. A and B.
Q:
What two aspects of the culture frameworks would you share with a colleague leaving on her first foreign assignment, and why?
Q:
Why should international managers study the religion of the country they are planning to work in even if they are not especially interested in the general area of religion?
Q:
Explain Trompenaars' achievement-ascription dimension, and comment on its usefulness in an international business setting.
The achievement-ascription dimension focuses on the basis of social status and reward. Achievement has to do with rewards accruing as a result of what a person does. Ascription has to do with rewards accruing as a result of who a person is, her family, her sect, her lineage, or other attributes.
Q:
One danger of using the frameworks in this chapter is that if they are applied prescriptively, they may well lead to a sophisticated form of stereotyping. Explain this danger and suggest ways to avoid it.
Q:
Discuss Hall's high- and low-context framework, and suggest how it might be useful in an international business situation.
Q:
The specific-diffuse dimension looks at:
A. work behaviors.
B. organizational loyalty.
C. attitudes toward public and private life.
D. attitudes toward paternalism.
Q:
If people consider the context and relationships when they make decisions about the application of rules, they are likely to be:
A. universalist.
B. particularist.
C. achievement-oriented.
D. individualist.
Q:
Which country does not belong to the OECD?
A. Belgium
B. France
C. Japan
D. China
Q:
Regional trade agreements such as NAFTA can be seen to impact the WTO:
A. negatively, because they undercut the nondiscrimination principle of the WTO.
B. positively, because they extend most-favored-nation status to more nations.
C. negatively, because they compete with the WTO for membership, since nations can belong to only one trade group.
D. negatively, because the United States and the EU do not have a regional trade agreement between them.
Q:
Two good places to begin country-level research are the websites of the:
A. CIA and UN.
B. UN and WTO.
C. BIAC and CIA.
D. specific country's government and OECD.
Q:
The WTO has made progress on trade-related intellectual property rights (TRIPS). An example of this progress is:
an agreement that property rights should not take precedence over public health.
C. a shared recognition that private property is a basic human right.
D. an agreement that governments should hold all pharmaceutical trade secrets.
The TRIPS agreement recognizes that property rights should not take precedence over public health. All adopting countries have the right to copy drugs patented before 1995.
Q:
The OECD has encouraged members to:
A. develop trade relationships within the OECD only.
B. eliminate bribery in all commercial transactions.
C. standardize electrical wave signals.
D. extend their tax regulations beyond their borders.
Q:
The Doha Development Agenda is:
A. a WTO plan to establish free trade among the emirates in the Persian Gulf.
B. the government seat of Qatar and source of significant WTO funding through Sheik Kalifa al-Thani.
C. a UN plan to develop the Arab Emirates to ensure their independence.
D. an extended conference of the WTO initially convened in Doha.
Q:
The main purpose of the OECD is to:
A. provide economic research and a discussion forum.
B. function as a developed-nation cartel.
C. limit growth in developing economies.
D. support trading patterns within the group of developed nations.
Q:
Is the WTO's idea of "fair competition" really a code phrase for free trade?
A. Yes, the WTO is in favor of free trade and only free trade under all circumstances.
B. Not really. Trade relationships among nations can be exceedingly complex, and the WTO supports fair competition, which may mean freer trade rather than free trade.
C. Yes, the WTO stands for trade liberalization, which requires transparency, economic reform, and no protectionism, regardless of the member nation's economic situation.
D. Yes. The WTO supports free trade and the term fair competition is used to obtain buy-in from nations opposed to trade liberalization.
Q:
The OECD is called the "rich man's club" because its members:
A. are rich and male.
B. are 34 of the world's wealthiest nations.
C. are concerned with increasing their own wealth rather than promoting development.
D. promote wealth at the cost of health and safety.
Q:
The WTO exists to:
A. establish and help implement rules of trade among nations in order to increase trade flows.
B. monitor and reduce the amount of trade from developing nations to developed nations.
C. ensure that the industrial revolution continues to support the economies of developed nations.
D. B and C.
Q:
EU rulings:
A. affect all businesses headquartered within the EU.
B. affect all businesses within the EU and those that trade within the EU.
C. limit businesses outside the EU but not in the United States.
D. are of no importance outside the EU.
Q:
Under new institutional theory, institutions can be categorized as formal and informal, and the informal institutions can be further categorized as:
A. normative and cognitive.
B. normal and abnormal.
C. informally cognitive and formally cognitive.
D. effective and ineffective.
Q:
The WTO supports trade with discrimination as a basic right of trading nations.
Q:
The EU's impact on international business is:
A. negligible, since the EU members tend to trade with each other.
B. not significant, since the EU members need to trade with other developed economies.
C. substantial, since EU standards, especially in the areas of ecology and sustainability, impact any firm that wants to do business in the EU.
D. substantial, since the EU is a major exporter into developing nations.
Q:
The International Finance Corporation (IFC) acts as an investment banker, arranging private risk ventures in developing countries.
Q:
The impact of the EU on the WTO could be said to be negative, since:
A. a country could belong to only one of these organizations.
B. the favored trade relationships among EU members are not extended to nonmember countries, so the EU undercuts the WTO.
C. the euro threatens other hard currencies supported by the WTO, such as the dollar and the yen.
D. the WTO does not collect dues from EU member-nations.
Q:
The World Bank is made up of one large institution, IBRD.
Q:
The Council of European Union, the primary policy-setting institution of the EU, is composed of:
A. the member-states' prime ministers or presidents.
B. the member-states' ministers who represent the specific area being discussed.
C. elected members from across Europe, elected by country.
D. appointed representatives from each member-state.
Q:
Some think that renewed focus on exchange rates would be a good path forward for the IMF, which is struggling with core issues related to its purpose.