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International Business
Q:
Davis is the manager of a pharmaceutical manufacturing facility in a developing country. The manufacturing unit does not meet the acceptable standards of the manufacturing facility in the home nation. He knows that demanding a better manufacturing unit will raise the cost of the drugs mainly exported to other less developed countries, and hence its price. But he also realizes that by not demanding a better unit, the employees are prone to serious health issues. Davis is facing:
A.a role conflict.
B.the tragedy of the commons.
C.a positivity offset.
D.an ethical dilemma.
E.a negativity effect.
Q:
The practice of "gift giving" between the parties to a business negotiation is considered right and proper behavior in many Asian cultures. However, some Westerners view the practice as a form of bribery, and therefore unethical, particularly if the gifts are substantial. This reflects that:
A.notions of ethics are universal.
B.Asian countries are still under the influence of totalitarianism.
C.what is ethical depends on one's cultural perspective.
D.Asian cultures are more economically advanced.
E.there is unanimous agreement about accepted employment practices.
Q:
Which of the following best exemplifies noblesse oblige?
A.Multinational corporations gaining monopoly rights in developing countries in order to weaken the local competition
B.Multinational corporations funding schools, universities, and hospitals in developing countries
C.Multinational corporations altering the laws of a host country to suit their businesses
D.Multinational corporations bribing poorly paid government officials in a foreign market
E.Multinational corporations moving production to developing countries to exploit their lower employment standards
Q:
In a business setting, the term noblesse oblige refers to:
A.a benevolent behavior that is considered the responsibility of successful enterprises.
B.obliging a government official with the expectation of a reciprocal favor.
C.rich corporations abusing their power for private gain.
D.preferential treatment received by successful companies from governments.
E.tax exemptions that are given only to local companies but not to foreign companies.
Q:
Which of the following refers to the idea that businesspeople should consider the social consequences of economic actions when making business decisions, and that there should be a presumption in favor of decisions that have both good economic and social consequences?
A.Corporate dissonance
B.Class consciousness
C.Corporate dynamism
D.Social responsibility
E.Economies of scale
Q:
Which of the following statements is true of facilitating payments?
A.According to the Foreign Corrupt Practices Act, "facilitating payments" are as illegal as bribes.
B.Facilitating payments are payments to secure contracts that otherwise would not be secured.
C.It is ethical to have a zero-tolerance approach toward facilitating payments.
D.Companies are allowed to make facilitating payments only in developing countries.
E.The concept of facilitating payments was introduced by the UN to put U.S. firms at a competitive disadvantage.
Q:
Brain Wing Inc. has won the bid to build airplanes for a host country government. However, the execution of the contract has been delayed due to certain unproductive, bureaucratic procedures in the less developed nation. In order to legally overcome this problem, Brain Wing Inc. could resort to the payment of:
A.customs duties.
B.excise taxes.
C.expatriation taxes.
D.speed money.
E.repatriation fees.
Q:
The Convention on Combating Bribery of Foreign Public Officials in International Business Transactions:
A.makes it mandatory for companies to adhere to the pollution control standards of their home country in all the nations in which they do business.
B.does not consider facilitating payments a criminal offense.
C.makes grease payments mandatory in order to obtain exclusive preferential treatment in a host nation.
D.considers payment of speed money to be moral, but illegal.
E.makes it obligatory for companies to adopt a zero-tolerance approach toward grease payments.
Q:
In order to build large production units and expedite certain routine government actions related to this, Scorpius Inc. made legal payments to the government officials of a host nation. Such payments are typically referred to as:
A.bribes.
B.speed money.
C.customs duties.
D.excise taxes.
E.preferred dividends.
Q:
The Foreign Corrupt Practices Act was subsequently amended to allow for speed money or grease payments, which are payments made to:
A.secure contracts that would not otherwise be secured.
B.obtain exclusive preferential treatment in a foreign market.
C.influence foreign bureaucrats in the company's favor.
D.ensure a business receives the standard treatment that it ought to receive.
E.secure monopoly rights in less developed countries.
Q:
Which of the following best exemplifies the global tragedy of the commons?
A.A firm exploiting the weak employment standards in a host nation
B.A firm dumping its chemical wastes directly into an ocean
C.A firm exploiting the weak intellectual property rights in a developing nation
D.A neighboring country opposing the introduction of a free trade area
E.A country denying its citizens basic human rights
Q:
In the modern world, corporations can worsen the global tragedy of the commons by:
A.moving production to locations where they are free to pump pollutants into the environment.
B.imposing stringent environmental standards on developing countries.
C.creating common environmental and employment standards for all nations.
D.adopting costly pollution controls and in turn losing out on economic advantages.
E.adhering to civil laws rather than common laws in case of any environmental violations.
Q:
Which of the following occurs when a resource held jointly by all, but owned by no one, is overused by individuals, resulting in its degradation?
A.Social loafing
B.Cultural relativism
C.The tragedy of the commons
D.A deadweight loss
E.Capital deepening
Q:
The term global commons refers to:
A.social norms and values that are common across the globe.
B.a group of nations that share similar ideologies on globalization.
C.natural resources from which everyone benefits but for which no one is specifically responsible.
D.common laws to be obeyed by companies involved in international business.
E.arrangements, like common currencies, between countries to simplify international trading.
Q:
Which of the following is most likely to be considered unethical?
A.Galaxy Inc. ceased its operations in some developing nations on account of low employment standards in those countries.
B.Unicorn Inc. sells its medicines at a lower price in less developed nations.
C.Capricorn Inc., a multinational company operating in developing nations, pays its labor 30 percent more than what the local competitors pay.
D.Centaur Inc. had to close down a production plant as the local management there had employed child labor.
E.Orion Inc. sends its waste products for disposal to a developing nation because the pollution control laws in its home country are much more strict than those in the developing nation.
Q:
Due to certain strict environmental and employment standards in its home nation, Taurus Inc. has shifted its operations to developing nations. Hence, the firm has now been able to gain competitive advantage by avoiding costly pollution controls. This strategic move of Taurus Inc. will be considered:
A.illegal.
B.ethical.
C.immoral.
D.uneconomical.
E.totalitarian.
Q:
Ten years after he proposed what came to be known as Sullivan's principles, Leon Sullivan concluded that following his principles:
A.was the most ethical way of doing business in South Africa.
B.was not sufficient to ethically justify the existence of Western businesses in South Africa.
C.would be effective only when companies opposed democracy in South Africa.
D.had led international companies to successfully combat the apartheid regime in South Africa.
E.would safeguard the citizens and businesses in South Africa from Western businesses.
Q:
Briefly describe the five cultural dimensions in Hofstede's model.
Q:
What are the three values that are central to the Confucian system of ethics?
Q:
Compare and contrast the principles of Hinduism and Buddhism.
Q:
Elaborate on the caste system supported by Hinduism.
Q:
What are the two different banking methods that Islamic banks have experimented with in order to avoid the payment or receipt of interest?
Q:
Describe the different approaches that international businesses take to labor relations.
Q:
How has organized labor responded to the increased bargaining power of multinational corporations?
Q:
In the context of international labor relations, what are the concerns of organized labor?
Q:
Describe any two components of a typical expatriate compensation package.Answers may vary.
Q:
Briefly describe how national differences in compensation can affect an international business.
Substantial differences exist in the compensation of executives at the same level in various countries. These differences raise the question: Should the firm pay executives in different countries according to the prevailing standards in each country, or should it equalize pay on a global basis?
Q:
How does unintentional bias affect the performance appraisal of expatriates? How can it be reduced?
Q:
Describe how management development programs can increase the value of human capital in an international business firm.
Q:
What is repatriation? What is its importance?
Q:
What is the purpose of cultural training before a foreign posting?
Q:
Describe the disadvantages of a polycentric staffing policy.
Q:
What are the reasons for the failure of spouses to adjust to an expatriate's foreign posting?
Q:
What is expatriate failure? According to Tung's survey, what are the different reasons for expatriate failure in U.S. multinationals?
Q:
Define an expatriate manager. Describe the dimensions of self-orientation and others-orientation that predict success in a foreign posting.
Q:
Discuss the differences between ethnocentric, polycentric, and geocentric approaches to staffing for international businesses. What is the rationale behind each of these approaches?
Q:
Describe human resource management.
Q:
International businesses differ markedly in their approaches to international labor relations. Which of the following current trends reflects international firms' attempts to rationalize their global operations?
A.Decentralized labor activities
B.Greater centralized control
C.Autonomy
D.Lateral relationships
E.National legislation
Q:
International businesses differ in terms of their approaches to international labor relations, mainly in the degree to which:
A.labor relations activities are centralized or decentralized.
B.labor relations are formal or informal.
C.labor relations are given a high priority or a low priority.
D.labor relations are internally or externally managed.
E.firms follow a polycentric or geocentric staffing policy.
Q:
Which of the following is an impediment to cooperation between national unions?
A.The retention of highly skilled tasks in the host country
B.The reciprocal tax treaty
C.The wide variation in the structure and ideology of unions
D.The common perception unions have about multinational companies
E.The decreasing bargaining power of multinational companies
Q:
International trade secretariats have been minimally successful because of the:
A.similarity in the structure of unions on a global level.
B.common perception unions have about multinational companies.
C.reciprocal tax treaty.
D.competition between national unions to attract investment from international businesses.
E.retention of highly skilled tasks in the host country.
Q:
In the 1960s, organized labor believed that by coordinating union action across countries through an international trade secretariat, it could counter the power of a multinational corporation by:
A.threatening to disrupt production on an international scale.
B.introducing a reciprocal tax treaty.
C.trying to farm out highly skilled tasks back to the home country of the firm.
D.increasing its bargaining power.
E.lobbying for importing employment practices from the home country of the firm.
Q:
The long-term goal for organized labor to establish international trade secretariats was to:
A.import employment practices and contractual agreements from the home country of the multinational firm.
B.retain low-skilled tasks in the host country.
C.prevent multinational firms from switching production from one location to another as economic conditions warrant.
D.introduce a reciprocal tax treaty.
E.be able to bargain transnationally with multinational firms.
Q:
Which of the following was established by organized labor in 1960s to provide worldwide links for national unions in particular industries?
A.HR watchdog groups
B.International trade secretariats
C.Unorganized labor organizations
D.International orientation resources
E.Reciprocal tax treaties
Q:
Organized labor responds to the increased bargaining power of multinational corporations by trying to:
A.impose regulations on multinationals through organizations such as GATT.
B.achieve international regulations on multinationals through the United Nations.
C.establish regional boards.
D.lobby multinational corporations to restrict their global reach to three or fewer foreign countries.
E.develop a local trade forum.
Q:
In the context of international labor relations, one of the reasons for a decline in union influence is the:
A.introduction of a reciprocal tax treaty.
B.retention of low-skilled tasks in an international firm's home country.
C.importing of employment practices and contractual agreements that are alien to the host country.
D.increased bargaining power of organized labor.
E.increased ability to threaten to disrupt production, either by a strike or some other form of work protest.
Q:
In the context of international labor relations, a labor union concern arises when an international business:
A.keeps low-skilled tasks in its home country.
B.signs a reciprocal tax treaty with the host country.
C.increases the bargaining power of organized labor.
D.faces difficulty in switching production from one location to another.
E.attempts to import employment practices and contractual agreements from its home country.
Q:
In the context of international labor relations, which of the following is a concern of organized labor?
A.An international business increases the bargaining power of organized labor.
B.An international business keeps highly skilled tasks in its home country and farms out only low-skilled tasks to foreign plants.
C.An international business faces difficulty in switching production from one location to another.
D.An international business does not import employment practices and contractual agreements from its home country.
E.An international business signs a reciprocal tax treaty with the host country.
Q:
A principal concern of domestic unions about multinational firms is that a company can counter its bargaining power with:
A.work schedules tied to global rather than domestic standards.
B.wage rates tied to global rather than domestic standards.
C.the power to import labor from abroad.
D.the power to move production to another country.
E.the retention of low-skilled tasks in home country.
Q:
In the context of international labor relations, which of the following is true of organized labor?
A.It supports the pursuit of a transnational standardization strategy.
B.It supports the pursuit of a global standardization strategy.
C.It increases unintentional bias in evaluating the performance of expatriate managers.
D.It limits a firm's ability to integrate and consolidate its global operations.
E.It reduces a firm's ability to understand host-country cultural differences that require different approaches to marketing.
Q:
From a strategic perspective, the key issue in international labor relations is:
A.dealing with multiple business units.
B.the degree to which organized labor can limit the choices of an international business.
C.whether to hire parent-country nationals, host-country nationals, or third-country nationals.
D.helping expatriates cope with new role demands.
E.the extent to which a reciprocal tax treaty can be brought into effect.
Q:
Which of the following functions of an international business is typically responsible for international labor relations?
A.Public relations
B.Human resource management
C.Finance and accounting
D.Legal
E.Logistics
Q:
In terms of expatriate pay, what does a firm typically do when a reciprocal tax treaty is not in force?
A.The firm requires the expatriate to pay one-third of the income tax to the host-country government.
B.The firm requires the expatriate to pay 50 percent of the income tax to the host-country government.
C.The firm pays the expatriate's income tax to the host-country government.
D.The firm requires the expatriate to pay the income tax to both the host-country and home-country governments.
E.The firm pays the expatriate's income tax to the home-country government.
Q:
In the absence of a reciprocal tax treaty, an expatriate:
A.may have to pay income tax to both the home- and host-country governments.
B.may not have to pay any tax.
C.may not have to pay income tax only to the host-country government.
D.may not have to pay income tax to the home-country government.
E.may have to pay 50 percent less tax to the host-country government.
Q:
Which of the following allowances is paid when an expatriate is being sent to a difficult location?
A.Education
B.Housing
C.Hardship
D.Cost of living
E.Reciprocal
Q:
In terms of expatriate pay, which of the following is true of a foreign service premium?
A.It ensures that expatriates' children receive adequate schooling.
B.It helps to evaluate expatriates' performance without any unintentional bias.
C.It ensures that expatriates are prepared for reentry into their home-country organization.
D.It is paid as a percentage of base salary, with 16 percent being the average premium.
E.It allows a firm to pay expatriates' income tax in the host country.
Q:
In terms of expatriate pay, which of the following is a characteristic of a foreign service premium?
A.It allows a firm to pay expatriates' income tax in the host country.
B.It ensures that expatriates' children receive adequate schooling.
C.It helps to evaluate expatriates' performance without any unintentional bias.
D.It ensures that expatriates are prepared for reentry into their home-country organization.
E.It compensates expatriates for having to live in an unfamiliar country.
Q:
Which of the following refers to the extra pay an expatriate receives for working outside his or her country of origin?
A.Parity adjustment
B.Special bonus
C.Foreign service premium
D.Expat allowance
E.Benefit
Q:
Which of the following staffing policies limits a firm's ability to reduce its use of expatriates?
A.Geocentric
B.Polycentric
C.Transnational
D.Regiocentric
E.Neocentric
Q:
In the context of expatriate compensation, what is the role of a balance sheet approach?
A.It equalizes purchasing power across countries so employees can enjoy the same living standard in their foreign posting that they enjoyed at home.
B.It helps expatriate managers and their families to adjust to the day-to-day life of the host country.
C.It rewards expatriates on the basis of merit and performance.
D.It helps expatriates to come to terms with the standard of living of the host country.
E.It is offered as an inducement to accept foreign postings and live away from family.
Q:
Which of the following is the most common approach to expatriate pay, which equalizes purchasing power across countries so employees can enjoy the same living standard in their foreign posting that they enjoyed at home?
A.Merit approach
B.Correspondence approach
C.Balance sheet approach
D.Parity approach
E.Perceptual approach
Q:
Which of the following staffing policies is pursued by a firm where considerable resentment is caused among foreign nationals who are members of the international cadre and work with U.S. nationals, if pay is not equalized?
A.Polycentric
B.Geocentric
C.Ethnocentric
D.Regiocentric
E.Localized
Q:
Which of the following staffing policies is concerned with the need for a cadre of international managers that may include many different nationalities?
A.Polycentric
B.Geocentric
C.Ethnocentric
D.Regiocentric
E.Localized
Q:
Which of the following staffing policies is pursued by firms where the lack of managers' mobility among national operations implies that the pay for expatriates should be kept country-specific?
A.Regiocentric
B.Ethnocentric
C.Geocentric
D.Polycentric
E.International
Q:
Which of the following staffing policies is followed by firms that can reduce the issue of compensation to that of how much home-country expatriates should be paid?
A.Polycentric
B.Ethnocentric
C.Geocentric
D.International
E.Global
Q:
According to the survey undertaken by Towers Watson, which of the following countries provides the highest pay to CEOs?
A.Switzerland
B.The United States
C.Japan
D.Australia
E.Argentina
Q:
Which of the following steps is true of bias in performance evaluations?
A.More weight should be given to an off-site manager's appraisal than an on-site manager's appraisal.
B.Cultural bias increases when the on-site manager is of the same nationality as the expatriate.
C.Home-office managers should write performance evaluations without consulting on-site managers to avoid bias.
D.Due to proximity, an on-site manager is more likely to evaluate the soft variables that are important aspects of an expatriate's performance.
E.A performance appraisal is invalid when the on-site manager is of the same nationality as the expatriate manager.
Q:
During performance appraisals, two groups evaluate the performance of expatriate managershost-nation managers and home-office managers. This is aimed at avoiding the problem of:
A.cultural conflict.
B.unintentional bias.
C.operational errors.
D.central tendency.
E.culture shock.
Q:
Which of the following strategies is pursued by international businesses that use management development for a strong unifying corporate culture and informal management networks to assist in coordination and control?
A.Localization
B.International
C.Transnational
D.Global standardization
E.Ethnocentric
Q:
Repatriation refers to:
A.sending expatriate managers to a new host country.
B.training expatriate managers to adjust to the new environment of the host country.
C.reentry of expatriate managers into their home-country organization.
D.helping expatriate managers build rapport with local employees.
E.increasing expatriate managers' effectiveness in dealing with host-country nationals.
Q:
In terms of training and management development, which of the following is aimed at helping the expatriate manager and family ease themselves into day-to-day life in the host country?
A.Cognitive training
B.Practical training
C.House training
D.Cultural training
E.Perceptual ability training
Q:
Which of the following is intended to build a manager's skills over his or her career with a firm?
A.Ethnocentrism
B.Cultural toughness
C.Total Quality Management
D.Management development
E.Learning effects
Q:
Which of the following is an additional and difficult dimension to the long-standing problem of expatriate failure due to the inability of the spouse to adjust?
A.Formal training
B.Dual-career families
C.Cultural diversity
D.Single parenting
E.Cultural toughness
Q:
Poor health care and housing standards and inhospitable climate make it difficult for expatriates to adjust to a particular posting. According to Mendenhall and Oddou's four dimensions that predict success in a foreign posting, which of the following is required in this situation?
A.Perceptual ability
B.Cultural toughness
C.Self-orientation
D.Others-orientation
E.Self-confidence
Q:
Amanda, an American manager, is successfully adjusting in a country where the culture is extremely male-dominated. According to Mendenhall and Oddou, which of the following dimensions that predict success in foreign postings is involved in this situation?
A.Perceptual ability
B.Others-orientation
C.Cultural toughness
D.Self-orientation
E.Empathy
Q:
According to Mendenhall and Oddou, which of the following dimensions refers to the relationship between the country of assignment and how well an expatriate adjusts to a particular posting?
A.Self-orientation
B.Perceptual ability
C.Cultural toughness
D.Others-orientation
E.Willingness to communicate
Q:
According to Mendenhall and Oddou, expatriate managers who tend to treat foreign nationals as if they were home-country nationals lack the dimension of:
A.cultural toughness.
B.self-orientation.
C.others-orientation.
D.perceptual ability.
E.willingness to communicate.
Q:
According to Mendenhall and Oddou, perceptual ability refers to:
A.an expatriate's willingness to use the host-country language.
B.an expatriate's ability to strengthen his or her self-esteem.
C.an expatriate's ability to empathize.
D.the relationship between the country of assignment and how well an expatriate adjusts to a particular posting.
E.the ability to develop long-lasting friendships with host-country nationals.
Q:
According to Mendenhall and Oddou, which of the following provides an expatriate the ability to understand why people of other countries behave the way they do?
A.Cultural toughness
B.Perceptual ability
C.Self-orientation
D.Others-orientation
E.Willingness to communicate
Q:
According to Mendenhall and Oddou's dimensions that predict success in a foreign posting, which of the following is a result of the attribute of others-orientation?
A.The expatriate has high self-esteem.
B.The expatriate empathizes with the host-country nationals.
C.The expatriate speaks to the host-country nationals in the local language.
D.The expatriate adjusts to the inhospitable climate of the host country.
E.The expatriate is comfortable working in a male-dominated environment.