Q&A Hero

Q: A foreign subsidiary is a local operation in which a foreign firm owns at least 51 percent.

Q: In global sourcing, firms purchase finished products from around the world for selling them in domestic markets.

Q: Importing is the process of buying goods from foreign companies and selling them overseas.

Q: In the global economy, resources, markets, and competition are worldwide in scope.

Q: Which of the following is a universal inhibitor of leadership success? a) Acting just b) Being dynamic c) Being communicative d) Acting autocratic

Q: Which of the following is a universal facilitator of leadership success? a) Acting uncooperative b) Being irritable c) Being informed d) Acting autocratic

Q: ______________ managers are those who are aware of international developments and competent in working across cultures. a) Senior b) National c) Global d) Foreign

Q: Products For You Inc. (PFY) is an international company with five presidents in charge of its American, European, African, Asian, and ROW (rest of the world) operations. PFY uses a global __________ structure to organize its international operations. a) area b) matrix c) product d) vertical

Q: The two main ways of organizing multinational corporations for global operations are global __________ structures and global __________ structures. a) economy; risk b) area; economy c) product; market d) area; product

Q: According to Transparency International, which of the following countries is perceived to be the least corrupt in the public sector? a) Somalia, Costa Rica, and Italy b) Spain, India, and Vietnam c) USA, Indonesia, and China d) Denmark, Finland, and New Zealand

Q: The forecasting of political events that may impact foreign investments is called __________. a) currency analysis b) political-risk analysis c) analytical forecasting d) international forecasting

Q: When Bolivia's president nationalized the oil and gas industry without consideration for the foreign companies operating there, the loss to the foreign countries was considered a __________ risk. a) national b) currency c) global d) political

Q: ABC Inc., a company based in the United States, operates a subsidiary in Egypt. ABC is dealing with a loss of investment and control over its assets in Egypt due to instability and political changes. Which of the following is ABC Inc. facing? a) Cultural integration issues b) Globalization c) Political risk d) Competitive threat

Q: Currency risk is __________. a) possible profit loss due to assets spread among multiple countries b) possible profit from new laws and economic policies c) possible profit loss due to fluctuations in foreign exchange rates d) possible profit from nationalization of foreign assets

Q: __________ is the full-time employment of children for work otherwise done by adults. a) Protectionism b) Child labor c) Global sourcing d) Greenfield venturing

Q: _____________ are firms that employ workers at very low wages, for long hours, and in poor working conditions. a) Subsidiaries b) Joint ventures c) Multinational corporations d) Sweatshops

Q: The Foreign Corrupt Practices Act prevents U.S. firms from: a) paying or offering bribes excess commissions in exchange for favors. b) using sweatshops to produce goods for sale in the U.S. c) employing child labor in plants that make goods for U.S. markets. d) participating in unsustainable development in third world countries.

Q: All of the following are MNC complaints about host countries EXCEPT: a) profit transfer limitations. b) overpriced local resources. c) below-cost prices. d) restrictive government rules.

Q: When large global firms gain disproportionately from the global economy versus smaller firms, it creates a __________. a) most favored nations status b) currency risk c) nontariff barrier d) globalization gap

Q: A __________ has extensive international business dealings in many foreign countries. a) conglomerate b) wholly owned subsidiary c) partnership d) multinational corporation

Q: The __________ links 14 southern African countries in trade and economic development efforts to improve prosperity and living standards for their citizens. a) African Union b) Southern African Customs Union c) Trade Union Council of South Africa d) Southern Africa Development Community

Q: The European Union has __________ members. a) 25 b) 28 c) 30 d) 35

Q: The __________ is both a regional economic and political alliance. a) European Union b) World Trade Organization c) Asia-Pacific Economic Cooperation d) Southern Africa Development Community

Q: The __________ creates a trade zone that frees the flows of goods and services, workers, and investments among the United States, Canada, and Mexico. a) Asia-Pacific Economic Cooperation b) North American Free Trade Agreement c) Central America Free Trade Agreement d) Southern United States Trade Association

Q: Which of the following is a nontariff barrier that discourages imports? a) Taxes b) Ad valorem duty c) Quotas d) Customs duty

Q: If Brazil applies for tariffs and favorable treatment for protecting local firms from foreign competition, it will be known as: a) idealism. b) internationalism. c) globalism. d) protectionism.

Q: When an American business gets being mistreated in a foreign country, the U.S. government can help by appealing to the __________. a) European Union b) World Trade Organization c) World Bank d) United Nations

Q: If Japan receives the most favorable treatment for imports and exports with other countries, Japan will be said to have a(n) ___________ status. a) international b) outsourced c) greenfield venture d) most favored nation

Q: The __________ is a global institution established to promote free trade and open markets around the world. a) International Monetary Fund b) World Bank c) World Trade Organization d) U.S. Chamber of Commerce

Q: A __________ is a local operation completely owned by a foreign firm. a) foreign partnership b) franchise c) foreign subsidiary d) licensee

Q: International joint ventures are types of __________ in which foreign and domestic partners cooperate for mutual gains. a) foreign subsidiaries b) global strategic alliances c) greenfield ventures d) global sourcing

Q: A __________ establishes a foreign subsidiary by building an entirely new operation in a foreign country. a) joint venture b) strategic alliance c) greenfield venture d) franchise

Q: A joint venture arrangement usually involves all of the following EXCEPT: a) pooling resources. b) sharing risks. c) jointly operating the venture. d) one firm buying out the other firm.

Q: ABC Co. wants to market their products in Brazil. Armed with the design and manufacturing capability, ABC looks for a company with the distribution channels and knowledge of the Brazilian culture necessary to market their products. After conducting research, ABC decides to form a partnership with XYZ Inc. in Brazil. The company will be jointly owned and operated. In this scenario, ABC Co. forms a(n) __________ with XYZ Inc. a) franchise b) joint venture c) licensing agreement d) operating subsidiary

Q: Which of the following operates through co-ownership with local partners? a) Franchise b) Wholly owned subsidiary c) Joint venture d) Licensed venture

Q: The payment of a fee to use another firm's name and operating methods is called __________. a) licensing b) franchising c) importing d) leasing

Q: When a firm grants franchising rights to a foreign firm, it is giving the foreign firm access to its: a) unique manufacturing technology. b) special patent. c) trademark. d) management systems.

Q: One of the business risks of licensing is: a) corruption. b) franchising. c) counterfeiting. d) terrorism.

Q: When a firm grants licenses internationally, it is giving foreign companies access to its: a) technologies, patents, or trademarks. b) facility designs and equipment. c) product ingredients. d) management systems.

Q: Global sourcing primarily involves: a) exporting products for sale. b) purchasing materials, manufacturing, or services from around the world for local use. c) selling a foreign firm the right to make your products. d) building a plant to produce goods for sale in foreign countries.

Q: Anna has purchased the rights to make and sell another company's products. Which of the following market entry approaches to international business has Anna used? a) Exporting b) Importing c) Franchising d) Licensing

Q: Which of the following is a direct investment strategy? a) Global sourcing b) Joint ventures c) Exporting d) Licensing

Q: Businesses go global for all of the following reasons EXCEPT: a) to minimize domestic customers. b) to increase profits through expanded operations. c) to increase access to low-cost, talented workers. d) to increase access to products, services, and materials.

Q: ABC Manufacturing, a company based in the United States, buys products from China and sells them in U.S. markets. This practice refers to __________. a) importing b) insourcing c) exporting d) franchising

Q: Which of the following terms is used to describe the selling of locally made products in foreign markets? a) Importing b) Greenfield venturing c) Outsourcing d) Exporting

Q: __________ moves foreign production and jobs back to domestic locations. a) Outsourcing b) Insourcing c) Reshoring d) Offshoring

Q: A __________ is a network of a firm's outsourcing suppliers and contractors. a) franchise b) global supply chain c) joint venture d) partnership

Q: __________ takes advantage of international wage gaps by contracting for low-cost goods and services in foreign locations. a) Insourcing b) Exporting c) Global sourcing d) Reshoring

Q: The reasons why businesses go global include all of the following EXCEPT: a) expanding profit potential. b) gaining access to more customers. c) reducing access to capital. d) lowering the cost of materials and supplies.

Q: ABC Manufacturers conducts commercial transactions across national boundaries. ABC Manufacturers would be classified as a(n) __________. a) large business b) franchise c) international business d) foreign licensed company

Q: A company that conducts business across national boundaries is called a(n) __________. a) global industry b) international business c) trade association d) conglomerate

Q: A(n) __________ economy is one in which resources, markets, and competition are worldwide in scope. a) foreign b) domestic c) outsourced d) global

Q: The creation of domestic jobs by foreign employers is called __________. a) insourcing b) outsourcing c) international operation d) strategic alliance

Q: __________ is the process of growing interdependence among elements of the global economy. a) Nationalization b) Industrialism c) Globalization d) Internationalism

Q: Do you believe that the Foreign Corrupt Practices Act puts U.S. firms conducting business internationally at a competitive disadvantage? Give reasons.

Q: Define and differentiate between multinational and transnational corporations.

Q: Differentiate between a joint venture and a foreign subsidiary.

Q: Distinguish between franchising and licensing.

Q: What are the pros and cons of conducting business internationally?

Q: __________ forecasts how political events may have an impact on foreign investments.

Q: ______________ is the possible loss of profits because of fluctuations in foreign exchange rates.

Q: The term __________ is used to describe places in which employees are given low wages for working long hours in poor, and often unsafe, working conditions.

Q: __________ is a call for tariffs and favorable treatments to protect domestic firms from foreign competition.

Q: MNC is an acronym that stands for __________.

Q: The acronym WTO stands for a global institution called the __________.

Q: A local operation that is completely owned and controlled by a foreign company is called a(n) __________.

Q: A(n) __________ operates in a foreign country through co-ownership with local partners.

Q: The form of international business involving the sale of locally made goods in foreign markets is called _____________.

Q: The process of growing interdependence among elements of the global economy is known as _____________.

Q: Shifting local jobs to foreign locations to take advantage of lower-wage labor in other countries is called _____________.

Q: Being a loner, acting uncooperative, and being irritable are considered universal inhibitors of leadership success.

Q: Most multinational corporations retain strong national identities even while operating around the world.

Q: The World Trade Organization has 90 members.

Q: A foreign subsidiary can be created either by buying out an existing firm or by building a new firm from scratch.

Q: Franchising involves selling the right to use your name and operating methods to foreign companies.

Q: What is culture shock? What are the five stages experienced by an individual facing culture shock?

Q: Hofstede identified five value differences among national cultures. What are they? Define each of them.

Q: Edward T. Hall, an anthropologist, believes that cultures have "silent" languages that are found in their approach to communications in terms of context, time, and space. What are these cultural languages? Describe each.

Q: While the value of diversity is obvious, what makes it so difficult to manage diversity in global companies?

Q: Beyond the legal issues, make a business case for diversity.