Understanding Management 10th Edition by Daft - Test Bank

1. Business has become a unified, global field as trade barriers fall, communication becomes faster and cheaper, and consumer tastes converge. *a. True b. False 2. When Harbor Trades, a Korean-based company, makes resources including technology, managerial skills, and patent and trademark rights available to Nano Technologies, a Russian company, thereby allowing Nano to make products similar to Harbor, it is engaging in exporting. a. True *b. False 3. Large international firms typically are called multinational corporations. *a. True b. False 4. An example of global outsourcing is seen when Gap, Inc. uses low-cost Caribbean labor to cheaply produce its clothing, and then finishes off and sells its clothing in the United States. *a. True b. False 5. The least costly and least risky direct investment is called a greenfield venture. a. True *b. False 6. Licensing means engaging in the international division of labor so that work activities can be done in countries with the cheapest sources of labor and supplies. a. True *b. False 7. The goal of the European Union is to create a powerful single market system for Europe’s millions of consumers. *a. True b. False 8. The basic management functions of planning, organizing, leading, and controlling are the same whether a company operates domestically or internationally. *a. True b. False 9. Because of cheap labor, most international business firms are headquartered in the less developed countries of Asia and South America. a. True *b. False 10. An MNC is managed as an integrated worldwide business system. *a. True b. False 11. The primary emphasis of polycentric companies is on their home countries. a. True *b. False 12. A country's physical facilities that support economic activities make up its infrastructure. *a. True b. False 13. The estimated 2010 misery index figures suggest significantly less misery for almost every country as compared to figures at the beginning of the century. a. True *b. False 14. Many U.S. managers fail to realize that the values and behaviors that typically govern how business is done in the United States do not translate to the rest of the world. *a. True b. False 15. The social value of uncertainty avoidance is evident in countries like Greece, which supports beliefs that provide stability and conformity among its citizenry. *a. True b. False 16. Collectivism means a preference for a tightly knit social framework in which individuals look after one another and organizations protect their members' interests. *a. True b. False 17. According to the GLOBE Project, gender differentiation refers to the extent to which a society maximizes gender role differences. *a. True b. False 18. A high humane orientation means that a society encourages toughness, assertiveness, and competitiveness. a. True *b. False 19. A low-context culture is a culture in which communication is used to enhance personal relationships. a. True *b. False 20. For the past several years, foreign companies have invested more business in India than they spent anywhere else in the world. a. True *b. False 21. Most American shoppers support the movement of certain jobs overseas if it benefits them in the form of lower prices. a. True *b. False 22. The extent to which trade and investments, information, social and cultural ideas, and political cooperation flow between countries is called: a. standardization. b. industrialization. *c. globalization. d. internationalism. e. linguistic pluralism. 23. The Digitec company has recently decided to design and manufacture a laptop that retails for under $50, in an effort to make information technology available to people in places like rural Africa and rural India. This is known as what type of strategy? *a. Bottom of the pyramid strategy b. Skimming the barrel strategy c. Cream of the crop strategy d. Top of the peak strategy e. Base price strategy 24. _____ place an emphasis on a worldwide perspective. a. Polycentric companies *b. Geocentric companies c. Ethnocentric companies d. Regiocentric companies e. Domestic companies 25. Which of the following refers to engaging in the international division of labor so as to obtain the cheapest sources of labor and supplies regardless of country? a. Franchising b. Licensing c. Market entry strategy *d. Outsourcing e. Activity 26. The Maquiladora industry along the Texas-Mexico border on the Mexico side uses cheap labor for assembling products. This lowers the price for U.S. consumers and is an example of: a. licensing. b. joint venture. *c. outsourcing. d. franchising. e. a greenfield venture. 27. Go RVing, a U.S. company, built a subsidiary from scratch in England. This is an example of: a. franchising. *b. greenfield venture. c. joint venture. d. exporting. e. licensing. 28. As a first step into international business, which two countries are most companies going to today? a. Russia and Japan b. Sweden and Germany *c. China and India d. Brazil and Philippines e. Indonesia and Brazil 29. Your company is interested in producing and marketing a line of coffee that will penetrate the Chinese market. Your firm is willing to supply the equipment, products, product ingredients, trademark, and standardized operating system to entrepreneurs. What type of strategy are you going to use? a. Wholly owned foreign affiliate b. A greenfield venture agreement *c. A franchise d. An export agreement e. Barter trade 30. The management of business operations conducted in more than one country is called: a. global management. *b. international management. c. outsourcing management. d. planning management. e. domestic management. 31. Language, values, religion, and education all describe which dimension in the international environment? a. Economic b. Legal c. Political *d. Sociocultural e. Technological 32. Your grocery store in India is having trouble getting the local farmers to supply you with the proper produce. This is a problem with India's: a. product market. *b. resource market. c. infrastructure. d. economy. e. power distance. 33. A company's risk of loss of assets, earning power, or managerial control due to politically based events or action by host government is referred to as: a. MFN. *b. political risk. c. tariffs. d. political instability. e. terrorism. 34. A foreign terrorist kidnaps your firm's marketing VP while the VP is in the host country. This is a harsh example of: a. economic development. b. infrastructure. *c. political risk. d. international law. e. social risk. 35. A.R.C. is a large non-profit humanitarian aid organization that has been forced to pull out of several African markets in recent years due to civil wars and large-scale violence. This demonstrates which frequently cited problem for international companies? *a. Political instability b. Communist governments c. Economic instability d. Political risk e. Financial risk 36. Jana has a high tolerance for the unstructured, the unclear, and the unpredictable. She can best be described as having: a. high uncertainty avoidance. *b. low uncertainty avoidance. c. high degree of individualism. d. low degree of individualism. e. low level of power distance. 37. Which of the following countries possesses a high performance orientation? a. Israel b. Sweden *c. Taiwan d. Russia e. Venezuela 38. Austria's cultural preference is for achievement, heroism, assertiveness, and material success. This would be considered: a. power distance. b. individualism. *c. masculinity. d. ethnocentrism. e. collectivism. 39. All of the following are cultural dimensions as defined by the GLOBE Project, except: a. assertiveness. b. gender differentiation. c. social collectivism. d. humane orientation. *e. masculinity. 40. Which of the following countries possesses a high degree of assertiveness? *a. Spain b. Sweden c. Japan d. Iceland e. Switzerland 41. How many nations signed on for negotiation when GATT was created in 1947? a. 15 *b. 23 c. 28 d. 40 e. 57 42. Kim, a Japanese expatriate working in Denmark, tends to use communication primarily to build personal social relationships. She feels that relationships and trust are more important than business. Kim is surprised that her business associates in Denmark do not share the same views. Based on this information, Kim most likely grew up in what type of culture? a. Human-oriented b. Passive c. Assertive d. Low-context *e. High-context 43. Which of the following has a goal to guide the nations of the world toward free trade and open markets? a. GATT *b. WTO c. GLOBE d. EU e. NAFTA 44. Which organization originated and supports the idea of small businesses operating on a global level? a. GLOBE b. EU *c. NAFTA d. ASEAN e. GATT 45. The legal-political environment includes: a. infrastructure. *b. tariffs and taxes. c. religion. d. exchange rates. e. demographic profile. 46. MNCs that are oriented toward the markets of individual foreign host countries are considered _____. Correct Answer(s): a. polycentric companies 47. A multinational corporation typically receives at least _____ percent of its total sales revenues from outside the parent's home country. Correct Answer(s): a. 25 b. twenty-five c. twenty five 48. _____ means engaging in the international division of labor so that manufacturing can be done in countries with the cheapest sources of labor and supplies. Correct Answer(s): a. Global outsourcing 49. _____ is the criterion traditionally used to classify countries as developed or developing. Correct Answer(s): a. Per capita income 50. _____ (objects, taboos, holidays) is a sociocultural factor in the international environment. Correct Answer(s): a. Religion 51. Riots, revolutions, civil disorders, and frequent changes in government that affect the operations of an international company shows _____ in a country. Correct Answer(s): a. political instability 52. _____ stands for preference for achievement, heroism, assertiveness, work centrality (with resultant high stress), and material success. Correct Answer(s): a. Masculinity 53. A country that places emphasis on fairness and values kindness would be described by the GLOBE Project as high in _____. Correct Answer(s): a. humane orientation 54. In a(n) _____, people use communication primarily to exchange facts and information. Correct Answer(s): a. low-context culture 55. An alliance begun in 1957 to improve economic and social conditions among its members, it has evolved into the 27-nation _____. Correct Answer(s): a. European Union 56. The _____ is the single European currency that has replaced 12 national currencies. Correct Answer(s): a. euro 57. The _____ dimension of the global mind-set means knowing about the global environment and global business, mentally understanding how cultures differ, and having the ability to interpret complex global changes. Correct Answer(s): a. cognitive 58. The economy of _____, already the seventh largest in the world, is projected to move into fourth place by 2050. Correct Answer(s): a. Brazil 59. List three examples of a country's infrastructure. Correct Answer(s): 60. List five of the countries that make up the European Union (EU). Correct Answer(s): 61. Briefly describe the social characteristic of ethnocentrism and explain how this can have an impact on the success of an international manager. 62. Direct investing means that the company is involved in managing the productive assets in a foreign country. There are three options for direct investing. Name and compare these three options. 63. Identify and briefly explain at least two key factors in economic, sociocultural, and political-legal environments that affect an organization. 64. Briefly explain the difference between high power distance and low power distance. 65. Explain NAFTA.