BUSA 4000 Midterm questions well
answered graded A+ passed
Why do firms participate in international business? - correct answer ✔✔- to better serve key
customers that have relocated abroad.
- to be closer to supply sources, benefit from global sourcing advantages, or gain flexibility in the
sourcing of products.
- gain access to lower costs or better value factors of production
- confront international competitors
- potential relationship with a foreign partner
What are the four risks of international business? - correct answer ✔✔Commercial risk,
currency (financial) risk, cross-cultural risk, country risk
What is cross-cultural risk? - correct answer ✔✔cultural differences like language, lifestyle,
attitudes, and religion, negotiation patterns.
What is currency risk? - correct answer ✔✔currency exposure, asset valuation, foreign taxation,
inflationary and transfer pricing.
What is commercial risk? - correct answer ✔✔weak partner, operational problems, timing of
entry, competitive intensity, poor execution of strategy
What is country risk? - correct answer ✔✔Exposure to potential loss or adverse effects on
company operations and profitability caused by developments in a country's political and/or
legal environments.
, What is competitive advantage? - correct answer ✔✔Factors that allow a company to produce
goods or services better or more cheaply than its rivals.
What are the 3 strategic objectives? - correct answer ✔✔efficiency, flexibility, learning
Define efficiency - correct answer ✔✔lower the cost of the firm's operations and activities on a
global scale
Define flexibility - correct answer ✔✔the agility to manage diverse country risks and
opportunities by tapping resources in individual countries
Define learning - correct answer ✔✔develop the firms products, technologies, capabilities, and
skills by internalizing knowledge gained from international ventures
What is visionary leadership? - correct answer ✔✔A quality of senior management that
provides superior strategic guidance for managing efficiency, flexibility, and learning
What is global team? - correct answer ✔✔an internationally distributed group of employees
charged with a specific problem solving mandate that affects the whole firm.
What is global integration? - correct answer ✔✔Coordination of the firm's value-chain activities
across multiple countries to achieve worldwide efficiency, synergy, and cross-fertilization, to
take advantage of similarities between countries.
What is local responsiveness? - correct answer ✔✔meeting the specific needs of buyers in
individual countries
What is a centralized approach? - correct answer ✔✔headquarters has considerable authority
and control over the firm's activities worldwide. EX: global integration
answered graded A+ passed
Why do firms participate in international business? - correct answer ✔✔- to better serve key
customers that have relocated abroad.
- to be closer to supply sources, benefit from global sourcing advantages, or gain flexibility in the
sourcing of products.
- gain access to lower costs or better value factors of production
- confront international competitors
- potential relationship with a foreign partner
What are the four risks of international business? - correct answer ✔✔Commercial risk,
currency (financial) risk, cross-cultural risk, country risk
What is cross-cultural risk? - correct answer ✔✔cultural differences like language, lifestyle,
attitudes, and religion, negotiation patterns.
What is currency risk? - correct answer ✔✔currency exposure, asset valuation, foreign taxation,
inflationary and transfer pricing.
What is commercial risk? - correct answer ✔✔weak partner, operational problems, timing of
entry, competitive intensity, poor execution of strategy
What is country risk? - correct answer ✔✔Exposure to potential loss or adverse effects on
company operations and profitability caused by developments in a country's political and/or
legal environments.
, What is competitive advantage? - correct answer ✔✔Factors that allow a company to produce
goods or services better or more cheaply than its rivals.
What are the 3 strategic objectives? - correct answer ✔✔efficiency, flexibility, learning
Define efficiency - correct answer ✔✔lower the cost of the firm's operations and activities on a
global scale
Define flexibility - correct answer ✔✔the agility to manage diverse country risks and
opportunities by tapping resources in individual countries
Define learning - correct answer ✔✔develop the firms products, technologies, capabilities, and
skills by internalizing knowledge gained from international ventures
What is visionary leadership? - correct answer ✔✔A quality of senior management that
provides superior strategic guidance for managing efficiency, flexibility, and learning
What is global team? - correct answer ✔✔an internationally distributed group of employees
charged with a specific problem solving mandate that affects the whole firm.
What is global integration? - correct answer ✔✔Coordination of the firm's value-chain activities
across multiple countries to achieve worldwide efficiency, synergy, and cross-fertilization, to
take advantage of similarities between countries.
What is local responsiveness? - correct answer ✔✔meeting the specific needs of buyers in
individual countries
What is a centralized approach? - correct answer ✔✔headquarters has considerable authority
and control over the firm's activities worldwide. EX: global integration
