IBUS 201 EXAM QUESTIONS WITH ACCURATE ANSWERS
Absolute Advantage theory (Classical Theory of Trade) correct answer a firm has a
absolute advantage of a product/service if they perform at a greater efficiency
than their direct competitors
A country should never produce in their home country, if the product can be
produced cheaper and more efficient overseas
Bloc correct answer a group of countries or political parties with common
interests who have formed an alliance.
Common misconceptions about globalisation (MNC's) correct answer MNCs have
far-flung operations and earn most of their revenues overseas.
MNCs are globally monolithic and excessively powerful in political terms.
MNCs develop homogeneous products for the world market and through their
efficient production techniques are able to dominate local markets elsewhere
Comparative Advantage theory (Classical Theory of Trade) correct answer
Countries having no absolute advantages or having the advantage in all goods still
can/should trade.
"Countries should specialise in the production of goods and services they can
produce relatively more efficiently"
Corporate Social Responsibility (CSR) correct answer A manner of operating a
business that meets or exceeds the ethical, legal, commercial and public
expectations of stakeholders
Society grants legitimacy and power to a business. In the long run, those who do
not use power in a manner which society considers responsible will tend to lose it
,Countries can be difficult to evaluate through a certain set of challenges: correct
answer - Limited availability and reliability of (official) data.
- Market research can be very costly and less precise when compared to the
advanced economies.
- Uneven distribution of wealth [income inequality may hurt economy]
- Lack of transparency in household income
Country classification by wealth correct answer - Advanced economies: Post-
industrial countries with high per capita income, competitive industries, and
developed commercial infrastructure; typically the richest countries, e.g. the
United States, Canada, nations of Western Europe, Australia, New Zealand, Japan
etc. 14% of countries
- Developing economies: Low-income countries characterised by limited
industrialisation and stagnant economies; e.g., Bangladesh, Bolivia, and Zaire.
24% of countries
- Emerging market economies: Former developing economies that achieved
substantial industrialisation, modernisation, and remarkable economic growth;
e.g., China, India, Vietnam, Mexico, Poland, and Turkey. 62% of countries
Criteria for assessing the attractiveness of emerging markets and developing
economies include: correct answer - Market size
- Market growth rate
- Market consumption capacity (use middle class as indicator; government order)
- Commercial infrastructure (institutions again!)
- Economic freedom
, Dimensions to international strategy correct answer Global integration
- Coordination of the firm's value-chain activities across multiple countries to
achieve worldwide efficiency, synergy, and cross-fertilisation in order to take
advantage of similarities between countries.
- Firms that emphasise global integration
- Make and sell standardised products, and services to capitalise on converging
customer needs and tastes
- Compete on a regional or worldwide basis
- Minimise operation costs by centralising value-chain activities and emphasising
scale economies
Local responsiveness
- Meeting the specific needs of buyers in individual countries
- It requires firms to adapt to customer needs and to the competitive
environment
- Local managers are entitled more freedom to adjust offerings, marketing, and
practices to suit local conditions
Organisational structure
- The reporting relationships inside the firm, the 'boxes and lines' that specify the
linkages among people, functions, and processes, that allow the firm to carry out
its operations
- It can be fairly comprehensive in large organisations, or MNCs
Absolute Advantage theory (Classical Theory of Trade) correct answer a firm has a
absolute advantage of a product/service if they perform at a greater efficiency
than their direct competitors
A country should never produce in their home country, if the product can be
produced cheaper and more efficient overseas
Bloc correct answer a group of countries or political parties with common
interests who have formed an alliance.
Common misconceptions about globalisation (MNC's) correct answer MNCs have
far-flung operations and earn most of their revenues overseas.
MNCs are globally monolithic and excessively powerful in political terms.
MNCs develop homogeneous products for the world market and through their
efficient production techniques are able to dominate local markets elsewhere
Comparative Advantage theory (Classical Theory of Trade) correct answer
Countries having no absolute advantages or having the advantage in all goods still
can/should trade.
"Countries should specialise in the production of goods and services they can
produce relatively more efficiently"
Corporate Social Responsibility (CSR) correct answer A manner of operating a
business that meets or exceeds the ethical, legal, commercial and public
expectations of stakeholders
Society grants legitimacy and power to a business. In the long run, those who do
not use power in a manner which society considers responsible will tend to lose it
,Countries can be difficult to evaluate through a certain set of challenges: correct
answer - Limited availability and reliability of (official) data.
- Market research can be very costly and less precise when compared to the
advanced economies.
- Uneven distribution of wealth [income inequality may hurt economy]
- Lack of transparency in household income
Country classification by wealth correct answer - Advanced economies: Post-
industrial countries with high per capita income, competitive industries, and
developed commercial infrastructure; typically the richest countries, e.g. the
United States, Canada, nations of Western Europe, Australia, New Zealand, Japan
etc. 14% of countries
- Developing economies: Low-income countries characterised by limited
industrialisation and stagnant economies; e.g., Bangladesh, Bolivia, and Zaire.
24% of countries
- Emerging market economies: Former developing economies that achieved
substantial industrialisation, modernisation, and remarkable economic growth;
e.g., China, India, Vietnam, Mexico, Poland, and Turkey. 62% of countries
Criteria for assessing the attractiveness of emerging markets and developing
economies include: correct answer - Market size
- Market growth rate
- Market consumption capacity (use middle class as indicator; government order)
- Commercial infrastructure (institutions again!)
- Economic freedom
, Dimensions to international strategy correct answer Global integration
- Coordination of the firm's value-chain activities across multiple countries to
achieve worldwide efficiency, synergy, and cross-fertilisation in order to take
advantage of similarities between countries.
- Firms that emphasise global integration
- Make and sell standardised products, and services to capitalise on converging
customer needs and tastes
- Compete on a regional or worldwide basis
- Minimise operation costs by centralising value-chain activities and emphasising
scale economies
Local responsiveness
- Meeting the specific needs of buyers in individual countries
- It requires firms to adapt to customer needs and to the competitive
environment
- Local managers are entitled more freedom to adjust offerings, marketing, and
practices to suit local conditions
Organisational structure
- The reporting relationships inside the firm, the 'boxes and lines' that specify the
linkages among people, functions, and processes, that allow the firm to carry out
its operations
- It can be fairly comprehensive in large organisations, or MNCs
