International Business Exam #1
Questions with Correct Answers
What are the key drivers of Globalization? - ANSWER-Reduction of trade &
investment barriers
Market liberalization and the adoption of free markets
Industrialization, economic development, and modernization
Integration of world financial markets
Advances in technology (the internet, transportation)
What are the main dimensions of Globalization? - ANSWER-Integration and
interdependence of national economies:
Multi-country operations through trade, investment, geographic dispersal of company
resources, and integration/coordination of value-chain activities.
Rise of regional economic integration blocs:
Growth of global investment and financial flows:
Convergence of buyer lifestyles and preferences:
Globalization of production activities:
Globalization of services:
What is a value chain? What are the stages? - ANSWER-A sequence of value
adding activities performed by the firm in the course of developing, producing,
marketing, and servicing a product.
Research & Development -> Procurement (Sourcing) -> Manufacturing -> Marketing
-> Distribution -> Sales & Service
In the Globalization Case Study what were the points made by the Activist? -
ANSWER-International business ignores human rights and basic labor standards.
International business and globalization harm the environment.
International trade interferes with the sovereignty of national governments.
In the Globalization Case Study what were the points made by the Business
Executive? - ANSWER-The U.S. needs to participate in the global economy.
Exporting provides better paying jobs, among other benefits. Foreign companies
, investing here create new jobs, enhance local living standards, and pressure firms to
remain competitive.
Trading internationally will increase living standards everywhere. More affluent
peoples will develop who will care more about environment.
Companies recognize the importance of being good global citizens. Ex: Motorola
contributing to developing the educational system in China.
In the Globalization Case Study what were the points made by the Trade Official? -
ANSWER-Free trade is valuable
NAFTA has helped in economic growth by allowing trade/exporting to other countries
Free trade involves taking environmental concerns into account
What are some of the competitive advantages of being involved in international
business? - ANSWER-Global Competence: self-confident, cosmopolitan, and open
to unique opportunities. Open-minded, tolerance for ambiguity, perceptive, premium
on personal relationships, flexible, adaptable, humorous, warmth in human
relationship, a curious mind.
How do technological changes effect globalization? - ANSWER-Plunging costs of
computing, communications, and transportation have greatly reduced the costs of
doing business internationally, and successful firms continually search for new
sources of competitiveness.
Telecommunications & Microprocessors:
- High power/low cost computing
- Increase in information processing capacity
- The internet and the world-wide web
What does contagion refer to? - ANSWER-The tendency for a financial or monetary
crisis in one country to spread rapidly to other countries due to the ongoing
integration of national economies.
Who are the four Primary Players in International Business? (In order of value-chain
activity) - ANSWER-1) Focal Firm
2) Distribution Channel Intermediary
3) Facilitator
4) Government
What role do Focal Firms play in I.B.? - ANSWER-The initiator of an international
business transaction.
Ex: Made up of MNE & SME's
Small businesses are actually huge contributors! They make up a majority of the
businesses involved in I.B. because they can export abroad due to financial
restraints of actually being present in those countries. (BORN GLOBALS)
Questions with Correct Answers
What are the key drivers of Globalization? - ANSWER-Reduction of trade &
investment barriers
Market liberalization and the adoption of free markets
Industrialization, economic development, and modernization
Integration of world financial markets
Advances in technology (the internet, transportation)
What are the main dimensions of Globalization? - ANSWER-Integration and
interdependence of national economies:
Multi-country operations through trade, investment, geographic dispersal of company
resources, and integration/coordination of value-chain activities.
Rise of regional economic integration blocs:
Growth of global investment and financial flows:
Convergence of buyer lifestyles and preferences:
Globalization of production activities:
Globalization of services:
What is a value chain? What are the stages? - ANSWER-A sequence of value
adding activities performed by the firm in the course of developing, producing,
marketing, and servicing a product.
Research & Development -> Procurement (Sourcing) -> Manufacturing -> Marketing
-> Distribution -> Sales & Service
In the Globalization Case Study what were the points made by the Activist? -
ANSWER-International business ignores human rights and basic labor standards.
International business and globalization harm the environment.
International trade interferes with the sovereignty of national governments.
In the Globalization Case Study what were the points made by the Business
Executive? - ANSWER-The U.S. needs to participate in the global economy.
Exporting provides better paying jobs, among other benefits. Foreign companies
, investing here create new jobs, enhance local living standards, and pressure firms to
remain competitive.
Trading internationally will increase living standards everywhere. More affluent
peoples will develop who will care more about environment.
Companies recognize the importance of being good global citizens. Ex: Motorola
contributing to developing the educational system in China.
In the Globalization Case Study what were the points made by the Trade Official? -
ANSWER-Free trade is valuable
NAFTA has helped in economic growth by allowing trade/exporting to other countries
Free trade involves taking environmental concerns into account
What are some of the competitive advantages of being involved in international
business? - ANSWER-Global Competence: self-confident, cosmopolitan, and open
to unique opportunities. Open-minded, tolerance for ambiguity, perceptive, premium
on personal relationships, flexible, adaptable, humorous, warmth in human
relationship, a curious mind.
How do technological changes effect globalization? - ANSWER-Plunging costs of
computing, communications, and transportation have greatly reduced the costs of
doing business internationally, and successful firms continually search for new
sources of competitiveness.
Telecommunications & Microprocessors:
- High power/low cost computing
- Increase in information processing capacity
- The internet and the world-wide web
What does contagion refer to? - ANSWER-The tendency for a financial or monetary
crisis in one country to spread rapidly to other countries due to the ongoing
integration of national economies.
Who are the four Primary Players in International Business? (In order of value-chain
activity) - ANSWER-1) Focal Firm
2) Distribution Channel Intermediary
3) Facilitator
4) Government
What role do Focal Firms play in I.B.? - ANSWER-The initiator of an international
business transaction.
Ex: Made up of MNE & SME's
Small businesses are actually huge contributors! They make up a majority of the
businesses involved in I.B. because they can export abroad due to financial
restraints of actually being present in those countries. (BORN GLOBALS)
