Which of the following is NOT a common criticism of the IMF?
Provides excessively lenient repayment terms to poor countries
Inappropriate policies
Moral hazard
Lack of accountability
Question 5
Empirical research has demonstrated that corruption tends to _______economic growth, foreign direct investment, and international trade.
increase
reduce
precede
preclude
Question 6
Why would a manufacturing firm prefer to execute a green-field investment instead of acquiring an existing asset in a foreign country?
Because green-field investments are typically less costly to execute
Because green-field investments are typically less risky
Because green-field investments are less likely to be targeted by host governments and/or protesters
Because the acquiring firm may want to have full control of facility design and layout
Question 7
Firms that compete in the global marketplace typically face two types of competitive pressures. They face pressures for cost reductions and:
pressures for volume increases
pressures to be locally responsive
pressures to be politically savvy
pressures for price reductions
Question 8
_____ refers to identifying distinct groups of consumers whose purchasing behavior differs from others in important ways.
Market penetration
Market development
Market segmentation
Product development
Question 9
The _____ refer(s) to systematic reductions in production costs that have been observed to occur over the life of a product.
experience curve
learning effects
location economies
efficiency slope
Question 10
According to the article "Strategies that Fit Emerging Markets," McDonald's experience in Russia suggests that:
Institutional voids can be overcome
Some countries, particularly those with collectivist orientations, are just not open to Western fast-food restaurants
Business models developed for advanced, Western markets rarely succeed in the developing world
Even the most successful multinational firms can lose their way when they forsake the four elements of Porter's diamond
Question 11
A (an) _________ may be defined as a situation in which none of the available alternatives seems morally acceptable.
existential conflict
tragedy of the commons
cognitive conundrum
ethical dilemma
Question 12
In terms of the influence of cultural differences on product attributes, which of the following is evidence of the trends that Theodore Levitt described?
Differences in traditional eating habits
Cultural differences due to historical and idiosyncratic reasons
Market segments that remained confined to national borders
Tastes and preferences becoming cosmopolitan
Question 13
Which of the following strategies is most likely to pursued by a firm when there are strong pressures for cost reductions and demands for local responsiveness are minimal?
Domestic strategy
Global standardization strategy
International strategy
Transnational strategy
Question 14
In return for licensing one of its products to a foreign firm, the licensor:
gets preferential trade treatment from the country of the licensee
gets a special subsidy from the country of the licensee
collects a royalty fee on every unit the licensee sells
gets a suitcase full of unmarked bills tossed from a bridge
Question 15
In the context of value chain analysis, which of the following is an example of a "primary" activity?
Materials management
Research and development
Manufacturing
Human relations
Question 16
A country's __________ of FDI refers to the total accumulated value of foreign-owned assets at a given time.
portfolio
inventory
flow
Stock
Question 17
The task of the International Monetary Fund, as established by the Bretton Woods agreement, is to:
promote general economic development
maintain order in the international monetary system
provide letters of credit on behalf of first-time exporters
facilitate the establishment of regional trade agreements
Question 18
______ is (are) payment/s made to ensure that a foreign company receives standard treatment that might otherwise be obstructed by a host country government official.
facilitating payments
hush money
blackmail
arbitrage
Question 19
Labor productivity increases over time as individuals understand the most efficient ways to perform particular tasks. This is as a result of _____.
diminishing returns
location economies
economies of time
learning effects
Question 20
Which of the following is true according to Theodore Levitt's article in the Harvard Business Review about the globalization of world markets?
Multinational corporations consider the world to consist of distinct and unique entities.
Multinational corporations operate at low relative costs.
Multinational corporations operate from a single country.
Multinational corporations do not adjust their products and practices to suit each country.
Question 21
According to the article "How Wal-Mart is Changing China," which of the following is NOT a reason why Wal-Mart established the Direct Farm Program in China?
To drive down costs by eliminating unproductive pieces of the supply chain
To be able to get produce to customers in cities faster, thereby reducing spoilage
To be better able to control the standards of the food it advertises as green and organic
To comply with Beijing's demand that they purchase food directly from rural communes
Question 22
In the 1930s, confidence in the _____________ shattered because countries were devaluing their currencies at will.
fixed exchange system
international currency board
gold standard
International Monetary Fund
Question 23
A Jamaican brewery is working on its methods of advertising, promoting, and selling its product. This is an example of _____.
primary activities in the value chain
support activities in the value chain
procurement activities in the value chain
service activities in the value chain
Question 24
How did the U.S. Justice Department learn about Chiquita's payments to illegal groups in Colombia?
A private company cable was discovered by U.S. investigators
Colombian politicians filed a complaint
A competitor spilled the beans
The company came forward and admitted it
Question 25
Which of the following did Chiquita CEO Fernando Aquirre NOT do in dealing with his company's crisis in Colombia?
turn itself into the U.S. Justice Department
cease making illegal payments
sell off its Colombia banana unit
pay reparations to the family members murdered by guerrillas and paramilitaries
Question 26
In international business, the benefits frequently associated with entering a foreign market early are known as _____.
pioneering costs
first-mover advantages
absolute advantages
bandwagon effects
Question 27
Chinese towel-maker Loftex is cited in the article "How Wal-Mart is Changing China," as a success story. How come?
Because it has achieved ambitious energy-reduction goals set by Wal-Mart
Because it has developed new synthetic micro-fibers that are cheaper than cotton
Because it has found a way to lower production costs while simultaneously improving working conditions within its factories
Because it has found a way to lower production costs while raising worker salaries by 25 percent
Question 28
The number of intermediaries between the product (or manufacturer) and the consumer is referred to as _____.
channel length
channel quality
channel exclusivity
channel fragmentation
Question 29
_____ explicitly rejects the idea that businesses should undertake social expenditures beyond those mandated by the law and required for the efficient running of a business.
The Friedman doctrine
The Sullivan principle
Utilitarianism
Kantian ethics
Question 30
Whereas in developing countries most FDI takes the form of _______, in developed countries most FDI take the form of _______.
greenfield investments; acquisitions
acquisitions; greenfield investments
joint ventures; licensing deals
licensing deals; turnkey operations
Question 31
In terms of an international firm considering foreign expansion, _____ include the costs of promoting and establishing a product offering, and educating customers.
Sunk costs
Pioneering costs
Opportunity costs
Intangible costs
Question 32
In the film "The Curse of Inca Gold," Newmont executive Larry Kurlander is caught on tape telling Peruvian intelligence chief Vladamiro Montesinos that he wants a ______.
$1 million kickback deposited into his Swiss bank account
friend for life
guarantee that the government will suppress protests at the Yanacocha mine
guarantee that the government will award Newmont and its partners a $1 billion mining concession
Question 33
Which of the following is an element of a firm's marketing mix?
Product attributes
Employee management
Customer service
Population demographics
Question 34
According to the article "How Wal-Mart is Changing China," October 24, 2005 was a critical date in the company's recent history. How come?
Because the CEO gave an important speech committing the company to going green
Because the company opened its 100th store in China, becoming the country's largest foreign retailer
Because Wal-Mart was selected by China's government as a top-tier corporate sponsor for the 2008 Beijing Summer Olympics, bestowing upon it copious amounts of guanxi and good karma
Because the CEO gave an important speech committing the company to enhancing worker rights in its supplier factories
Question 35
A _____ means the value of the currency is fixed relative to a reference currency, and then the exchange rate between that currency and other currencies is determined by the reference currency exchange rate.
flexible exchange rate
pegged exchange rate
real exchange rate
dirty float exchange rate
Question 36
Managers pursuing a ____ seek to make their product or service different from those of competitors on dimensions valued by customers.
global strategy
differntiation strategy
cost leadership strategy
multipoint competition strategy
Question 37
A strategy that focuses primarily on increasing the attractiveness of a product is referred to as a _____ strategy.
standardization
differentiation
target-identification
low-cost
Question 38
Kapstein argues in "Avoiding Unrest in a Volatile Environment," that savvy multinational companies should to seek to win the favor of foreign governments and their citizens by embedding themselves deeply in the communities in which they operate. In other words, they ought to follow a (an) ______ strategy.
engagement
multi-domestic
enclave
transnational
Question 39
In a _____, a mode of entry into foreign markets, a firm agrees to set up an operating plant for a foreign client and hand over the plant when it is fully operational.
franchising agreement
turnkey project
licensing agreement
wholly owned subsidiary
Question 40
Which of the following modes of entry into foreign markets have the advantage of being characterized by low development costs and risks?
Exporting
Licensing
A greenfield investment
A wholly owned subsidiary
Question 41
In the 1960s, RCA licensed its leading-edge color television technology to a number of Japanese companies, which later took over the market. This demonstrates:
The Japanese are not to be trusted
There are certain capabilities that are often not amenable to licensing
Licensing may result in a firm's giving away valuable technological know-how to a potential foreign competitor
Licensing does not give a firm the tight control over manufacturing, marketing, and strategy in a foreign country that may be required to maximize its profitability
Question 42
The _____ of a firm is measured by the difference between the value of a product to an average consumer and the average unit cost of producing that product.
customer surplus
value creation
cost curve
value efficiency
Question 43
If Boeing won an order to sell 50 of its new 787 airplanes to China, but the Chinese government stipulated that 40 percent of the component parts be produced in China, that stipulation would be an example of a (an):
ad valorem quota
anti-dumping duty
administrative policy
local content requirement
Question 44
Which of the following is an advantage of wholly owned subsidiaries as a mode of entry into foreign markets?
A foreign firm is relieved of many of the costs and risks associated with opening a foreign market on its own.
The risk of losing control over a firm's technological competence is reduced.
A foreign firm is insulated completely from the threat posed by high transport costs.
It is the most politically acceptable mode of entry into foreign markets.
Question 45
According to Michael Porter, primary value chain activities involve _____.
planning, finance, accounting, legal activities, and government relations
acquiring, training, evaluating, compensating, and developing human resources
expertise and the tools or equipment related to the exercise of that expertise
creating a product or service and distributing it to customers
Question 46
Which of the following is true of the marketing and research and development (R&D) departments in an international firm?
Marketing and R&D should always work independently.
R&D identifies gaps in a market so that marketing can work to fill those gaps.
R&D defines the market's needs for the marketing personnel.
A major contributor to the success of new-product introductions is a close relationship between marketing and R&D.
Question 47
_____ implicitly rejects the idea that universal notions of morality transcend different cultures.
Just distribution
Cultural relativism
The Kantian ethic
Utilitarianism
Question 48
Franchising, a mode of entry into foreign markets, is employed primarily by _____ firms.
service
manufacturing
online
high-technology
Question 49
According to our textbook, firms often view _____ and licensing as alternatives to FDI:
importing
exporting
franchising
dumping
Question 50
A righteous moralist is most likely to claim that:
a multinational s home-country standards of ethics are the appropriate ones for companies to follow in foreign countries.
a firm should adopt the ethics of the culture in which it is operating.
people should be treated as ends and never purely as means to the ends of others.
human beings have fundamental rights and privileges that transcend national boundaries and cultures.
Question 51
BMW announces plans to build a state-of-the-art automobile assembly factory in Jacksonville, Florida. Shortly thereafter, Delphi automotive, a parts supplier, opens a warehouse down the street and hires 200 people to staff the facility. With respect to BMW s initial investment, the new Delphi jobs are considered:
Direct employment
Indirect employment
Supplemental employment
None of the above
Question 52
A _____ allows two or more firms to share the fixed costs (and associated risks) of developing new products or processes.
franchising agreement
global web
free trade agreement
strategic alliance
Question 53
The turning point for Newmont Mining in Peru took place when ______.
The company refused to pay a bribe to intelligence chief Vladamiro Montesinos
The minister of energy and mines revoked the company's license to operate
An accidental mercury spill sent dozens of local villagers to the hospital
The Fujimori government expropriated its assets
Question 54
Other things being equal, FDI is ________ and ________ compared to exporting or licensing.
expensive, risky
expensive, risk averse
inexpensive, risky
inexpensive, risk averse
Question 55
_____ are the economies that arise from performing a value creation activity in the optimal place for that activity, wherever in the world that might be.
Diversification economies
value-building economies
Location economies
Support economies
Question 56
Which of the following is an advantage of exporting as a mode of entry into foreign markets?
A firm can avoid the cost of establishing manufacturing operations in the host country.
A firm does not have to bear the development costs and risks associated with opening a foreign market.
A firm can earn returns from process technology skills in countries where FDI is restricted.
A firm has access to local partner s knowledge.
Question 57
Which of the following is true of a localization strategy?
It allows a firm to capture the cost reductions of mass-producing a standardized product.
It reduces duplication of functions.
It involves longer production runs.
It makes sense if the value added by customization supports higher pricing.
Question 58
The Sullivan principles attempted to fight against _____.
globalization
apartheid laws
legalization of facilitating payments
democratic structures
Question 59
According to the article "How Wal-Mart is Changing China," the country's burgeoning middle class has embraced Western branded fast-food and grocery chains primarily because:
They have new purchasing power and like the novelty of Western brands
They are captivated by Western advertising campaigns featuring characters like Colonel Sanders and Ronald McDonald
They are seen as more trustworthy food purveyors than their local counterparts
Their prices are on average 25 percent cheaper than at their Chinese counterparts
Question 60
A _____ refers to a system under which some currencies are allowed to float freely, but the majority are either managed by government intervention or pegged to another currency.
managed-float system
pegged exchange rate system
fixed exchange rate system
floating exchange rate system
Question 61
_____ arises when people behave recklessly because they know they will be saved if things go wrong.
Systemic risk
Moral hazard
Ethical dilemma
Tragedy of the commons
Question 62
The pragmatic nationalist view sees FDI as having:
both benefits and costs
benefits and essentially no costs
costs and essentially no benefits
neither benefits nor costs
Question 63
According to the video on Chiquita in Colombia, the U.S. banana company admitted to paying protection money to:
left-wing guerrillas
right-wing paramilitaries
drug lords
corrupt government officials