MC Study Ver 1

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Trinity Western University *

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6031

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Economics

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Jan 9, 2024

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53

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1 What kind of enterprise is a business that has productive activities in two or more countries? multinational The last quarter of the 20th century experienced __________ in the global economy. rapid changes Suppose Petro Canada, an international oil company, had a complaint about a trade issue. The __________, a governing body established at the Uruguay Round in 1993 to police the international trading system, is an organization that Petro Canada could take its complaint to. World Trade Organization The Web is viewed as a global what? equalizer The agency established at the 1993 Uruguay Round to police the international trading system is the __________. World Trade Organization Firm X exports a number of products to users in other countries. This practice is referred to as __________. international trade Although this organization is perhaps best known for its peacekeeping role, one of its central mandates is the promotion of higher standards of living, full employment, and conditions of economic and social progress and development. What is it called? United Nations As markets globalize and an increasing proportion of business activity transcends national borders, there is a need for institutions to help manage, regulate and police the global market place. True General Electric Corporation has productive activities in a number of countries. As a result, it would be appropriate to refer to General Electric as a __________ corporation. multinational XYZ, Inc. is an auto parts distributing warehouse that exports many of its products to consumers in other countries. XYZ Inc. can be described as engaging in: international trade. Although Inco is a Canadian company, it has invested substantial business resources in activities outside Canada. This practice is referred to as: foreign direct investment Under the umbrella of GATT there have been eight rounds of negotiations among member states. The _______ was the most recent round of negotiations. Uruguay Round If what is occurring in China continues for two more decades, China may move from third-world to industrial superpower status even more rapidly than Japan did. True _______ is the theory that predicts that the number of transistors on a computer chip doubles every 24 months. Moore's Law Since the 1960s, there have been two notable trends in the demographics of the multinational enterprise. These two trends have been: the rise of non-U.S. multinationals and the growth of mini-multinationals What is the primary purpose of the World Trade Organization? arbitrate of trade disputes The acronym WTO stands for: World Trade Organization The factors of production include: labour The relative decline of the developed countries' share of world output _________________.
2 reflects the growing economic and industrial strength of developing countries. The trend toward a more integrated and interdependent global economic system that has been in place for many years is commonly referred to as: globalization _______ are the two macro factors that seem to underlie the trend toward greater globalization. The decline in barriers to the free flow of goods, services, and capital that has occurred since the end of World War II, and technological change Some Canadian firms have outsourced jobs to developing countries. True After World War II, the West committed to removing trade barriers between nations because of what experience? retaliatory trade policies leading to the Depression Many of the changes that countries have made pertaining to foreign direct investment regulations have: made it easier for foreign companies to enter their markets Which of the following is a major cause for lowering the trade barriers of markets and production? Technological change Who is responsible for policing the world trading system? The World Trade Organization Managing an international business is different from managing a purely domestic business for all of the following reasons except: the range of problems confronted by a manager in an international business are narrower than those confronted by a manager in a domestic business According to your textbook, between 1930 and 1990, the cost of a three-minute phone call between New York and London fell from $244.65 to $3.32. This decrease can be mainly contributed to the advent of the microprocessor. In addition to reducing trade barriers, many countries have also been progressively removing restrictions on barriers to foreign direct investment. True Since 1992, most of the world's changes to FDI have done what? created a more favourable environment for FDI The International Monetary Fund (IMF) is often seen as the leader of last resort to nation states whose economies are in economic turmoil. True The International Monetary Fund and the World Bank were both created in 1944 by 44 nations that met at Bretton Woods, New Hampshire. True A concern by some is that free trade encourages the movement of manufacturing from developed countries to less developed countries. True Critics use the following argument to suggest that globalization is a contributing factor to an increase in pollution. firms that operate in countries that have adequate pollution regulations have a tendency to move their manufacturing operations to countries that have less stringent or no pollution controls to avoid the cost of regulation Throughout the 1990s, the amount of investment directed at both developed and developing nations did what? increased What country's share of world output went from almost nothing in 1960 to 10.8% in 2012? China The __________ is a treaty designed to remove barriers to the free flow of goods, services, and capital between nations. General Agreement on Tariffs and Trade
3 Outsourcing has even extended to the Canadian _______ industry. services Free trade agreements can be tied to tougher environmental and labour laws. True The _______ was created in 1944 by 44 nations that met in Bretton Woods, New Hampshire. International Monetary Fund Recently there has been _______ in the number of smaller firms that are multinationals. a significant growth _______ is not a benefit of globalization. Slowing economic growth If we look into the future, most forecasts now predict a __________ in world output accounted for by developing nations such as China, India, Indonesia, and South Korea, and a __________ in the share enjoyed by rich industrialized countries such as Britain, Japan, and the United States. rapid rise; rapid decline Which of the following is an example of a developing nation? Thailand Among developing nations, the largest recipient of foreign direct investment has been which country? China The globalization of __________ refers to the sourcing of goods and services from locations around the globe to take advantage of national differences in the cost and quality of factors of production (such as labour, energy, land, and capital). production Economists argue that increased international trade and cross-border investments will result in __________ prices for goods and services. lower The investing of resources in business activities outside a firm's home country is referred to as: foreign direct investment Supranational organizations such as the WTO are criticized for focusing on economics and not on democracy and environmental responsibility. Although most international trade and investment is still conducted by large firms, small to medium sized firms are increasingly involved in international trade and investment. True In the past decades, many countries, in addition to reducing trade barriers, have done what? removed restrictions to FDI According to our textbook, the growing integration of the world economy is: increasing the intensity of competition within the home market of a company in a wide range of manufacturing and service industries What was created at the same time as the International Monetary Fund? World Bank Many of tomorrow's economic opportunities may be found in the developing nations of the world. True It is commonly believed that globalization stimulates economic growth, creates jobs, and raises income levels. True Over the past fifty years, who dominated the world trade picture? The United States
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4 The volume of goods, services and investment crossing national borders expanded faster than did world output every year during the last two decades of the 20th century. True The _______ is seen as the lender of last resort to nation-states whose economies are in turmoil and currencies are losing value against those of other nations. International Monetary Fund Most forecasts now predict a rapid rise in world output accounted for by developing nations such as China, India, and South Korea, and a rapid decline in the share enjoyed by rich industrialized countries such as Canada, Britain and the United States. True As a result of a variety of innovations, the real costs of information processing and communication have __________ over the past two decades. fallen dramatically According the lecture, the number of Internet users in Canada has surpassed? 90% Sourcing goods and services from locations around the globe is known as __________. globalization of production Which of the following refers to the exporting of goods or services to consumers in another country? international trade Many critics of globalization argue that outsourcing leads to increased use of _________ labour practices in developing countries. exploitive One frequently voiced concern about globalization is that it destroys manufacturing jobs in wealthy advanced economies such as Canada. The basic thrust of the critics' argument is: falling trade barriers allows firms to move their manufacturing activities offshore to countries where wage rates are much lower The Human Development Index is scaled from 0 to 1. Countries scoring less than _______ are classified as low human development (the quality of life is poor). 50 A composer is able to protect an original musical score from being copied and sold by someone else through __________ protection. copyright _______________ allows for a more direct comparison of living standards in different countries. PPP In a representative democracy, if elected representatives fail to perform their job adequately, what will happen? they will be voted out of office in the next election A purchasing power parity adjustment allows for a more direct comparison of living standards in different countries. True  In 2001, the World Bank has chosen to replace GNP with ________. GNI Many social democratic governments nationalize private companies. True  Quebec is the only province in Canada to use the _____________ law system. civil Generally speaking, international laws about intellectual property rights are _______. Being strengthened The violation of _______________ can be violated in two ways—through private action and through public action. property rights
5 Suppose you invent a new product and want to obtain the exclusive rights to manufacture the product. To protect yourself, you should apply for a __________ on the product. patent In a pure __________ economy the good and services that a country products, and the quantity in which they are produced, is not planned by anyone. Rather it is determined by the interaction of supply and demand and signaled to producers through the price system. market The two dimensions of political systems are interrelated; systems that emphasize _______ tend towards totalitarianism, while systems that place a high value on _______ tend to be democratic. collectivism; individualism Which of the following describes the concept of intellectual property? Property, such as computer software, screenplays, musical scores, or chemical formulas for new drugs, that is the product of intellectual activity. Amartya Sen believed that development should be assessed less by measures such as _______________. GNP What country is the last major Communist power left? China Which of the following is the political system in which government is by the people, exercised either directly or through elected representatives? democracy _______ is a form of totalitarianism that advocates achieving socialism through totalitarian dictatorship. Communist totalitarianism Without a ____ the incentive to engage in economic activity can be reduced substantially by private and public entities. Legal system A form of government in which one person or political party exercises absolute control over all spheres of human life, and opposing political parties are prohibited is referred to as totalitarianism. True  Political systems can be assessed according to two related dimensions: the degree to which they emphasize collectivism opposed to individualism and the degree to which they are democratic or totalitarian __________ liability involves holding a firm and its officers responsible when a product causes injury, death, or damage. Product A _______ is an economic system in which the goods and services produced, the quantity in which they are produced, and the prices at which they are sold are all planned by the government. command economy In a pure command economy, the goods and services that a country produces, the quantity in which they are produced, and the prices at which they are sold are all planned by the government. True  Which of the following definitions best describes the concept of individualism? Political philosophy that an individual should have freedom over his or her economic and political pursuits. Amartya Sen believed that development should be assessed more by measures such as _______________. HDI A political system in which citizens periodically elect individuals to represent them is referred to as a __________. representative democracy In a __________ economy, certain sectors of the economy are left to private ownership and free market mechanisms, while in other sectors there is significant state ownership and government planning. mixed
6 The political, economic, and legal systems of a country are called the political economy. True  _______ is consistent with the notion that an individual's right to do something may be restricted because it runs counter to "the good of society" or "the common good." Collectivism There is fairly wide agreement that __________ and __________ are the engines of long-run economic growth. innovation; entrepreneurship __________ refers to a system that stresses the primacy of collective goals over individual goals. Collectivism The economy and legal systems of a country are shaped by its what? political system Individualism is built on two central themes: an emphasis on the importance of guaranteeing individual freedom and self- expression and the belief that the welfare of society is best served by letting people pursue their own economic self-interest There are four major forms of totalitarianism in the world today. These are: communist, theocratic, tribal, and right-wing The Canadian legislation that makes bribery of a foreign official by a Canadian business person a criminal offense, is known as what? Bill S-21 A system that stresses the primacy of collective goals over individual goals is called collectivism. True  In contrast to collectivism, __________ stresses that the interests of the individual should take precedence over the interests of the state. individualism What kind of economies were once very common throughout much of the world, although they are becoming less so? mixed In a market economy the goods and services that a country produces, and the quantity in which they are produced, is not planned by anyone. Rather, it is determined by the interaction of supply and demand and signalled to producers through the price system. True  Right-wing __________ generally permits individual economic freedom, but restricts individual political freedom on the grounds that it would lead to a rise of communism. totalitarianism The bundle of legal rights over the use to which a resource is put; and over the use made of any income that may be derived form that resource are called __________ rights. property There must be no restrictions on supply for a pure market economy to work. True  The _______________ system evolved in England over hundreds of years and is based on tradition, precedent, and custom. common law A _______________ law system is based on a very detailed set of laws organized into codes. civil __________ are designs and names, often officially registered, by which merchants or manufacturers designate and differentiate their products. Trademarks The __________ of a country refers to the rules that regulate behaviour, along with the processes by which the laws of a country are enforced and through which redress for grievances is obtained. legal system
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7 It has been argued that the economic freedom associated with a __________ economy creates greater incentives for innovation than either a planned or mixed economy. market __________ is a form of government in which one person or political party exercises absolute control over all spheres of human life, and opposing political parties are prohibited. Totalitarianism A law system that is based primarily on religious teachings, refers to a theocratic law system. Individualism is opposite to collectivism. In a political sense, individualism refers to a philosophy that an individual should have freedom in his or her economic and political pursuits. True  __________ are the exclusive legal rights of authors, composers, playwrights, artists, and publishers to publish and dispose of their work as they see fit. Copyrights Followers of socialist ideology who commit themselves to achieving socialism through democratic reforms are called: Social democrats All of the following are types of economic systems except: progressive economy What does the acronym GNP stand for? gross national product A patent grants the investor of a new product or process exclusive rights to the manufacture, use, or sale of that invention. True Phillip is in the process of writing up a document that states his company will provide consulting on network applications for the next two weeks, for a specified amount of money. Phillip is in the process of creating what? a contract Which of the following can be traced to an ancient Greek philosopher, Aristotle? individualism Canada could be described as having elements of both a __________ economy and a ___________ economy. market; mixed All of the following are forms of totalitarianism except: ancestral Collectively, we refer to political, economic, and legal systems as constituting the _______ economy of a country. political When __________ is practiced, the needs of society as a whole are generally viewed as being more important than individual freedoms. collectivism The four major forms of totalitarianism are: communist totalitarianism, theocratic totalitarianism, tribal totalitarianism, and right-wing totalitarianism. True  In a pure __________ economy all businesses are state owned so the government can direct them to make investments that are in the best interests of the nation as a whole, rather than in the interest of private individuals. command To guarantee that elected representatives can be held accountable for their actions by the electorate, an ideal representative democracy has a number of safeguards. Which of the following is not an example of a safeguard in an ideal representative democracy? a political police force and armed services
8 Which of the following are the three broad types of economic systems? market economy, command economy, mixed economy What is the process through which people create new products, new processes, new organization, new management practices, and new strategies called? innovation There is a strong relationship between economic freedom and economic growth. True  The U.S. law enacted in 1977 that prohibits U.S. companies from making "corrupt" payments to foreign officials for the purpose of obtaining or retaining business is the Foreign Corrupt Practices Act. True  The parties to an agreement normally resort to _______________ when one party feels the other has violated either the letter of the spirit of the agreement. contract law In a pure command economy, the goods and services that a country produces, the quantity in which they are produced, and the prices at which they are sold are all planned by: the government The United Nations __________ index is based on life expectancy, literacy rates, and whether average incomes are sufficient to meet the basic needs of life in a country. Human Development Suppose Apple corporation develops a new type of phone. Apple can protect its invention through what kind of protection? patent Property rights refer to the bundle of legal rights over the use to which a resource is put and over the use made of any income that may be derived from that resource. True  PPP is an acronym that stands for: purchasing power parity _______________ set certain safety standards to which a product must adhere. Product safety laws GNP is increasingly being replaced by ______. GNI An implication of the growth of market-based economies is the opening up of many new global markets. True  Patents, copyrights, and trademarks are examples of __________ property laws. intellectual An example of an institutional weakness that undermines contract enforcement is what? Court capacity Both import quotas and VERs benefit ___________ by limiting import competition, but they result in higher prices, which hurts __________. domestic producers; consumers Bureaucratic rules that are designed to make it difficult for imports to enter a country are referred to as administrative trade policies. Ad valorem tariffs are levied as a proportion of the value of the imported good. True The WTO's policing and enforcement mechanisms are having __________ on world trade, according to the textbook. a positive effect
9 The ______________ was a multilateral agreement whose objective was to liberalize trade by eliminating tariffs, subsidies, import quotas, and the like. General Agreement on Trade and Tariffs An administrative policy is an informal instrument or bureaucratic rule that can be used to restrict imports and boost exports. Such policies benefit __________ but hurt __________. producers; consumers A __________ is a tax levied on imports. tariff Lowering production costs helps domestic producers gain export markets. __________ are levied as a fixed charge for each for each unit of a good imported. Specific tariffs Tariffs fall into two categories ________ and _________. specific tariffs and ad valorem tariffs. GATT was, by most measures, ___________ in its early years. very successful Components of ___________ include tariffs, subsidies, import quotas, voluntary export restraints, local content requirements, administrative policies, and antidumping duties. trade policy One of the most famous examples of a(n) __________ is the limitation on auto exports to the United States enforced by Japanese automobile producers in 1981. voluntary export restraint One common political argument for government intervention is that it is necessary for protecting jobs and industries from "unfair" foreign competition. True  The intellectual case for free trade goes back to the late 18th century and the work of Adam Smith and David Ricardo. True Politically important interest groups can influence governments. True  In general, what are two types of arguments for government intervention into the free flow of trade? Political and economic A government should use subsidies to support promising firms that are active in newly emerging industries, according to the ______ argument. strategic trade policy The ____________ was a multilateral agreement whose objective was to liberalize trade by eliminating tariffs, subsidies, import quotas, and the like. General Agreement of Tariffs and Trade _______________ tends to be one of the largest beneficiaries of subsidies in most countries. Agriculture What is the ultimate objective of antidumping policies? Protect domestic producers from "unfair" foreign competition. The strategic trade policy argument of the new trade theorists advances an _______ justification for government intervention in international trade. economic A direct restriction on the quantity of some good that may be imported into a country is an import quota. True 
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10 ________ arguments challenges the rationale for unrestricted free trade found in the work of classic trade theorists such as Adam Smith and David Ricardo. Strategic trade policy Which of the following is a government payment to a domestic producer? subsidy Free trade refers to a situation where a government does not attempt to restrict what its citizens can buy from another country or what they can sell to another country. True  According to the author of the textbook, tariffs are __________ and __________. pro-producer and anti-consumer __________ arguments for government intervention into international trade are typically concerned with furthering the security of its citizens. political In the context of international trade, __________ is defined as selling goods in a foreign market at a price below their costs of production or as selling goods in a foreign market at below their "fair" market price. dumping Local content regulations have been widely used by __________ to shift their manufacturing base from the simple assembly of products whose parts are manufactured elsewhere into the local manufacture of component parts. developing nations __________ is not one of the main reasons that protectionist pressures arose around the world during the 1980s. The opening of Japanese markets to imports According to the author of the textbook, tariffs benefit the following two groups: government and producers Which of the following is not an example of one of the main instruments in trade policy used by governments around the world? political mandate Local content requirements benefit the ______________ of component parts, but they raise prices of imported components, which hurts _____________. producers; consumers According to the __________ argument, many developing countries have a potential comparative advantage in manufacturing, but new manufacturing industries there cannot initially compete with well-established industries in developed countries. To allow manufacturing to get a toehold, the argument is that governments should temporarily support new industries (with tariffs, import quotas, and subsidies) until they have grown strong enough to meet international competition. infant industry __________ are designed to punish foreign firms that engage in dumping. Antidumping policies Typically, at the request of the importing country, a quota on trade imposed by the exporting country is referred to as a voluntary export restraint. True By far, the oldest economic argument for government intervention into the free flow of trade is the __________ argument. infant industry A voluntary export restraint is a quota on trade imposed by the exporting country. True An alleged example of __________ occurred in 1997, when two Korean manufacturers of semiconductors, LG Semicon and Hyundai Electronics, were accused of selling dynamic random access memory chips in the U.S. market at below their costs of production. dumping
11 At one time, the French government required that all imported videocassette recorders arrive in France through a small customs entry point that was both remote and poorly staffed. This policy, which in effect made it impractical for a foreign company to import videocassette recorders to France, is an example of a(n) administrative trade policy The __________ was created to arbitrate trade disputes and monitor the trade policies of member countries as a result of the Uruguay Round agreement. World Trade Organization By lowering production costs, ____________ help domestic producers compete against foreign imports. subsidies An example of a(n) _______ that limits imports is if a country restricted the import of a particular good to a remote seaport that made it extremely difficult for any other country to import the good profitably. administrative trade policy What demands that some specific fraction of a good be produced domestically? local content requirement Some would argue that ___________ are the masters of administrative trade policies. Japan VER stands for: Voluntary export restraint. According to the textbook, Paul Krugman, a professor at MIT, predicts that a country that attempts to use strategic trade policy to establish a domestic firm (or firms) in a dominant position in a global industry will probably: Provoke retaliation. If Apple won an order to sell 500 of its new minicomputers to Australia, but the Australian government stipulated that 20 percent of the component parts of the minicomputers that it purchased must be produced in Australia, that stipulation would be an example of a(n) local content requirement. Which of the following is not a disadvantage of government intervention in trade policy? Intervention in the form of tariffs, quotas, and subsidies can help firms and industries establish a competitive advantage in the world economy. Consider the following scenario. The Netherlands exports tulip bulbs to almost every country in the world except Japan. The reason is that Japanese customs inspectors insist on checking every tulip bulb by cutting it down the middle (which destroys the bulb). The insistence on the part of the Japanese to inspect the bulbs in this manner (which makes it impractical for the Netherlands to export to Japan) is an example of a(n) administrative trade policy. While __________ tariffs are levied as a fixed charge for each unit of a good imported, __________ tariffs are levied as a proportion of the value of the imported good. specific; ad valorem Antidumping duties are often called _____________. countervailing duties __________ are the oldest and simplest instrument of trade policy. Tariffs __________ arguments for government intervention into international trade are typically concerned with boosting the overall wealth of a nation. economic Primarily as a result of pressure from the developing world, it was recognized the ______ argument was a legitimate reason for protectionism. infant industry According to _______, subsidies can help a firm achieve a first-mover advantage in an emerging industry. strategic trade policy
12 An important component of _____ is that it might pay governments to intervene in an industry if it helps domestic firms overcome the barriers to entry created by foreign firms that have already reaped first-mover advantages. strategic trade policy Perhaps the most common political argument for government intervention into the free flow of trade is that: It is necessary for protecting jobs and industries from foreign competition. According to the opening casa, sugar programs primarily help sugar producers. True  The infant industry argument is the oldest economic argument for government intervention. True  The acronym WTO stands for World Trade Organization Which of the following refers to a situation where a government does not attempt to restrict what its citizens can buy from another country or what they can sell to another country? free trade GATT rules had applied only to manufactured goods and commodities until the Uruguay Round. True  Countries sometimes argue that it is important to protect certain industries for reasons of national security. True  Tariffs cause the most damage to whom? consumers A quota on trade imposed by the exporting country, typically at the request of the importing country's government is referred to as a(n) voluntary export restraint. According to the strategic trade policy argument, a government should use subsidies to do what? Support promising firms in emerging industries. If Westvaco decided to produce paper in Spain, and the Spanish government stipulated that 50% of the component parts that went into Westvaco's paper must be produced locally, that requirement would be an example of a(n) local content requirement. A local content requirement demands that some specific fraction of a good be produced domestically. True  An indirect effect of protecting consumers from "unsafe" products is to ____________ limit or ban the importation of the products. An import quota is a direct restriction on the quantity of some good that may be imported into a country. If _______ exist, a charge of "dumping" can be levied against a foreign firm. goods are being sold at below their cost of production or goods are being sold at below their "fair" market value What do tariffs do? reduce efficiency because a protective tariff encourages domestic firms to produce products at home Due to __________, according to our textbook, government intervention in trade policy is unlikely to be well executed. the impact of special interest groups The main gains from subsidies accrue to __________, whose international competitiveness is increased as a result of them. domestic producers Who is noted for making the following statement, "There is one and only one social responsibility of business-to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say that it engages in open and free competition without deception of fraud."? Milton Friedman
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13 The Universal Declaration of Human Rights is a _________ document that lays down the basic principles of human rights that should be adhered to. United Nations __________ refers to the values and norms that are shared among employees of an organization. Organization culture Generally accepted principles of right and wrong governing individual conduct are known as what? personal ethics Ethical issues arise when environmental regulations in host countries are inferior to those in the home nation. True  Many of the ethical issues that arise when companies do business in different nations manifest themselves because of differences, such as is found in the economic environment, political systems and laws of those nations. True  __________ are situations in which none of the available alternatives seem ethically acceptable. Ethical dilemmas The ________ oblige(s) member states to make the bribery of foreign public officials a criminal offence. Convention on Combating Bribery of Foreign Public Officials in International Business Transactions In Rawls' philosophy, the principle that each person be permitted the maximum amount of basic liberty compatible with a similar liberty for others is known as the ____ principle. first The concept of corporate social responsibility refers to the idea that businesspeople should consider the social consequences of economic actions when making business decisions. True  Some economists have argued that corruption reduces the returns on business investment and leads to low economic growth. True  A(n) __________ is one that is considered fair and equitable. just distribution The first step to establishing a strong sense of business ethics is for a company to emphasize ________. strong personal ethics An individual with a strong sense of personal ethics is ______ to behave in an unethical manner in a business setting. less likely The course of action that a business opts to take and which does not violate accepted principles is known as an ethical strategy. True Of the following, which assist organizations to think through the ethical implications of decision in a systematic way? Rights theories and Rawls' theory of justice. The way working conditions are maintained by a business refers to the __________ of that business. employment practices When an employee says no to a supervisor because what he or she was asked to do was unethical, it is _______ that provides the employee with the strength to say no. moral courage Expatriate managers may experience more than the usual degree of what? ethical dilemmas In the international business setting, the most common ethical issues involve all EXCEPT which one of the following? border control __________ is the belief that ethics are nothing more than the reflection of a culture and are culturally determined.
14 Cultural relativism An ethical dilemma is a situation where there is no ethically acceptable solution. True The Enron examples show that it is not just what leaders say that matters but ___________. what they do. Of the following, whose basic position is that the only social responsibility of business is to increase profits so long as the company stays within the rules of law? Milton Friedman _________ approaches to business ethics are raised by business ethics scholars primarily to demonstrate that they offer inappropriate guidelines for ethical decision-making in a multinational enterprise. Straw men In ____________, member states of the OECD adopted the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions. 1997 Moral theorists argue that fundamental human rights form the basis for the ________ that managers should use when making decisions that have an ethical component. moral compass According to your text, which Canadian province has become a lightning rod of criticism regarding corruption? Quebec Many of the ethical issues and dilemmas in international business are rooted in the fact of differences in all BUT which one of the following? monetary values The trade and finance ministers of the OECD followed the lead of the U.S. in 1997 and adopted a convention on bribery in international business. True  A firm's _________ are individuals or groups that have an interest or claim in what the company does and in how well it performs: stakeholders At which step of a stakeholder analysis would an organization to audit its decisions to see if they were consistent with ethical principles? Step 5 Some economists have argued that ________ reduces the returns on business investment and leads to low economic growth. corruption In Rawls' philosophy, the _________ indicates that inequalities are justified if they benefit the position of the least-advantaged members of society. difference principle In order for the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions to be truly effective, what must happen? the convention must be translated into laws by each signatory nation Which one of the following is NOT considered to be a valued human right? Freedom condoning political oppression At which step of a stakeholder analysis would an organization's managers establish moral intent? Step 3 Having articulated values in a code of ethics or some other document, leaders in the business must give life and meaning to those words by _________. repeatedly emphasizing their importance Basic human rights are still not respected in many other nations. True 
15 What is considered by some to be the root cause contributing to the demise of the organization known as Enron? organization culture A code of ethics is a formal statement of the ethical priorities a business adheres to. True  A ____________ claims that a multinational's home-country standards of ethics are the appropriate ones for companies to follow in foreign countries. righteous moralist Which ethics approach is typically associated with managers from developed countries? The righteous moralist All of the following would be considered to be that which individuals are ignorant of under John Rawls' veil of ignorance EXCEPT ________. political affiliation Gift-giving between parties to a business negotiation is considered right and proper in many ________ cultures. Asian Organization culture refers to the vales and norms that are shared among employees of an organization. True  Home-country managers working abroad in multinational organizations may experience _________ than the usual degree of pressure to violate their personal ethics. more Article 1 of the Universal Declaration of Human Rights is thought to echo ________ ethics. Kantian Stakeholder analysis involves a certain amount of what has been called ______. moral imagination Developed in the 20th century, _______ recognize(s) that human beings have fundamental rights and privileges that transcend national boundaries and cultures. rights theories ________ focus on the attainment of a just distribution of economic goods and services. Justice theories In a country where corruption is common, businesses have a reduced incentive to invest. True Which one of the following could be considered a reason why organizations may make decisions that ultimately lead to unethical business actions being undertaken? They have based the decision on economic logic only. A _________ is a formal statement of the ethical priorities a business adheres to. code of ethics People who work for or own the company such as employees, board of directors, and stockholders are better identified as _________. internal stakeholders An example of a "straw man" argument is the Friedman Doctrine. True All of the following are examples of moral courage except __________. competing with your colleagues for promotions Businesses can make sure they are hiring individuals who match well with their established ethical guidelines if they undertake all EXCEPT which one of the following? Hire only relatives of current organizational employees.
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16 Fundamental human rights form the basis of what? Rights theory Of the following, which one would NOT be considered a rationale for why managers may behave in a manner that is unethical? The personal ethical code of the individual staunchly recognizes the difference between right and wrong. What does Article 29 of the Universal Declaration of Human Rights convey? Everyone has duties to the community. The ethical obligations of a multinational corporation toward employment conditions, human rights, and corruption are not always clear- cut. True  Article 23 of the Universal Declaration of Human Rights conveys all EXCEPT which one of the following? Everyone has the right to work under unsafe working conditions. When outsourced firms provide products at a lower cost, a consideration is how the provider: Is doing it cheaper Of the following, which assist organizations to think through the ethical implications of decision in a systematic way? impartiality Along with rights comes what? obligations Rawls' considers all but ________ to be political liberties. right to bear arms. External stakeholder groups would most likely be comprised of all but which one of the following? employees Which of the following is NOT one of the five things an international business and its managers can do to make sure ethical issues are considered in business decisions? Promote individuals with a proven track record of unethical behaviours. What theory recognizes that human beings have fundamental privileges that transcend national boundaries and cultures? The rights theories In its extreme viewpoint, _________ suggests that if a culture supports slavery, it is all right to use the slave labour in the country. cultural relativism ________ are responsible for making sure that all employees are trained to be ethically aware and that ethical considerations enter the business decision-making process. Ethics officers Which one of the following could be considered a reason why organizations may make decisions that ultimately lead to unethical business actions being undertaken? They do not incorporate ethics into business decision making. Philosopher _________ argued that all economic goods and services should be distributed equally except when an unequal distribution would work to everyone's advantage. John Rawls ____________ asserts that if a manager of a multinational sees that firms from other nations are not following ethical norms in a host nation, that manager should not either. The naïve immoralist _______, according to Michael Porter, are a nation's position in factors of production such as skilled labour or the infrastructure necessary to compete in a given industry. Factor endowments __________, the first theory of international trade, principal assertion was that gold and silver were the mainstays of national wealth and essential to vigorous commerce. Mercantilism's
17 Domestic rivalry creates pressure to do all of the following except: to improve employee relations. The economic and strategic advantages that accrue to early entrants in an industry are called: first-mover advantages. Which theory stresses that in some cases countries specialize in the production and export of particular products not because of underlying differences in factor endowments but because in certain industries the world market can support only a limited number of firms? New trade The potential world production is greater with unrestricted free trade than it is with restricted free trade is the basic message of the theory of comparative advantage. True  Propagated in the 16th and 17th centuries, __________ advocated that countries should simultaneously encourage exports and discourage imports. mercantilism When a country is more efficient than any other country in producing a product, it has an absolute advantage in the production of that product. True  The theory of comparative advantage: provides a strong rationale for encouraging international trade. According to Porter, the four broad attributes of a nation that shape the environment in which local firms compete and that promote or impede the creation of competitive advantage are demand conditions, firm strategy, structure, and rivalry, factor endowments, and relating and supporting industries. True  A situation in which a country specializes in producing the goods it produces most efficiently and buys the products it produces less efficiently from other countries, even if it could produce the good more efficiently itself is referred to as: comparative advantage. In his study dealing with the competitive advantage of nations, Porter argued that in regard to demand conditions, a nation's firms' gain competitive advantage if their domestic consumers are __________ and __________. sophisticated; demanding Which of these occurs if an economy is opened to trade? Free trade might increase the efficiency with which a country uses its resources. __________ basic argument, articulated through the theory of absolute advantage, is that a country should never produce goods at home that it can buy at a low cost from another country. Adam Smith's In his 1776 landmark book, The Wealth of Nations, __________ attacked the mercantilist assumption that trade is a zero-sum game. Adam Smith Porter argued that in regard to factor endowments, __________ factors are the most significant for competitive advantage in his study dealing with the competitive advantage of nations. advanced In terms of explaining why some countries export automobiles, consumer electronics, and machine tools, while other countries export chemicals, watches, and jewellery, David Ricardo's theory of comparative advantage offer an international differences in labour productivity. According to the new trade theorists, because early entrants are able to gain __________, the early entrants into an industry may get a lock on the world market that discourages subsequent entry. economies of scale The conditions governing how companies are created, organized, and managed and the nature of domestic rivalry is referred to as: firm strategy, structure, and rivalry.
18 The main tenet of mercantilism was that it was in a country's best interest to maintain a(n) : export trade surplus Ricardo's theory of comparative advantage suggests that consumers in all nations can consume more if there are: no trade restrictions. _______, by its choice of policies, can detract from or improve national advantage. Government The theory of comparative advantage, advanced by __________, is the intellectual basis of the modern argument for unrestricted free trade. David Ricardo Which of the following two theories justify some limited and selective government intervention to support the development of certain export-oriented industries? The new trade theory and theory of national competitive advantage. A situation in which a gain by one party results in a loss by another is called a(n) __________. zero-sum game Porter argues that the presence of all components is usually required for the "diamond" to boost: competitive performance. The theory of __________ was advanced by Adam Smith. absolute advantage Which of the following international management scholars first argued that countries differ in their ability to produce goods efficiently? Adam Smith Which of the following international trade scholars was the first to explain why unrestricted free trade is beneficial to a country? Adam Smith Smith's basic argument was that a country should never produce goods at home that it can buy at a lower cost from other countries. True  The flaw with mercantilism was that it viewed trade as a zero-sum gain. True  According to Smith, countries should specialize in the production of goods for which they have an absolute advantage and then: trade these goods for the goods produced by other countries. The new trade theorists argue that in those industries where the existence of substantial economies of scale imply that the world market will profitable support only a few firms, countries may export certain products simply because they have a firm that was an early entrant into that industry. True In his 1817 book entitled Principles of Political Economy, __________ introduced the theory of comparative advantage. David Ricardo We would expect Porter's model to predict _______, if he is correct. the pattern of international trade The theory of __________, developed by Michael Porter, focuses on the importance of country factors such as domestic demand and domestic rivalry in explaining a nation's dominance in the production and export of particular products. national competitive advantage To an even greater degree than the theory of absolute advantage, the theory of __________ suggests that trade is a positive-sum game in which all gain. comparative advantage Who argued that successful industries within a country tend to be grouped into "clusters" of related industries? Porter
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19 _______ is consistent with the central beliefs of mercantilism. Policies should be put in place to encourage exports and discourage imports New trade theorists stress the role of the following three variables in giving firm first-mover advantages? entrepreneurship, favourable foreign exchange rates, and innovation luck, entrepreneurship, and innovation Unlike the naturally endowed basic factors, advanced factors are a product of investment by all of the following except: demographics. _______ is/are unit cost reductions associated with a large scale of output. Economies of scale Which theory of international trade directly explains why there are only two to three producers of airlines in the world today? new trade __________ refers to a situation where a government does not attempt to influence through quotas or duties what its citizens can buy from another country or what they can produce and sell to another country. Free trade The flaw with mercantilism was that it viewed trade as a __________. zero-sum game A firm should invest in upgrading advanced factors of production because it is in the best interest of business for a firm, according to Porter's theory. True  Porter's thesis was that four broad attributes of a nation shape the environment in which local firms compete, and that these attributes promote or impede the creation of competitive advantage. All of the following is/are attributes except: customs The __________ theory argues that due to the presence of substantial scale economies, world demand will support only a few firms in many industries. new trade In 1990, who published the results of an intensive research effort that attempted to determine why some nations succeed and others fail in international competition? Michael Porter Free trade is a situation where a government does not attempt to influence through quotas or duties what its citizens can buy from another country or what they can produce and sell to another country. True  _______ is the basic message of the theory of comparative advantage. Potential world production is greater with unrestricted free trade than it is with restricted trade Which of the following statements accurately characterizes mercantilism? It still influences many governments. Dynamic gains in both the stock of a country's resources and the efficiency with which resources are utilized will cause a country's PPF to: shift outward. Because of substantial economies of scale, the __________ theory argues that in many industries there are increasing returns to specialization. new trade _______ is a situation in which one country is more efficient at producing a product than any other country. Absolute advantage One of the limitations to the theory of comparative advantage is that it assumes: constant returns to scale. Economies of scale increases the efficiency of resource utilization, therefore increasing what?
20 productivity A rationale for wanting control over the operations of a foreign entity is that the firm might wish to take advantage of differences in factor costs across countries, producing only part of its final product in a given country, while importing other parts from where they can be produced at a lower cost. True  The beneficial effects of FDI may be reduced if most management and highly skilled jobs in the subsidiaries of foreign firms are reserved for _______________ nationals. home-country Externalities are knowledge spillovers that occur when companies in the same industry locate in the same area. True Since World War II, the largest source country for FDI outflows has been _____________, though this is not true today. United States Many investor nations now have government backed insurance programs to cover major types of foreign investment risk. The types of risks insurable through these programs include all of the following except: strategic business blunders. For the most part Canadian FDI outflow in last few years went to ________________. Canadian affiliates and subsidiaries Because of the problems associated with doing business in a different culture where the "rules of the game" may be very different, FDI is risky. True  The _____________ of foreign direct investment refers to the amount of FDI undertaken over a given period (normally a year). The _____________ of foreign direct investment refers to the total accumulated value of foreign-owned assets at any time. flow; stock A firm will favor foreign direct investment over exporting as an entry strategy when transportation costs or trade barriers make exporting unattractive. True  ______________ is (are) not a common incentive that governments offer foreign firms to invest in their countries. Free media advertising In practice, many countries have adopted neither a radical policy nor a free market policy toward FDI, but instead a policy that can best be described as pragmatic nationalism. True  The establishment of Japanese automakers' branch plants in Canada does not help the U.S. in terms of its _________________. balance-of-payments accounts. The flow of foreign direct investment into a country is referred to as the: inflow of FDI. Which is a possible adverse effect of FDI on a host country's balance-of-payments position? Set against the initial capital inflow that comes with FDI must be the subsequent outflow of income as the foreign subsidiary repatriates earnings to its parent company. If 3M, an American firm, produces adhesive tape in St. Paul, Minnesota, and ships the tape to South Korea to be sold, that is an example of: exporting The _______________ view of FDI traces its roots to Marxist political and economic theory. radical The ________________ view is that FDI has both benefits and costs. pragmatic nationalist Three main costs of inward FDI concern host countries. These are:
21 The possible adverse effects of FDI on competition within the host country, adverse effects on the balance of payments, and the perceived loss of national sovereignty and autonomy. If a Canadian corporation decides to create FDI in Mexico because the new plant site has lower costs, this can cause Canada to: deteriorate its trade position. In a ________________ view, FDI should be allowed only if the benefits outweigh the costs. pragmatic nationalism International trade theory tells us that home country concerns about the negative economic effects of offshore production: may be misplaced. ______________ are knowledge spillovers that occur when companies in the same industry locate in the same area. Externalities Dunning argues that combining location specific assets or resource endowments and the firm's own unique capabilities often requires: FDI. For the most part FDI flows have _____________ over the past 35 years. grown When transportation costs are added to production costs, it becomes unprofitable to ship some products over a large distance. This is particularly true of products that have a(n) : low value-to-weight ratio. FDI is an acronym that stands for Foreign Direct Investment. Historically, there have been high levels of FDI outflows from the United States. True  When ________________, a firm will favor FDI over exporting as an entry strategy, according to the textbook. transportation costs or trade barriers make exporting unattractive The _______________ view argues that international production should be distributed among countries according to the theory of comparative advantage. free market When two or more enterprises encounter each other in different regional markets, national markets, or industries, _____________ arises. multipoint competition Much foreign direct investment is undertaken as a response to actual or threatened: trade barriers. Most FDI has been directed at the developed nations of the world as firms based in advanced countries invested in the others' markets. True  Some of Toyota's competitive advantage is due to its superior ability to manage the design, engineering and manufacturing of its automobiles. Despite the fact that some of its products could be licensed for production by another company it does not do so because _____________. another company could not be as efficient a producer of cars as Toyota Camelot Baby Carriages decided to enter the European market. Sam's Strollers followed to ensure that Camelot would not gain competitive advantage in Europe that could lead to the same thing occurring in Asia. Sam's then decides to enter the Australian market, and Camelot follows. This is an example of: multipoint competition. ________________ are three main benefits of inward FDI for a host country. The resource-transfer effect, the employment effect, and the balance-of-payments effect What is the record of a country's export and import of goods and services referred to as? Current account
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22 The stock of foreign direct investment refers to the total accumulated value of foreign-owned assets at a given time. True  The licensor _____________ in return for licensing one of its products to a foreign firm. collects a royalty fee on every unit the licensee sells It is increasingly common for governments to: offer incentives to firms that invest in their countries. _______________ has not contributed to the increase in FDI over the past several years. Dramatic shifts towards socialist and communist political institutions Radical writers believe that _____________ extract profits from the host country and take them to their home country, giving nothing of value to the host country in exchange. MNEs Advantages that arise from using resource endowments or assets that are tied to a particular location and that a firm finds valuable to combine with its own unique assets are referred to as: location-specific advantages. Which of the following is NOT a reason that the radical position of MNEs was in retreat by the end of the 1980s? The rise of democracy in the Western countries. The flow of foreign direct investment out of a country is: outflow of FDI. _____________ occurs, according to the U.S. Department of Commerce, whenever a U.S. citizen, organization, or affiliated group takes an interest of 10 percent or more in a foreign business entity. Foreign direct investment Historically, most FDI has been directed at ______________. developed nations The MNE is seen as an instrument for dispersing the production of goods and services to those locations around the globe where they can be produced most efficiently, according to the ________________ view. free market Host governments use a range of controls to restrict FDI. The two most common are: ownership restraints and performance requirements. _______________, a branch of economics, seeks to explain why firms often prefer foreign direct investment to licensing as a strategy for entering foreign markets. Internalization theory FDI is often undertaken as a response to: threatened import tariffs The members of the Organization for Economic Cooperation and Development include: most European countries, the United States, Canada, Japan, and South Korea. _______________ involves producing goods at home and then shipping them to the receiving country for sale. Exporting Although it normally involves much longer-term commitments, franchising is essentially the service industry version of: licensing. There are possible adverse effects of FDI on a host country's balance of payments. True  If TransCanada Pipelines, a Canadian based corporation, purchased a 50% interest in a company in Italy, that purchase would be an example of: foreign direct investment. Which of the following two statements accurately reflects the trend in foreign direct investments over the past 35 years?
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23 There has been a rapid increase in the total volume of FDI undertaken and there has been a change in the importance of various countries as sources for FDI. If Siemens, a German firm, purchased a 20% interest in a manufacturing firm in Canada, Siemens would be engaging in: foreign direct investment. Countries have been known to occasionally manipulate _____________ to try to encourage their firms to invest at home. tax rules Which of the following involves granting a foreign entity the right to produce and sell the firm's product in return for a royalty fee on every unit sold? licensing Generally speaking, there has been a(n) ______________ in the past 35 years. marked increase in both the flow and stock of FDI in the world economy McDonalds has expanded into foreign markets primarily through: franchising. A country's _______________ tracks both its payments to and its receipts from other countries. balance-of-payments account When a firm invests directly in new facilities to produce and/or market a product in a foreign country, _____________ occurs. foreign direct investment A Paris-based intergovernmental organization of "wealthy" nations whose purpose is to provide its 34 member states with a forum in which governments can compare their experiences, discuss the problems they share, and seek solutions that can be applied within their own national contexts is referred to as: Organization for Economic Cooperation and Development. High transportation costs and/or tariffs imposed on imports help explain why many firms prefer _____________ over _____________. foreign direct investment or licensing; exporting Regarding the costs of FDI for the home country, the most important concerns center around: the balance-of-payments and employment effects of outward FDI. An industry composed of a limited number of large firms (i.e. an industry in which four firms control 80 percent of a domestic market) is referred to as a(n) : oligopoly. Because a firm must establish production facilities in a foreign country or acquire a foreign enterprise, FDI is expensive. True  Silicon Valley has a ______________ in the generation of knowledge related to the computer and semi-conductor industries, when looked at by Dunning's theory. location specific advantage The establishment of a wholly new operation in a foreign country is referred to as a(n) : greenfield investment Other things being equal, investing in countries that are permissive to FDI is preferable to investing in countries that restrict FDI. True Monetary discipline was a central objective of Bretton Woods, and a rigid policy of fixed exchange rates was _______________. seen as too inflexible. Under a pegged exchange rate regime, a country will peg the value of its currency to _______. that of a major currency. What do many Canadian businesspeople NOT buy into with respect to the value of the Canadian dollar? A stronger dollar will reduce demand for Canada's exports. The law of one price states that identical products sold in different countries must sell for the same price when their price is expressed in the same currency in competitive markets free of transportation costs and barriers to trade.
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24 True  _____________ are reported on a real time basis on many financial Web sites. Spot exchange rates Without the ____________ market, international trade and international investment on the scale that we see today would be impossible. foreign exchange Inflation is a(n) _____________ phenomenon. monetary The market through which an individual or institution exchanges one currency into another is called the foreign exchange market. True  A government restricts the convertibility of its currency to protect the country's _____________ and to halt any capital flight. foreign exchange reserves Under a floating exchange rate regime, market forces have produced what? A volatile U.S. dollar exchange rate. A ______________ exchange occurs when two parties agree to exchange currency and execute the deal at some specific date in the future. forward The foreign exchange market serves two main functions. These are what? Convert the currency of one country into the currency of another and provide some insurance against foreign exchange risk. The foreign exchange market converts the currency of one country into the currency of another and: provides some insurance against foreign exchange risk. Currency speculation typically involves the short-term movement of funds from one currency to another in the hopes of profiting from shifts in exchange rates. True  A currency is said to be externally convertible when only non-residents may convert it into foreign currency without limitations. True  The law of one price and purchasing power parity are two components of: price and exchange rates. Pegged exchange rates are popular among many of the world's ___________. smaller nations. Spot exchange rates change daily as determined by the relative demand and supply for difference currencies. True  _____________ typically involves the short-term movement of funds from one currency to another in the hopes of profiting from shifts in exchange rates. Currency speculation According to our textbook, when the growth in a country's money supply is faster than the growth in its output, _____________ is (are) fueled. inflation Moral hazard occurs when people behave recklessly because they know they will be saved if things go wrong. True  It is argued that a floating exchange rate regime gives countries monetary policy autonomy. True  The process of buying a currency low and selling it high at the same time is called: arbitrage.
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25 ______________ also adds to the uncertainty surrounding future currency movements that characterizes floating exchange rate regimes. Speculation Fixed exchange rates are seen as a mechanism for achieving the following two objectives: controlling inflation and economic discipline. The case for fixed exchange rates rests on arguments about monetary discipline, speculation, uncertainty, and the lack of connection between the trade balance and exchange rates. True  When two parties agree to exchange currency and execute the deal immediately, the transaction is referred to as a ______________. spot exchange. It is necessary to use a ______________ exchange rate to execute a transaction immediately. spot The case for fixed exchange rates rests on arguments about monetary discipline, speculation, the lack of connection between the trade balance and exchange rates, and _______________. uncertainty. The three factors that have the most important impact on future exchange rate movement include the country's price inflation, its market philosophy, and its ______________. interest rate. The _____________ is a market for converting the currency of one country into that of another. foreign exchange market There is some evidence that adopting a pegged exchange rate regime _________________. moderates inflationary pressure in a country In addition to altering the value of trade deals and foreign investments, currency movements can also open or close export opportunities and alter the attractiveness of imports. True  The ______________ exchange rate regime that followed the collapse of the fixed exchange rate system was formalized in January 1976 when IMF members met in Jamaica and agreed to the rules for the international system that are in place today. floating If the prices differed in London and New York and a dealer spent $1 million to purchase × 125 million, then sold that × 125 immediately for $1.046666 million, the trader would earn a profit of $46,666 on the transaction. This is accomplished through: arbitrage. Canadian businesses will normally use the ________________ in international transactions. U.S. dollar It is argued that a _______________ exchange rate regime gives countries monetary policy autonomy. floating Although the _____________ offers some insurance against foreign exchange risk, it cannot provide complete insurance. foreign exchange market At the most basic level, exchange rates are determined by the demand and supply of one currency relative to the: demand and supply of another. Under a ______________ exchange rate regime, a country's ability to expand or contract its money supply as it sees fit is limited by the need to maintain exchange rate parity. fixed The case for floating exchange rates has two main elements. These are: monetary policy autonomy and automatic trade balance adjustments. _____________ occurs when an investor purchases securities in one market for immediate resale in another. Arbitrage
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26 The ______________ is the market that enables companies based in countries that use different currencies to trade with each other. foreign exchange market Without the foreign market exchange, international trade and international investment on the scale that we see today would be impossible. True  Although a foreign exchange transaction can involve any two currencies, most transactions involve: U.S. dollars. ______________ determines whether the rate of growth in a country's money supply is greater than the rate of growth in output. Government policy A(n) ______________ is purchase and sale of a given amount of foreign exchange for two different value dates, at the same time. currency swap An exchange rate is simply the rate at which one currency is converted into another. True  When a U.S. tourist in Japan goes to a bank to convert her dollars into Japanese yen, the exchange rate is the: spot exchange rate. The movement of foreign exchange rates: introduces many risks into international trade and investment. Floating exchange rates are determined by what? Market forces ______________ is most likely to occur when the value of the domestic currency is depreciating rapidly because of hyperinflation. Capital flight Currency speculation typically involves what? The short-term movement of funds from one currency to another in the hopes of profiting from shifts in exchange rates. Economic theory tells us that _____________ rates reflect expectations about likely future inflation rates. interest One function of the foreign exchange market is to provide some insurance against the risks that arise from changes in exchange rates, commonly referred to as: foreign exchange risk. Rates for currency exchange quoted for 30, 90, or 180 days into the future are referred to as _____________. forward exchange rates. A currency swap is the simultaneous purchase and sale of a given amount of foreign exchange for two different value dates. True  The rate at which one currency is converted into another is called the ___________. exchange rate A currency is _____________ when neither residents nor non-residents are allowed to convert it into a foreign currency. nonconvertible A currency value that is fixed relative to a reference currency is called what? Pegged exchange rate ______________ are seen as a mechanism for controlling inflation and imposing economic discipline on countries. Fixed exchange rates Monetary policy autonomy and automatic trade balance adjustments are the two main elements of the case for fixed exchange rates. False
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27 Under the exchange rate system established by the Bretton Woods agreement, the value of most currencies in terms of ______________ was fixed for long periods and was allowed to change only under a specific set of circumstances. U.S. dollars The inevitable result of excessive growth in money supply is called: price inflation. The value of a currency is determined by: the interaction between the demand and supply of that currency relative to the demand and supply of other currencies. A forward exchange occurs when two parties agree to exchange currency and execute the deal at some specific date in the future. True  Pegging currencies to gold and guaranteeing convertibility is known as what? gold standard A fixed exchange rate regime imposes discipline in two ways: (1) the need to maintain a fixed exchange rate puts a brake on competitive devaluations and brings stability to the world trade environment and (2) a fixed exchange rate regime imposes what? Monetary discipline on countries, thereby curtailing price inflation. A country's currency is said to be _____________ when the country's government allows both residents and non-residents to purchase unlimited amounts of foreign currency with it. freely convertible ______________ exchange rates represent market participants' collective predictions of likely spot exchange rates at specified future dates. Forward Institutional arrangements that countries adopt to govern exchange rates refers to what? International monetary system Most economic theories suggest that three import factors have an important impact on future exchange rate movements in a country's currency. These factors are: the country's price inflation, its interest rate, and its market philosophy. "Free float" exchange rates are determined by _____________. market forces If a Canadian grain company exported corn to Russia, and instead of receiving nonconvertible Russian currency in exchange for the corn received Russian crude oil, that would be an example of ______________. countertrade. Removal of the obligation to maintain exchange rate parity restores monetary control to a government is the argument of advocates of a floating exchange rate regime. True  Tourists are minor participants in what? The foreign exchange market A currency is said to be ______________ when only non-residents may convert it into a foreign currency without any limitations. externally convertible ______________ refers to a range of barter-like agreements by which goods and services can be traded for other goods and services. Countertrade When a tourist exchanges one currency into another, she is participating in the: foreign exchange market. At the basic level, exchange rates are determined by the demand and supply of one currency relative to the demand and supply for another. True  Countertrade refers to a range of barter-like agreements by which goods and services True 
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28 A _______________ eliminates trade barriers between member countries and adopts a common external trade policy. customs union In 1990, the MERCOSUR pact was expanded to include: Paraguay and Uruguay. ______________ occurs when high-cost domestic producers are replaced by low-cost producers within the free trade area. Trade creation In a _____________, theoretically, there are no discriminatory tariffs, quotas, subsidies, or administrative impediments distorting trade between members. free trade area According to the textbook, one likely short-term effect of NAFTA would be that many U.S. and Canadian firms will move some production to Mexico to take advantage of: lower labour costs. The principle argument of those that opposed NAFTA centered around the fear that ratification would result in: many Canadian and U.S. jobs transferred to Mexico. The most recent countries to become a members of ASEAN are: Vietnam, Laos, and Myanmar The Single European Act was born out of frustration among EC member countries that the community was not living up to its promise. True  The original forerunner of the EU, the __________ was formed in 1951 by Belgium, France, West Germany, Italy, Luxembourg, and the Netherlands. European Coal and Steel Community Which of the following selections accurately depicts the levels of economic integration from least integrated to most integrated? Free trade area, customs union, common market, economic union, and full political union In a free trade area all barriers to the trade of goods and services among member countries are removed. True  No other attempt at regional integration comes close to(the) ______________ in its boldness or its potential implications for the world economy. EU The two main reasons that have made economic integration difficult to achieve are: concerns over costs and concerns over national sovereignty. Europe has been the most successful example of regional economic integration. True  The objective of the _______________ was to remove barriers to intragroup shipments of coal, iron, steel, and scrap metal. European Coal and Steel Community In a free trade area: barriers to the trade of goods and services among member nations are removed. Which of the following statements is true in regard to economic unions? There are no true economic unions in the world today. The European Community was established in: 1957. The political case for regional _______________ has also loomed large in most attempts to establish free trade areas, customs unions, and the like. economic integration According to the textbook, Countries in _____________ have been, mostly unsuccessfully, experimenting with regional trade blocks for 50 years.
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29 Africa Economic theories suggest that free trade and investment is a positive-sum game, in which: all participating countries stand to gain. The European Free Trade Association currently includes the following four countries: Norway, Iceland, Switzerland, and Liechtenstein Currently, the four member states of MERCOSUR include: Brazil, Argentina, Paraguay, and Uruguay. The lowering of _______________ between countries is likely to lead in increased price competition throughout the EU and NAFTA. barriers to trade Many now see the _____________ as the emerging economic and political superpower of the same order as the United States and Japan. European Union Which of the following was NOT one of the purposes of the Single European Act? Remove the principle of "mutual recognition" as it pertains to product standards. The initial principles of The Andean Group included all of the following EXCEPT what? Common currency among member nations. The following three countries implemented the North American Free Trade Agreement (NAFTA): Canada, Mexico, and the United States Establishment of a _______________ trade policy necessitates significant administrative machinery to oversee trade relations with non- members. common external The most enduring free trade area in the world is the European Free Trade Association. True Which of the following was created to end the EC's economic divisions? The Delors Commission The ______________ is directly elected by the populations of the member states. European Parliament MERCOSUR originated in 1988 as a free trade pact between ______________. Brazil and Argentina With the signing of the Treaty of Rome in 1957, the ______________ was established. European Community Agreements among countries in a region to reduce and ultimately remove tariff and nontariff barriers are known as regional economic integration. True  In 1988 the governments of the United States and Canada agreed to enter in a ______________, which went into effect on January 1, 1989. free trade agreement The European Free Trade Association (EFTA) is: founded by Western European countries that were not initially part of the European Community. The _______________ was born of a frustration among EC members that the community was not living up to its promises. Single European Act To signify the importance of the ______________, the European Community decided to change its name to the European Union once the act took effect. Single European Act
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30 Like a customs union, the theoretically ideal ________________ has no barriers to trade between member countries and a common external trade policy. common market A customs union eliminates trade barriers between member countries and adopts a common external trade policy. True  In theory, _______________ rules should ensure that a free trade agreement does not result in trade diversion. World Trade Organization According to our textbook, the move to a single currency in Europe should: significantly decrease the cost of doing business in Europe. With the signing of the ______________ in 1957, the European Community was established. Treaty of Rome The ______________ pact reportedly helped bring about an 80 percent increase in trade between Brazil and Argentina in the 1980s. MERCOSUR The agreement that was designed to abolish within 10 years tariffs on 99 percent of the goods traded between Mexico, Canada, and the United states is called the: North American Free Trade Agreement According to the textbook, in regard to international trade, the theoretical ideal is: an absence of barriers to the free flow of goods, services, and factors of production among nations. The last few years has witnessed an unprecedented proliferation of regional trade agreements. True  For participating countries, a drawback of a single currency in Europe is that: national authorities will lose control over monetary policy. A common market includes all of the following characteristics except: full economic integration. A good word to describe APEC plans and pronouncements is "vague". True In a theoretically ideal common market, labour and capital are free to move, as there are no restrictions on immigration, emigration, or cross-border flows of capital between markets. True  According to the textbook, by entering into _______________, groups of countries aim to reduce trade barriers more rapidly than can be achieved under the WTO . regional agreements Mercosur ran into difficulties in 1998 when _______________. its members slipped into recession. According to our textbook, the first year that NAFTA became a reality turned out to be: a largely positive experience for all three countries. The Andean Pact was formed in 1969 when _____________ signed the Cartagena Agreement. Bolivia, Chile, Ecuador, Colombia, and Peru In the context of regional trade integration, concern about ______________ arise because close economic integration demands that countries give up some degree of their control over such key policy issues as monetary policy, fiscal policy, and trade policy. national sovereignty The European Free Trade Association's emphasis has been on free trade in what area? industrial goods Trade creation occurs when high-cost domestic producers are replaced by low-cost producers within the free trade area. True 
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31 The Andean Pact is a(n) ________________. customs union. An agreement between countries in a geographic region to reduce tariff and non-tariff barriers to the free flow of goods, services, and factors of production between each other is referred to as: regional economic integration. Of the two trade blocks in Europe, the _______________ is by far the more significant, not just in terms of membership, but also in terms of economic and political influence in the world economy European Union The purpose of the ______________ was to have a single market in place by December 31, 1992. Single European Act The phenomenon that occurs when high-cost domestic producers are replaced by low-cost producers within the free trade area is called: trade creation. The European Union effectively became a single market in: 1993. The two main reasons that have made ______________ difficult to achieve are cost and concerns over national sovereignty. economic integration According to your textbook, the _______________, which is playing an even more important role in the EU, has been directly elected by citizens of the EU countries since the late 1970s. European Parliament The implications of the Single European Act are: enormous. An economic union entails even closer economic integration and cooperation than a common market. True  The EU was initially composed of ____________ member states. 15 The Andean Pact was formed in 1969 when Bolivia, Chile, Ecuador, Colombia, and Peru signed the Cartagena Agreement. True Economic theory predicted that Canadian and U.S. producers would soon benefit from __________________. increased consumer demand in Mexico, because of better wages. The European Union is the product of two political factors. The devastation of two world wars on Western Europe and: the European nations' desire to hold their own on the world's political and economic stage. APEC currently has ______________ members including such economic powerhouses as the United States, Japan, and China. 21 In a theoretically ideal _____________, no discriminatory tariffs, quotas, subsidies, or administrative impediments are allowed to distort trade between member nations. Each country, however, is allowed to determine its own trade policies with regard to non-members. free trade area Formed in 1967, ASEAN currently includes: Brunei, Indonesia, Malaysia, Philippines, Singapore, Thailand, and Vietnam. According to the textbook, most attempts to achieve regional economic integration have been what? Contentious and halting On January 1, 1993, the _______________ effectively became a single market with 340 million consumers. European Union The most enduring free trade area in the world is the:
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32 European Free Trade Association. A _____________ will benefit the world only if the amount of trade it creates exceeds the amount it diverts. regional free trade agreement Like the common market, a(n) _______________ involves the free flow of products and factors of production between members and the adoption of a common external trade policy. economic union An economic union involves the free flow of products and factors of production between members and the adoption of a common external trade policy. True  The _____________ was formed in 1969 when Bolivia, Chile, Ecuador, Columbia, and Peru signed the Cartagena Agreement. Andean Pact The term "Fortress Europe" refers to: the perception that the European Union is designed to protect the European continent from the import of foreign produced goods. NAFTA stands for: North American Free Trade Association. Europe now has two trade blocs: the European Union and the European Free Trade Association. True  In 1999, the move toward a _______________ in the EU was given a further push by the adoption of a common currency, _______________, among a majority of the EU's member states. single market; the Euro Which of the following is not an attribute of an economic union? Political union Because many governments have accepted part or all of the case for intervention, unrestricted free trade and FDI have proved to be: only an ideal. The United States, Japan, and China are among 21 members of a trade organization referred to as: APEC (Asia Pacific Economic Cooperation). _____________ occurs when lower-cost external suppliers are replaced by higher-cost suppliers within the free trade area. Trade diversion _____________ occurs when high-cost domestic producers are replaced by low-cost producers. ____________ occurs when lower- cost external suppliers are replaced by higher-cost suppliers within the free trade area. Trade creation; Trade diversion As predicted by the theory of comparative advantage, there should be a ______________ from regional trade agreements. substantial net gain Nowhere has the movement toward regional economic integration been more successful than in _______________. Europe Mexico's concerns about maintaining control of its oil interests resulted in an agreement with Canada and the United States to exempt the Mexican oil industry from any liberalization of foreign investment regulations achieved under NAFTA. This is an example of: a concern of national sovereignty. The work of Christopher Bartlett and Sumantra Ghoshal is associated with: transnational strategy. Value chain activities can be categorized as: primary activities and support activities. There are three major advantages that strategic alliances enjoy. These are (1) may facilitate trade into a foreign market, (2) allows firms to share the fixed costs and developing new products or processes, and (3): an alliance is a way to bring together the complementary skills and assets of the participants
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33 The ____________ refers to the systematic reductions in production costs that have been observed to occur over the life of a product. experience curve After a five-year study of 15 strategic alliances between major multinationals, Gary Hamel, Yves Doz, and C.K. Prahalad concluded that a major determinant of how much a company gains from an alliance is: its ability to learn from alliance partners. A(n) _____________ strategy makes sense when there are strong pressures for cost reductions and where demands for local responsiveness are minimal. global Firms pursuing a(n) ________________ strategy orient themselves towards achieving maximum local responsiveness. multidomestic In the context of value chain analysis, the support activities of a firm include: human resources, materials management, infrastructure, and information systems _________________ agreements are one way to achieve the goal of swapping skills and technologies that each company in a strategic alliance covets, and ensuring a chance for equitable gain. Cross-licensing Skills within the firm that competitors cannot easily match or imitate are referred to as core competencies. Actions that managers take to attain the firm's goals are referred to as _____. strategies. When there are differences in infrastructure and/or traditional practices between countries, pressures for local responsiveness emerge. True  In the context of the value chain analysis, support activities provide the inputs that allow the primary activities of production and marketing to occur. True Firms that operate internationally are able to reduce the costs of value creation because they realize greater cost economies from experience effects by serving an expanded global market from a central location. True Firms use four basic strategies to compete in the international environment. These are: an international strategy, a multidomestic strategy, a global strategy, and a transnational strategy. A firm's __________ can be defined as the actions that managers take to attain the goals of the firm. strategy Which of the following two strategies suffer from a failure to exploit experience curve effects? Multidomestic and international Locating a value creation activity in the optimal location for that activity can have one or two effects. First, it can lower the costs of value creation and help the firm to achieve a low-cost position, and/or: it can enable a firm to differentiate its product offering from that of competitors. According to the textbook, there are three important factors that help to maximizing the benefits of strategic alliances. These are: make allowances for cultural differences, building trust, and learning from partners. Pressures for _____________ emerge when there are differences in infrastructure and/or traditional practices between companies. local responsiveness Cooperative agreements between potential or actual competitors are called: strategic alliances According to our textbook, a firm's ____________ allow it to reduce the costs of value creation and/or to create value in such a way that premium pricing is possible. core competencies
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34 The four safeguards against opportunism by alliance partners include: walling off critical technology, establishing contractual safeguards, agreeing to swap valuable skills and technologies, and _______________. seeking credible commitments. Strategy is often concerned with identifying and taking actions that will lower the costs of value creation and will differentiate the firm's product offering through superior design, quality, service, and functionality. True  Pressures for _______________ imply that it may not be possible for a firm to realize the full benefits from experience curve and location economies. local responsiveness To get down the experience curve rapidly, a firm may need to price and market aggressively so demand will expand rapidly. True  __________________ is a way of further exploiting the value creation potential of a company's skills and product offerings by applying these skills and products in a larger market. Global expansion If Goodyear Tire Corporation experienced systematic reductions in the production costs of a particular product over the life of the product, they would be realizing ____________ effects. experience curve Firms that pursue a(n) _____________ strategy try to create value by transferring valuable skills and products to foreign markets where indigenous competitors lack those skills and products. international A simple example of _______ is rate of return on sales. profitability A basic condition that determines a firm's profits is: the amount of value customers place on the firm's goods. ____________ permitting, the firm will benefit by basing each value creation activity it performs at that location where economic, political, and cultural positions are most conducive to the performance of that activity. Trade barriers and transportation costs The ___________ activities of a firm have to do with creating the product, marketing and delivering the product to buyers, and providing support and after-sales service to the buyers of the product. primary Which of the following is  not   an   advantage  of a strategic alliance? Helps a firm guard its proprietary technology. _________________ the skills created within subsidiaries and applying them to other operations within the firm's global network creates value. Leveraging Suppose General Motors decided to manufacture brakes in Ireland, because a detailed analysis of country specific advantages indicated that Ireland is the optimal place in the world to produce brakes. In this example, General Motors is capturing ____________ by manufacturing brakes in Ireland. location economies Firms pursuing a(n) _________________ strategy orient themselves toward achieving maximum local responsiveness. multidomestic Locating a value creation activity in the optimal location for that activity can lower the costs of value creation and help the firm to achieve a low cost position, and/or enable a firm to differentiate its product offering from the offerings of competitors. True  The term ________________ refers to skills within a firm that competitors cannot easily match. core competencies
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35 Which of the following is not a factor that is driving pressures for local responsiveness among global firms? Similarities in distribution channels. The actions that managers take to attain the goals of the firm are referred to as a firm's strategy. True  The four safeguards against opportunism by alliance partners include: walling off critical technology, establishing contractual safeguards, agreeing to swap valuable skills and technologies, and seeking credible commitments A number of studies have observed that a product's __________ decline by some characteristic each time accumulated output doubles. production costs The term _______________ refers to cooperative agreements between potential or actual competitors. strategic alliance A(n) ________________ strategy makes sense if a firm has a valuable core competence that indigenous competitors in foreign markets lack. international In the context of value chain analysis, which of the following is an example of a "primary" activity? research and development According to Bartlett and Ghoshal, the _______ strategy is the only viable international strategy. transnational The distinguishing feature of _______________ firms is that they extensively customize both their product offerings and their marketing strategy to match national conditions. multidomestic it is useful to think of the firm as a(n) __________ composed of a series of distinct activities, including production, marketing, materials management, R&D, human resources, information systems, and the firm infrastructure. value chain The production, marketing, and R&D activities of firms pursuing a(n) _____________ strategy are concentrated in a few favourable locations. global A business strategy that seeks experience-based economies and location economies, transfers distinctive competencies within the firm, and pays attention to pressures for local responsiveness is a transnational strategy. True  One recent study of 49 international strategic alliances found that _____________ ran into serious managerial and financial troubles within two years of their formation. 2/3 Which of the following is  not  an attribute of a good strategic alliance partner? Must have capabilities identical to its partner. the success of a strategic alliance is a function of three factors. These are: partner selection, alliance structure, and _____________. the manner in which the alliance is managed. One of the principle risks with strategic alliances is: a firm can give away more than it receives In theory, a firm that realizes _______________ by dispersing each of its value creation activities to its optimal location should have a competitive advantage vis-à-vis a firm that bases all its value creation activities at a single location. location economies A weakness of the ________________ strategy is that many of the firms that pursue this strategy have developed into decentralized federations in which each national subsidiary functions in a largely autonomous manner. multidomestic
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36 The appropriateness of the strategy that a firm uses in an international market varies with the extent of pressures for _____________ and ________________. cost reductions; local responsiveness Firms that compete in the global marketplace typically face two types of competitive pressures. They face pressures for cost reductions and: pressures to be locally responsive. Which of the following two international strategies are disadvantaged by a lack of local responsiveness? Global and international In selecting a partner it is important to look for a partner who has capabilities that the firm lacks. True  Harvard Business School Professor Theodore Levitt has argued that consumer demands for local customization are ______________ worldwide. declining Threats of protectionism, economic nationalism, and local content rules: dictate that international businesses manufacture locally. Sally creates _______ when she develops a way to maximize long-term profitability. a strategy According to the textbook, which of the following strategies is difficult to implement due to organizational problems? Transnational A company creates _______ by converting inputs that cost C into a product on which consumers place a value of V. value Economies that arise from performing a value creation activity in the optimal location for that activity are called _____________. location economies When cost pressures are low and pressures for local responsiveness are low, a(n) _____________ strategy is the most appropriate. international Learning effects tend to be more significant when a ____________ task is repeated because there is more than can be learned about the task. technologically complex _____________ refer to cost savings that come from learning by doing. Learning effects Due to organizational problems, a transnational strategy is difficult to implement. True  ______________ is concerned with the creation of goods or service. Production Pressures for cost reductions can be particularly intense in industries producing commodity products where meaningful differentiation on non-price factors is difficult and ____________ is the main competitive weapon. price _____________________ run the range from formal joint ventures to short-term contractual agreements. Strategic alliances Profit can be defined as: the difference between TR and TC Differences in consumer tastes and preferences, differences in infrastructure and traditional practices, differences in distribution channels, and host government demands are factors pressuring firms to ______________ in their international strategies. be locally responsive
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37 Robert Reich and Eric Making have argued that ________________ between U.S. and Japanese firms are part of an implicit Japanese strategy to keep higher-paying, higher-value added jobs in Japan while gaining the project engineering and production process skills that underlie the competitive success of many U.S. companies. strategic alliances Firms that pursue a(n) _______________ strategy focus on increasing profitability by reaping the cost reductions that come from experience curve effects and location economies. global In the context of value chain analysis, ____________ activities allow the primary activities of production and marketing to occur. support A(n) _______________ strategy makes sense if a firm has valuable core competencies that indigenous competitors in foreign markets lack, and if the firm faces relatively weak pressures for local responsiveness and cost reductions. international When cost pressures are low and the pressures for local responsiveness are high a(n) _____ strategy is the most appropriate. multidomestic a firm creates a(n) _____________ by dispersing the stages of its value chain to those locations around the globe where the value added is maximized or where the costs of value creation are minimized. global web If Honda noticed that the unit costs of Honda Accords went down as the number of Accord's produced went up, Honda would be realizing the benefits of _______________. economies of scale In the context of value chain analysis, the primary activities of a firm include: production, marketing & service, and sales. The ability to spread fixed costs over a large volume results in a cost-savings phenomenon referred to as: economies of scale The term _______________ refers to the reduction in unit cost achieved by producing a large volume of a product. economies of scale Moving down the experience curve allows a firm to reduce its cost of: creating value Which of the following is not a typical characteristic of multidomestic firms? Have a low cost structure. Pursuing a(n) _______________ strategy involves a simultaneous focus on reducing costs, transferring skills and products, and being locally responsive. transnational Profit is the difference between total revenues and total costs. True  Among global firms, which of the following is  not  a factor that is driving pressures for local responsiveness? Similarities in consumer tastes and preferences. _______ is the difference between total revenues and total costs. Profit Firms pursuing a multidomestic strategy orient themselves toward achieving maximum local responsiveness. True  McDonald's core competencies are: managing fast-food operations In the opening case, what is important to IKEA's global success? Local customization.
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38 _______________ has the following advantages: firms benefit from a local partner's knowledge of the host country's competitive conditions, a firm shares development costs with a local partner, and in many countries political considerations necessitate this form of entry. Joint venture ______________ is basically a specialized form of licensing in which the franchiser not only sells intangible property to the franchisee, but also insists that the franchisee agree to abide by strict rules as to how it does business. Franchising The greater the pressures for cost reductions are, the most likely a firm will want to pursue some combination of: exporting and wholly owned subsidiaries. What are the disadvantages associated with entering a market early commonly known as? First-mover disadvantages Acquisitions often produce disappointing results, despite the argument for making them. True  The foundation of franchising arrangements is that the firm's ______________ conveys a message to consumers about the quality of the firm's product. brand name Which foreign market entry strategy has the following disadvantages: lack of long-term market presence, may inadvertently create a competitor, risk of selling a firm's competitive advantage? Turnkey project The market entry mode which may help a firm achieve experience curve and location economics is what? Exporting An advantage of acquisitions is ______________. the ability to pre-empt competitors. Distinct advantages of _______________ are low development costs and risks. franchising and licensing The choice of what foreign markets to enter should be driven by an assessment of relative long-run growth and profit potential. True  Whereas primarily ________________ firms pursue licensing, primarily ____________ firms pursue franchising. manufacturing; service _______________ is preferred to joint venture arrangements and to using foreign market agents. Wholly owned subsidiary Lack of control over quality and the inability to engage in global strategic coordination are distinct disadvantages of ___________. franchising. Which of the following is  not  an argument in favour of licensing as a means of foreign market entry? The firm wants to maintain tight control over the marketing The choice of what foreign market to enter should be driven by an assessment of: relative long-run growth and profit potential. Protection of technology, the ability to engage in global strategic coordination and the ability to realize location and experience economies are distinct advantages of ______________. wholly owned subsidiary. Under a(n) _____________ agreement, a firm might license some valuable intangible property to a foreign partner, but in addition to a royalty payment, the firm might also request that the foreign partner license some of its valuable know-how to the firm. cross-licensing What type of entry allows a firm to learn about a foreign market while limiting the firm's exposure to that market? Small-scale
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39 Acquisitions are quick to execute. True The most typical joint venture is: 50/50, in which there are two partners and each partner holds an equal share. Other than licensing, the form of foreign market entry that results in a firm in the host country paying a royalty to the firm that has the rights to a product or service is called _____________. franchising. Suppose Exxon, a U.S. company, was contracted by a Saudi Arabian company to build an oil refinery in Saudi Arabia, and the contract specified that Mobil would handle every aspect of the construction of the refinery, including the training of the operating personnel. This type of project is referred to as a(n) turnkey project. Strategic commitments tend to change the competitive playing field. True  Why are wholly owned subsidiaries preferred by firms pursuing global or transnational strategies? They allow the use of profits generated in one market and improve the competitive position in another. The need for pre-emption is particularly great in markets that are what? Rapidly globalizing Which of the following are the two distinct advantages of exporting? It avoids the often-substantial cost of establishing manufacturing operations in the host country; and it may help a firm achieve experience curve and location economies. Creating efficient competitors and lack of long-term market presence are disadvantages of ______________. turnkey projects. If two companies established a jointly owned entity for the purpose of building computers to export to Asia, that would be an example of a ___________________ form of foreign market entry. joint venture Sonic Jets, an international business, is considering entering a new market in Germany. What does Sonic Jets need to consider? Its scale of entry. XYZ, Inc, a Canadian company, has chosen to establish a wholly owned subsidiary in Mexico. It has the choice of acquiring an established company in Mexico or: build a greenfield venture. A _____________ entails establishment of a firm that is jointly owned by two or more otherwise independent firms. joint venture Which of the following is  not  a first-mover advantage? The ability to increase a firm's chances of survival by entering a foreign market before industrial rivals. Consider the following scenario: Ballard Manufacturing wants to sell its products overseas, but only if it can act on its own and manufacturer its product in a central location. Based on these objectives, the appropriate foreign entry mode for Ballard is: exporting. Suppose Boeing decided to build an assembly plant in Iceland and, in an effort to maintain maximum control, decided to operate the plant completely on its own. This is an approach to foreign market entry referred to as: wholly owned subsidiary. Overpayment for assets of an acquired firm is one reason acquisitions fail. True  Which of the following are costs that an early entrant has to bear that a later entrant can avoid? Pioneering costs
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40 _______________ is the preferred mode of foreign market entry for a high-tech firms that wants to (1) minimize the risk of losing control over its technological competence; and (2) maintain tight control over its operations. Wholly owned subsidiary A primary advantage of franchising is low development costs and risks. True  Turnkey projects are most common in the following industries: chemical, pharmaceutical, petroleum refining, and metal refining. If a firm is entering a market where there is already well-established incumbent enterprises, and where global competitors are also interested in establishing a presence, it may pay the firm to enter via a(n) : acquisition. In a _____________, the firm owns 100 percent of the stock. wholly owned subsidiary The sharing of development costs and risks is a primary advantage of joint ventures. True  The big advantage of establishing a(n) _______ in a foreign country is that it gives the firm a much greater ability to build the kind of subsidiary company that it wants. greenfield venture By licensing its technology to competitors, the firm may deter them from developing their own, possibly superior technology. True  According to the text, __________________ tend to change the competitive playing field and unleash a number of changes, some desirable and some undesirable. significant strategic commitments _______ takes advantage of a firm's competency in the area of assembling and running technologically complex projects. Turnkey projects An arrangement whereby a firm grants the rights to intangible property to another entity for a specified time period in exchange for royalties is a(n) _______________ agreement. licensing A decision that has a long-term impact and is difficult to reverse a(n) : strategic commitment. The ______________ entrant is more likely than the ________________ entrant to be able to capture the first-mover advantages associated with demand pre-emption, scale economies, and switching costs. large scale; small scale Turnkey projects are a means of exporting ____________ to other countries. process technology Suppose Apple Computer granted a France company the rights to manufacture keyboards in France in exchange for a royalty fee. This type of arrangement is referred to as a: licensing agreement. If Pepsi and a Turkish firm established a jointly owned entity for the purpose of bottling soft drinks in Turkey, that would be an example of a: joint venture. Suzi's Sleds, Inc. is considering entering Japan, where there are no other incumbent competitors to acquire. Suzi's would do best in Japan with a(n): greenfield venture. Pioneering costs are costs that an early entrant has to bear that a later entrant can avoid. True
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41 What type of agreements enable firms to hold each other hostage, which reduces the probability that they will behave opportunistically toward each other? Cross-licensing According to the opening case, Starbucks first global market was what? Japan The advantages frequently associated with entering a market early are commonly known as: first-mover advantages. Establishing a wholly owned subsidiary in a foreign country can be done: through setting up a new operation in a foreign country or through acquiring an established firm to promote its products. Most manufacturing firms begin their global expansion through ______. exporting One of the primary advantages of a wholly owned subsidiary is that it gives the firm tight control over operations in different countries that are necessary for engaging in global strategic coordination. True  Many service firms favour a combination of franchising and ______ to control the franchises within a particular country or regions. subsidiaries _______________ costs arise when the business system in a foreign country is so different from that in a firm's home market that the enterprise has to devote considerable effort, time, and expanse to learning the rules of the game. Pioneering Franchising is employed primarily by service firms, whereas licensing is pursued primarily by manufacturing firms. True  Which of the following is a disadvantage of joint ventures? The shared ownership arrangement can lead to conflicts and battles for control between the investing firms if their goals and objectives change or if they take different views as to what the strategy should be. The Mercer Study concluded that _______ percent of the 150 acquisitions studied ended up eroded or substantially shareholder value. 50 Many Canadian companies are leery of forming equity joint ventures with China because of: changing regulations. issues around currency convertibility. lack of skilled labour. poor quality raw materials. all of these answers are correct. Which of the following is  not  a reason why acquisitions fail? Underpayment for assets of the acquired firm. If a firm's competitive advantage is based on control over proprietary technological know- how, which of the following foreign entry modes should be avoided? Joint ventures and licensing A joint venture entails establishment of a firm that is jointly owned by two or more otherwise independent companies. True  One advantage to exporting is that it avoids the costs of establishing manufacturing operations in the host country. True  Quality control is one of the most significant disadvantages of franchising. True  All of the following are pioneering costs  except  the costs of: learning costs from the mistakes of early entrants.
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42 The contractor agrees to handle every detail of the project for a foreign client, including the training of operating personnel in a(n) _____________ project. turnkey Once attractive markets have been identified, it is important to consider the: timing of entry. Entering a large market such as China before other similar industries will be associated with what? A high level of risk Which of the following is not a mode to enter foreign markets? Establish joint ventures with another home country firm Ravenscraft and Scherer concluded in their study that many good companies were acquired between January 1990 and July 1995, and on average, their profits and market shares _______ following the acquisition. declined Daimler-Benz used ______________ to establish a bigger presence in the North American market. an acquisition A contractor agrees to handle every detail of the project for a foreign client, including the training of operating personnel in a turnkey project. True  Which of the following statements is true? Greenfield venture are more risky than acquisitions. The most advantageous entry mode is ______________, if a high-tech firm sets up operations in a foreign country to profit from a core competency in technological know-how. wholly owned subsidiary Which of the following is not an advantage of acquisitions? They are the least expensive form of expansion. What is the most costly form of foreign market entry? Wholly owned subsidiary An act, as simple as shaking hands when meeting new people is an example of practicing: norms. Countries that let inequalities grow over time into inequalities of power and wealth were considered to have: high power distance. A __________ system is a closed system of stratification in which social position is determined by the family into which a person is born, and change in that position is usually not possible during an individual's lifetime. caste The language of international business is increasingly becoming: English. Which of the following refers to the extent to which individuals can move out of the strata into which they are born? Social mobility Class consciousness refers to a condition where people tend to perceive themselves in terms of their class background, and this shapes their relationships with members of other classes. True  The largest faith based group in Canada is ____________. Christianity. Hofstede's __________ dimension focused on the relationship between the individual and his or her followers. individualism versus collectivism
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43 The high level of entrepreneurial activity in Canada and the United States can be attributed in part to the high level of emphasis placed on the __________ in North American society. individual __________ was founded in India in the sixth century BC by Siddhartha Gautama, an Indian prince who renounced his wealth to pursue an ascetic lifestyle and spiritual perfection. Buddhism Which of the following religions prohibits the payment or receipt of interest? Islam The importance attached to _______ is a central value of the Japanese culture. group membership One economic principle of __________ that has received particular attention is the prohibition of the payment or receipt of interest, which is considered usury. Islam The Koran __________ of free enterprise and of earning legitimate profit through trade and commerce. speaks approvingly With estimates of about 1.7 billion adherents, __________ is the second largest of the world's major religions. Islam All societies are stratified on a hierarchical basis into social categories, or: social strata The most rigid system of stratification is a(n) __________ system. caste In 1904, a German sociologist, __________, made a connection between Protestant ethics and "the spirit of capitalism." Max Weber Nation states: are political creations that can contain one or several cultures. The vast majority of Christians live in: Europe and the Americas. The most able individuals in a business organization may find their route to the higher levels of the organization blocked simply because they come from lower castes, under the teachings of __________. Hinduism. __________ believe there is a moral force in society that requires the acceptance of certain responsibilities, called  dharma . Hindus Buddhists are found primarily in the following areas: Central and Southeast Asia, China, Korea, and Japan. Central to the __________ system of ethics are the values of loyalty, reciprocal obligations, and honesty. Confucian A __________ is an abstract idea about what a group believes to be good, right, and desirable. value In a family, individuals interact together to create a sense of identity and character. A family would be an example of: a group. Cultures many change due to what? Economic progress A strong need for rules and regulations, with a premium of job security, career patterns, and retirement benefits, would best describe a culture with: high uncertainty avoidance.
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44 _______ are the two central components of culture. Values and norms A group of people who share a common set of values and norms is known as what? Society A focus on the "individual" rather than the "group" is evident in many __________ cultures. Western A __________ is a system of values and norms that are shared among a group of people and that when taken together constitute a culture The primacy of the value of group identification discourages managers and workers from moving from company to company. True  According to Max Weber, the ascetic principles embedded in Hinduism do not encourage the kind of entrepreneurial activity found in Protestantism. True  Historically, British society has been divided into three main classes: the upper class, the middle class, and the working class. According to Hofstede's Model, what country stands out as having a culture with strong uncertainty avoidance and high masculinity? Japan _______ is not one of the major principles of Islam. Being pretentious Which of Hofstede's dimensions looked at the relationship between gender and work roles? Masculinity versus femininity Two dimensions are particularly important when explaining differences between cultures—the degree to which the basic unit of social organizations is the individual, as opposed to the group; and the degree to which a society is stratified into classes. True Individuals born into a _______________ at the bottom of the hierarchy can work their way up, while individuals at the top can work their way down. class system According to Hofstede's Model, which group of nations score high on the individualism scale and low on the power distance scale? Advanced western nations such as the United States, Canada, and Britain. As long as international business __________, Islamic countries are likely to be receptive to those businesses. behave in a manner that is consistent with Islamic ethics Which of the following is an association of two or more individuals who have a shared sense of identity and who interact with each other in structured ways on the basis of a common set of expectations about each other's behaviour? Group Nonverbal communication is referred to as unspoken language. True  Folkways are a form of __________. norms A society refers to a group of people who share a common set of values and norms. True  According to Hofstede, high power distance cultures are found in countries that let inequalities grow over time into inequalities of power and wealth. True  The system of shared beliefs and rituals that are concerned with the realm of the sacred is referred to as __________.
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45 religion. The prohibition of the payment or receipt of interest is one economic principle of Islam that has received particular attention. True  __________ systems refer to a set of moral principles, or values, that are used to guide and shape behaviour. Ethical Individuals that following the teaching of Confucius are found primarily in: China, South Korea, and Japan. A caste system is a rigid system of: social mobility. According to the opening case: Expansion into China is not easy. The country in which the Islamic fundamentalists have been the most successful is _______. Iran. In his studies, Hofstede isolated four dimensions that he claimed summarized different cultures. These were: power distance, individualism versus collectivism, uncertainty avoidance, and masculinity versus femininity. Canada's masculinity rating is 52 as compared to Japan's which is 95. This means that Canada ___________________ than Japan. is more liberated and sex roles are not as sharply defined Appropriate dress code, good social manners, eating with the correct utensils, and neighbourly behaviour are all examples of: folkways. A form of __________ in which the position a person has by birth can be changed through his or her own achievements or luck is a class system. open stratification __________ are social conventions concerning things such as the appropriate dress code in a particular situation, good social manners, eating with the correct utensils, neighbourly behaviour, and the like. Folkways Folkways are the routine conventions of everyday life. True  Which of the following principles is not consistent with the teachings of the Koran? Earning profit through the exploitation of others. The _________ in Canada is less extreme than in Britain and mobility is greater. class system Culture changes over time. True  __________ has approximately 1.1 billion adherents, most of them in the Indian subcontinent. Hinduism Norms that are central to the functioning of a society and to its social life are called mores. True  A form of _______________ has been played out in British society in the traditional hostility between-upper-middle class managers and their working class employees. class consciousness Unspoken language is referred to as: nonverbal communication. The closing case shows how Dubai's World Expo 2020 is showing the link between cultural values and pioneering new ideas True 
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46 The most widely practiced religion in the world, according to the textbook, is probably __________. Christianity. _______ are the two major categories of norms. Folkways and mores while groups are found in all societies, societies differ according to the degree to which the group is viewed as: the primary means of social organization. Which attitude according Hofstede, is not captured by Confucian dynamism? Personal initiative Geert Hofstede isolated five dimensions that he claimed summarized different cultures. _______ is not one of Hofstede's dimensions. Capitalistic versus socialistic In 1904, Max Weber, a German sociologist, made a connection between Protestant ethics and "the spirit of __________." capitalism. Hofstede's __________ dimension measured the extent to which different cultures socialized their members into accepting ambiguous situations. uncertainty avoidance Who lives in a social structure that is shaped by Islamic values and norms of moral conduct? Muslim In contrast to the Western emphasis on the __________, in many other societies the __________ is the primary unit of social organization. individual; group Based on recent trends in international business, when Japanese and German businesspeople get together to do business, it is almost certain that they will communicate in: English. The "mother tongue" of the most number of people in the world is: Chinese. Which of the following are social rules and guidelines that prescribe appropriate behaviour in particular situations? Norms Which of Hofstede's dimensions focuses on how a society deals with the fact that people are unequal in physical and intellectual capabilities? Power distance Most of the world's ethical systems are the product of: religion. What is the world's oldest major religion? Hinduism What type of consciousness refers to a condition where people perceive themselves in terms of their class background, and this shapes their relationships with members of other classes? Class The terms dharma, karma, and nirvana are associated with the __________ religion. Hindu The most famous study of how culture relates to values in the workplace was undertaken by: Geert Hofstede. Because Buddhists, like Hindus, stress spiritual achievement rather than involvement in the world, the emphasis on wealth creation that is embedded in Protestantism is not found in Buddhism. Thus, in Buddhist societies we do not see the same kind of cultural stress on entrepreneurial behaviour that we see in the Protestant West. True
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47 The class system in __________ is less extreme than in ___________ and mobility is greater. The United States; Great Britain Religion is a system of shared beliefs and rituals that are concerned with the realm of the sacred. True  The most famous study of how culture relates to values in the workplace was undertaken by Geert Hofstede. True  Islam is the second largest of the world's major religions, with about 1.7 billion adherents. True  _______ form(s) the bedrock of culture. Values The relationship between religion and ethical systems on the one hand and business practice on the other is probably: _____________. small compared to the impact of economic policy. Although the number of societies with caste systems has diminished rapidly during the 20 th  century, one major example still remains. India. A group is an association of two or more individuals who have a shared sense of identity and who interact with each other in structured ways on the basis of a common set of expectations about each other's behaviour. True  __________ was the official ethical system of China for more than 2,000 years until the 1949 Communist revolution. Confucianism Although there are many different aspects of social structure, two main dimensions--_______--stand out when explaining differences between cultures. the degree to which the basic unit of social organization is the individual; and the degree to which a society is stratified into classes or castes A system of values and norms that are shared among a group of people and that when taken together constitute a design for living is referred to as culture. True  According to your text, Islam dates back to: 610 A.D. Max Weber argued that the ___ promise of salvation in the next world, rather than this world, did not foster the same work ethic as Protestantism. Catholic The religion that is built around a comprehensive ethical code that establishes guidelines for relationships with others is called _______. Confucianism. __________ defined culture as "the collective programming of the mind which distinguishes the members of one human group from another." Geert Hofstede A __________ is a group of people who share a common set of values and norms. society A society's _________ refers to its basic social organization. "social structure" While there are thousands of different religions in the world, the four that are the largest are: Christianity, Islam, Hinduism, and Buddhism. __________ are norms that are central to the functioning of a society and to its social life. Mores
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48 Beth Green, a manager at Beth's Poutine Corporation, believes in empowerment, upward mobility and motivating her employees. This describes her __________. values. The past two decades have witnessed a growth of a social movement often referred to as "Islamic fundamentalism." True A(n) ______________ staffing policy requires host country nationals to be recruited to manage subsidiaries, while parent company nationals occupy key positions at corporate headquarters. polycentric A(n) ____________ is extra pay the expatriate receives for working outside his or her country of origin. foreign service premium The _____________ function of an international business is typically responsible for international labour relations. human resource management The type of training that is aimed at helping an expatriate manager and his or her family ease themselves into day-to-day life in the host country is called ______________. practical training. Beth's behavioural style, beliefs, and value system are consistent with that of the company that she works for and is said to be compatible with her company's what? Corporate culture In the context of international labour relations, what does the acronym ITS stands for? International Trade Secretariats Organized labour has responded to the increased bargaining power of multinational corporations by taking which of the following actions? Trying to achieve international regulations on multinationals through such organizations as the United Nations. What four dimensions seem to predict success in expatriate selection were identified by Mendenhall and Oddou? Self-orientation, others-orientation, perceptual ability, and cultural toughness. In most cases, which two groups evaluate the performance of expatriate managers? Home country managers and host country managers. According to Mendenhall and Oddou, the attribute of _____________ provides an expatriate the ability to understand why people of other countries behave the way they do, that is, the ability to empathize with them. perceptual ability The strategy that is most compatible with an ethnocentric staffing policy is what? International strategy According to the textbook, in practice, the International Trade Secretariats have had ______. virtually no success. The type of training that seeks to foster an appreciation for the host country's culture is called what? Cultural training Organized labour has responded to the increased bargaining power of multinational corporations by taking three actions: trying to establish international labour organizations, lobbying for national legislation to restrict multinationals, and trying to create controlled regional labour boards. A(n) ______________ approach to staffing has the following advantages: (1) overcomes lack of qualified managers in host nation, (2) unified culture, and (3) helps transfer core competencies. ethnocentric If you were transferred abroad and didn't like interacting those in the host country and didn't know the local language, this might mean that you lacked attributes of Mendenhall and Oddou's _______________ dimension. others-orientation
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49 Research has identified three types of staffing policies in international businesses: (1) the ethnocentric approach, (2) the polycentric approach, and (3) the ________________. geocentric approach. In a recent survey, almost ________________ of employees sent to developing nations return home early. 70 percent According to Mendenhall and Oddou, the attribute of _________________ enhances the expatriate's ability to interact effectively with host country nationals. others-orientation Relationship development and willingness to communicate are the two factors that are particularly important in developing a health degree of what? Others-orientation How is total compensation calculated? salary + bonus + benefits One estimate of the costs of expatriate failure is that the average cost per failure to the parent company can be as high as __________________ time the expatriate's annual domestic salary plus the cost of relocation. 3 There are two reasons that the ethnocentric staffing policy is on the wane in most international businesses. These are: an ethnocentric staffing policy limits advancement opportunities for host country nationals and an ethnocentric policy can lead to "cultural myopia". A reason  not  to pursue an ethnocentric staffing policy is what? the firm may believe there is a lack of qualified individuals in its own parent company to fill senior management positions Guardian Smitz is an expatriate working in the Philippines. As an expatriate, Guardian incurs an extra pay incentive for working outside his country. This extra pay incentive is called a(n)_______allowance. foreign service premium. Cultural training seeks to foster an appreciation for the host country's culture. True  According to a study by R.L. Tung, the number one reason for expatriate failure among U.S. multinationals is the inability of the expatriate manager's spouse to adjust. True According to the results of a study by R.L. Tung, what indicated that the most consistent reason cited by European expatriates for expatriate failure among their group? The inability of the manager's spouse to adjust to a new environment One task of the _____________ function is to foster harmony and minimize conflict between the firm and organized labour. human resource management Which of the following strategies is most compatible with a polycentric staffing policy? Multidomestic strategy According to one study, what percent of repatriated employees didn't know what their position would be when they returned home? 60-70 Adam Cowgill works for Dell Computer (a U.S. based firm) but is assigned to Dell's sales office in Germany. Under these circumstances, Mr. Cowgill would be called a(n) _____ manager. expatriate ________________ is the premature return of an expatriate manager to his of her home country. Expatriate failure A(n) _____ program is intended to develop a manager's skills over his or her career with a firm. management development Which of the following was  not  identified by R.L. Tung as a reason for expatriate failure among U.S. expatriate managers?
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50 Poor pay A(n) _____________ approach to staffing has the following disadvantages: (1) produces resentment in host country, (2) can lead to cultural myopia. ethnocentric The activities an organization carries out to utilize its ____________ effectively is referred to as human resource management. employees The activities which include determining the firm's human resource strategy, staffing, performance evaluation, management development, compensation, and labour relations are referred to as what? Human resource management A polycentric staffing policy is appropriate for a firm following a multidomestic strategy. True  Mendenhall and Oddou identified four dimensions that seem to predict success in foreign postings: self-orientation, others-orientation, perceptual ability, and cultural toughness. True  There is unintentional bias in the performance evaluation of expatriate managers. True  From a strategic perspective, the key issue in international labour relations is ______________. the degree to which organized labour can limit the choices of an international business. In the Dutch firm Philips, all important positions in most foreign subsidiaries were at one time held by Dutch nationals who were referred to by their non-Dutch colleagues as the Dutch Mafia. This example illustrates a(n)__________. ethnocentric staffing policy. Unless a host country has _____________ with the expatriate's home country, the expatriate may have to pay income tax to both the home and host country governments. a reciprocal tax treaty What is the main difference between international businesses in terms of their approaches to international labour relations? The degree to which labour relations activities are centralized or decentralized. Substantial differences exist in the compensation of executives at the same level in various countries. True  ______ is concerned with the selection of employees for particular jobs. Staffing policy A(n) __________ manager is a citizen of one country who is working abroad in one of his or her firm's subsidiaries. expatriate The four strategies pursued by international businesses are the multi domestic, the international, the global, and the transnational. True  According to Mendenhall and Oddou, what refers to the fact of how well an expatriate adjusts to a particular posting as it relates to the country of assignment? Cultural toughness What approach to staffing has the following advantages: (1) uses human resources effectively, (2) helps build strong culture and informal management network? Geocentric A person who is an expatriate with good mental well-being, high self-esteem, and high self-confidence is successful in what dimension? Self-orientation According to the results of a study of R.L. Tung, the number one reason that Japanese expatriate managers fail is: inability to cope with larger overseas responsibilities. A citizen of one country who is working abroad in one of the firm's subsidiaries is an expatriate manager.
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51 True Many Japanese firms prefer their foreign operations to be headed by expatriate Japanese managers because these managers will have socialized into the firm's culture while employed in Japan. This is an example of _______________. ethnocentricity. General Electric is not just concerned with hiring people who have the skills required for performing particular jobs; it wants individuals whose behavioural styles, beliefs, and value systems are consistent with those of GE. This would be an example of what? Corporate culture A(n) ______________ approach to staffing has the following disadvantages: (1) limits career mobility, (2) isolates headquarters from foreign subsidiaries. polycentric HRM refers to what? Human Resource Management One of the lessons from the opening case is what? Diversity is a pressing issue in HRM. A(n) ______ staffing policy is one in which all key management positions are filled by parent company nationals. ethnocentric Which of the following describes the most important reason why American expatriates fail? Inability of spouse to adjust. The ethnocentric approach, the polycentric approach, and the geocentric approach are three types of staffing policies in international businesses research has identified. True  In the 1960s organized labour began to establish a number of __________ to provide worldwide links for national unions. International Trade Secretariats In regard to the types of allowa nce policy is concerned with the selection of employees for particular jobs. hardship A(n) ______ approach to staffing has the following advantages: (1) alleviates cultural myopia, (2) inexpensive to implement. polycentric "Cultural Myopia" refers to the firm's failure to: understand host-country cultural differences that require different approaches to marketing and management. A(n) __________ is a response to the shortcomings of an ethnocentric approach. polycentric staffing policy When evaluating the performance of an expatriate manager, home-country managers tend to rely on what? Hard data The components of the typical expatriate compensation package are a base salary, a foreign service premium, allowances of various types, tax differentials, and benefits. True  Philip Thomas is a manager for XYZ International Inc. Philip's job requires him to deal with the differences in equal employment legislations between each country. Philip could be considered to be a(n) : human resource manager. Some of the reasons that may bias the home country managers' appraisals of expatriate managers are: distance and lack of experience working abroad. According to the textbook, what staffing policy has the advantage of having firms that are less likely to suffer from cultural myopia? Polycentric Unions generally try to get better pay, greater job security, and better working conditions for their members through _____________ with management.
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52 collective bargaining One of the main reasons why managers turn down international assignments is concern over the impact of the assignment on their spouse's career. True  An important goal in management development programs is to: build a unifying culture. Which of the following two strategies are most compatible with a geocentric staffing policy? Global and transnational The term corporate culture refers to an organization's ________. norms and value systems. In regard to expatriate pay, the balance sheet approach accomplishes two objectives. These are: equalizes purchasing power across countries so employees can enjoy the same living standard in their foreign posting that they enjoyed at home, and provides financial incentives to offset qualitative differences between assignment locations. Human resource management refers to the activities an organization carries out to utilize its human resources effectively. True  What two of the three common international staffing policies rely on extensive use of expatriate managers? Ethnocentric, geocentric According to Mendenhall and Oddou, the attribute of _____________ strengthens an expatriate's self-esteem, self-confidence, and mental well-being. self-orientation The form of compensation that compensates an expatriate for having to live in an unfamiliar country isolated from family and friends is referred to as a(n)_________. foreign service premium. In regard to expatriate pay, the _______________ equalizes purchasing power across countries so employees can enjoy the same living standard in their foreign posting that they enjoyed at home. balance sheet approach Staffing policy can be a tool for developing and promoting corporate culture. True  A(n) ____________ staffing policy seeks the best people for key jobs throughout the organization. geocentric Compensation practices may vary from country to country, labour laws prohibiting union organization, and the strong pursuit of equal employment legislation are all complexities in: human resources. According to Mendenhall and Oddou, expatriate managers who lack _____________ tend to treat foreign nationals as if they were home country nationals. perceptual ability Recent research suggests that a main reason managers now turn down international assignments is concern over what? The impact of such an assignment might have on their spouse's career. What is the most common approach to expatriate pay? Balance sheet approach Which of the following is  not  an advantage of a geocentric approach to staffing for international businesses? Inexpensive to implement. What does a firm typically do when a reciprocal tax treaty is not in force? Pays the expatriate's income tax in the host country.
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53 A housing allowance is normally given to ensure that the expatriate can afford the same quality of housing in the foreign country as at home. In locations where housing is very expensive, this allowance can be substantial as much as ______ percent. 30 What trend has contributed to spousal discontent in foreign postings? The rise in two career families. ______________ percent of U.S. multinationals experience expatriate failure rates of 10 percent or more, according to a study conducted by R.L. Tung. 76 The ability of a female western manager to adapt to a culture that is extremely male dominated is an example of what? Cultural toughness Which compensation approach attempts to provide expatriates with the same standard of living in their host countries as they enjoy at home plus a financial inducement for accepting an overseas assignment? Balance sheet approach Unless a host country has a reciprocal tax treaty with the expatriate's home country, the expatriate may have to pay income tax to both the home and the host country governments. True  _________________ is a subset of expatriates who are citizens of a foreign country working in the home country of their multinational employer. Inpatriates What are the four types of allowances that are often included in an expatriate's compensation package? Hardship allowances, housing allowances, cost-of-living allowances, and education allowances A principle concern of domestic unions about multinational firms it that the multinational can counter their bargaining power with ______ the power to move production to another country. In regard to the types of allowances often included in an expatriate's compensation package, a(n) ______________ allowance is often paid to ensure that the expatriate will enjoy the same standard of living in the foreign posting as at home. cost-of-living In regard to the types of allowances often included in an expatriate's compensation package, a(n) ____________ allowance is paid when the expatriate is being sent to a difficult location. hardship
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