Test Bank For Global Business 4th Edition By Mike Peng

Chapter 3 Emphasizing Informal Institutions Cultures Ethics and Norms TRUEFALSE 1. According to the institution-based view, informal institutions must be sought when formal institutions fail. (A) True (B) False Answer : (A) 2. The cultural norms of a country is an example of an informal institution. (A) True (B) False Answer : (A) 3. Informal institutions are based on the rules and legal systems of an economy. (A) True (B) False Answer : (B) 4. Informal institutions are closely related to ethnocentrism. (A) True (B) False Answer : (A) 5. Informal institutions are constructed on the regulatory pillars of a society. (A) True (B) False Answer : (B) 6. English-speaking countries contribute the largest share of global business output. (A) True (B) False Answer : (A) 7. Dividing individuals of a society into hierarchical classes is an example of social stratification. (A) True (B) False Answer : (A) 8. Social mobility refers to the degree to which people can move from one area to another area in a country. (A) True (B) False Answer : (B) 9. Social structure is the outcome of a society's formal and informal rules of the game. (A) True (B) False Answer : (A) 10. In socially mobile societies, education functions as a means to maintain social stratification. (A) True (B) False Answer : (B) 11. In high-context cultures, communication is usually taken at face value without much reliance on unspoken context. (A) True (B) False Answer : (B) 12. The United States has a low-context culture in business. (A) True (B) False Answer : (A) 13. The GLOBE project identifies a total of five clusters. (A) True (B) False Answer : (B) 14. The Ronen and Shenkar cluster divides the world into eight civilizations. (A) True (B) False Answer : (B) 15. Addressing bosses with honorary titles would be an instance of low power distance in a firm. (A) True (B) False Answer : (B) 16. Power distance is the extent to which less powerful members within a country expect and accept that power is distributed unequally. (A) True (B) False Answer : (A) 17. A boss regularly taking his employees out for casual lunches would indicate a low power distance within the firm. (A) True (B) False Answer : (A) 18. In individualistic societies, ties between individuals are relatively close. (A) True (B) False Answer : (B) 19. The United States is often classified as a collectivist society. (A) True (B) False Answer : (B) 20. A country with low masculinity has very subtle differentiation between gender roles in society. (A) True (B) False Answer : (A) 21. Cultures of low uncertainty avoidance tend to resist change. (A) True (B) False Answer : (B) 22. High uncertainty avoidance cultures are characterized by a greater willingness to take risk with change. (A) True (B) False Answer : (B) 23. Members of short-term orientation societies emphasize perseverance and savings for future betterment. (A) True (B) False Answer : (B) 24. The average length of contracts is longer in low-context countries than in high-context countries. (A) True (B) False Answer : (A) 25. Managers in high power distance countries are more inclined toward centralized authority. (A) True (B) False Answer : (A) 26. Managers in low uncertainty avoidance countries tend to rely more on rules than experience. (A) True (B) False Answer : (B) 27. Ethical imperialism suggests that all ethical standards are relative. (A) True (B) False Answer : (B) 28. "Respect for institutional context" is one of the guiding principles proposed by business ethicist Thomas Donaldson. (A) True (B) False Answer : (A) 29. A proactive firm would anticipate responsibility and do more than required when facing ethical challenges. (A) True (B) False Answer : (A) 30. According to Max Weber, Protestant work ethics led to the rise of capitalism in Europe. (A) True (B) False Answer : (A) 31. Confucianism has been a leading philosophy in East Asian business ethics. (A) True (B) False Answer : (A) 32. Collectivists are more collaborative when dealing with in-group members. (A) True (B) False Answer : (A) 33. Individualists make more distinction between in-group and out-group members than collectivists. (A) True (B) False Answer : (B) 34. Cultural intelligence emphasizes the understanding of informal institutions. (A) True (B) False Answer : (A) 35. In acquiring cultural intelligence, awareness refers to the ability to identify the symbols, rituals, and taboos in other cultures. (A) True (B) False Answer : (B) MULTICHOICE 36. _____ refers to the quality of a society that perceives its own culture, ethics, and norms as natural, rational, and morally right. (A) Polycentrism (B) Ethnocentrism (C) Anthropocentrism (D) Social mobility Answer : (B) 37. Which of the following aspects of a culture would be categorized as an informal institution? (A) Ethics (B) Politics (C) Economics (D) Laws Answer : (A) 38. Which of the following is a factor for English being accepted as the global business language? (A) English speakers have traditionally been more mobile than non-English speakers. (B) English is far easier to translate to and from, than any other language. (C) English-speaking countries contribute the largest share of global business output. (D) English is the largest language in terms of the number of native speakers. Answer : (C) 39. Which of the following languages is considered the lingua franca of global business? (A) English (B) Chinese (C) Spanish (D) French Answer : (A) 40. The hierarchical arrangement of individuals into categories such as classes, castes, or divisions within a society is referred to as _____. (A) social dumping (B) social stratification (C) social facilitation (D) social loafing Answer : (B) 41. Social mobility refers to the degree to which _____. (A) members from a collectivist society move to an individualist society (B) members from a lower social category move to a higher social category (C) people from emerging economies move to developed economies (D) people from developed economies move to emerging economies Answer : (B) 42. Which of the following statements is true about low-context cultures? (A) Communication relies a lot on the underlying unspoken context. (B) Communication depends equally between the unspoken and spoken contexts. (C) Communication primarily depends on body language. (D) Communication is usually taken at face value. Answer : (D) 43. In ____ cultures, the unspoken context is as important as the words used during communication. (A) high-context (B) low-context (C) individualistic (D) collectivist Answer : (A) 44. A _____ is the highest cultural grouping of people and the broadest level of cultural identity people have. (A) clan (B) chiefdom (C) civilization (D) tribe Answer : (C) 45. Which of the following cultural clusters contains the group "Hindu"? (A) The GLOBE clusters (B) The Huntington civilizations (C) The Ronen and Shenkar clusters (D) The Kogut-Singh cultural index Answer : (B) 46. Which of the following is true of the GLOBE clusters? (A) It divides all the nations of the world into western and eastern cultures. (B) It divides the nations of the world into ten clusters. (C) It divides the nations of the world based on civilizations. (D) It divides the nations of the world based on their religious affinity. Answer : (B) 47. In a collectivist society, _____. (A) family units are highly valued (B) individual identity is considered separate from his or her group (C) ties between individuals are relatively loose (D) individual achievement and freedom are highly valued Answer : (A) 48. In an individualistic society, _____. (A) an individual's identity is fundamentally tied to the identity of his or her group (B) ties between individuals are very strong (C) an individual's identity is fundamentally his or her own (D) collective accomplishments are more important than individual accomplishments Answer : (C) 49. Which of the following methods of understanding cultural differences characterizes sex role differentiation in cultures? (A) Humanistic Approach (B) Cluster Approach (C) Context Approach (D) Dimensional Approach Answer : (D) 50. Which of the following is one of the five dimensions outlined in the Dimensions Approach? (A) Language (B) Work ethics (C) Religion (D) Uncertainty avoidance Answer : (D) 51. Which of the following is a characteristic of high masculinity societies? (A) Women are more likely to become politicians and soldiers. (B) Men frequently assume the role of nurses, teachers, and househusbands. (C) There is a sharp role differentiation along gender lines. (D) Managers are less visible, intuitive rather than decisive, and accustomed to seeking consensus. Answer : (C) 52. _____ refers to the extent to which members in a culture tolerate ambiguous situations. (A) Uncertainty avoidance (B) Lingua franca (C) Ethnocentrism (D) Long-term orientation Answer : (A) 53. Which of the following descriptions summarizes ethical imperialism? (A) It is a perspective that each firm should cultivate its own ethics. (B) It is a perspective that there is only one set of ethics. (C) It is a perspective that ethical standards are relative. (D) It is a perspective that ethical standards can never be codified. Answer : (B) 54. A(n) ____ is a set of guidelines for helping a firm make ethical decisions. (A) operating agreement (B) certificate of incorporation (C) mission statement (D) code of conduct Answer : (D) 55. An American firm operating in the Middle East struggles with enforcing rules opposing sexual discrimination against Muslim women working in its management. Which of the following describes the American firm's stand against enforcing local norms? (A) Ethical relativism (B) Cultural relativism (C) Ethical imperialism (D) Xenocentrism Answer : (C) 56. Which of the following is one of the three "middle-of-the-road" guiding principles proposed by business ethicist Thomas Donaldson? (A) Firms should try to export its home-country ethics to the global market. (B) Firms should not base their ethics on local institutions. (C) Firms should be culturally sensitive when conducting business abroad. (D) Firms should follow a universal ethical business code regardless of geography. Answer : (C) 57. The _____ enacted in 1977 bans U.S. firms from bribing non-U.S. officials. (A) Trust Against Bribery and Distortion Act (B) Foreign Corrupt Practices Act (C) Statute of Limitation on Foreign Direct Investment Act (D) Bribery of Foreign Public Officials Act Answer : (B) 58. Which of the following is true of the reactive strategy to ethical challenges in business? (A) It admits responsibility and does less than what is required. (B) It accepts responsibility and does more than what is required. (C) It anticipates institutional changes and does more than what is required. (D) It denies responsibility and takes a passive approach. Answer : (D) 59. A firm that has adopted an accommodative strategy for ethical challenges in business _____. (A) accepts responsibility and does all that is required (B) denies responsibility and does less than required (C) admits responsibility but does the least that is required (D) anticipates institutional changes and does more than is required Answer : (A) 60. According to sociologist Max Weber, what is the ideological foundation that led to the rise of Western economic development? (A) The Industrial Revolution (B) Protestant work ethics (C) Catholicism (D) Colonialism Answer : (B) 61. Sociologist Max Weber criticized _____ as a leading cause of Asian backwardness. (A) atheism (B) Buddhism (C) Confucianism (D) Deism Answer : (C) 62. _____ refers to the coexistence of both cultural divergence and cultural convergence. (A) Cultural concurrence (B) Covariance (C) Limited divergence (D) Crossvergence Answer : (D) 63. Members of a group or collective consider each other as _____. (A) in-group members (B) out-group members (C) individualistic members (D) cross-cultural members Answer : (A) 64. Individualists differ from collectivists in that individualists are _____. (A) less collaborative with in-group members (B) more collaborative with out-group members (C) more opportunistic when dealing with in-group members (D) less opportunistic with out-group members Answer : (C) 65. Which of the following is true of individualists and collectivists? (A) Individualists are more collaborative when dealing with in-group members. (B) Collectivists are more opportunistic when dealing with out-group members. (C) Individualists discriminate more harshly against out-group members. (D) Collectivists are opportunistic when dealing with in-group members. Answer : (B) 66. Tyrone has described himself as an individualist. This means that he (A) takes advantage of opportunities to advance his career. (B) is untrustworthy. (C) discriminates harshly against out-group members. (D) can't work with other people. Answer : (A) 67. Michelle is an American expatriate starting a new job in China. She should (A) expect her Chinese coworkers to learn American norms. (B) continue to speak only English because it's the language of business. (C) rely on relationships formed in the United States. (D) establish relationships in China. Answer : (D) 68. When an expatriate came to work with Samuel's department, Samuel created a comfort zone for the expatriate by adopting the expatriate's general posture and communication style without resorting to mockery. Samuel is (A) demonstrating that his own culture is better. (B) acknowledging that the expatriate's culture is better. (C) respecting cultural differences. (D) ignoring cultural differences. Answer : (C) 69. The most effective way to understand a foreign culture is (A) studying the culture. (B) total immersion in the culture. (C) making friends with people who are members of the culture. (D) respecting the culture. Answer : (B) 70. Which of the following is the final phase of acquiring cultural intelligence? (A) Skills (B) Awareness (C) Knowledge (D) Divergence Answer : (A) ESSAY 71. Define culture. Describe the four major components of culture. Graders Info : Culture is the collective programming of the mind which distinguishes the members of one group or category of people from another. The four major components of culture are: (1) language, (2) religion, (3) social structure, and (4) education. ​Language: Chinese is the largest language in terms of the number of native speakers. English is a distant second. Yet, English is the global business language. It is known as the lingua franca. of business communication. First, English-speaking countries contribute the largest share (about one- third) of global output. Such economic dominance not only drives trade and investment ties between English-speaking countries and the rest of the world, but also generates a constant stream of products and services marketed in English. Second, recent globalization has called for the use of one common language. Countries sharing a common language obviously will find it easier and cheaper to trade with each other.​ Religion: The four leading religions are (1) Christianity, (2) Islam, (3) Hinduism, and (4) Buddhism. Because religious differences have led to numerous challenges, knowledge about religions is crucial even for non-religious officials.​ Social structure: Social structure refers to the way a society broadly organizes its members-with rigidity or flexibility. It is the outcome of a society's formal and informal rules of the game that give birth to its norms and values.​ Education: From an early age, schools teach children mainstream values and norms and foster a sense of cultural identity. In socially rigid societies, education, especially access to a small number of elite schools, helps to maintain social stratification. On the other hand, socially mobile societies break down social barriers with education. 72. Describe the context approach to understanding cultural differences. Graders Info : Of the three main approaches probing into cultural differences, the context approach is the most straightforward. It focuses on a single dimension: context. Context is the underlying background upon which social interaction takes place. In low-context cultures (such as North American and Western European countries), communication is usually taken at face value without much reliance on unspoken context. In other words, "no" means "no." In contrast, in high-context cultures (such as Arab and Asian countries), communication relies a lot on the underlying unspoken context, which is as important as the words used. Why is context important? Because failure to understand the differences in interaction styles may lead to misunderstanding. 73. Explain the dimensional approach of power distance in cultures. Graders Info : Power distance is the extent to which less powerful members within a country expect and accept that power is distributed unequally. In high power distance Brazil, the richest 10% of the population pockets approximately 50% of the national income, and everybody accepts this as "the way it is." In low power distance Sweden, the richest 10% only obtains 22% of the national income. Even within the same cluster, there are major differences. 74. Explain how the "middle-of-the-road" strategies bridge the disparity between ethical relativism and ethical imperialism. Graders Info : Three "middle-of-the-road" guiding principles have been proposed by Thomas Donaldson, a business ethicist. First, respect for human dignity and basic rights (such as those concerning health, safety, and the needs for education instead of working at a young age) should determine the absolute minimal ethical thresholds for all operations around the world. Second, respect for local traditions suggests cultural sensitivity. If gifts are banned, foreign firms can forget about doing business in China and Japan. Whereas hiring employees' children and relatives instead of more qualified applicants is illegal according to US equal opportunity laws, Indian companies routinely practice such nepotism, which would strengthen employee loyalty. What should US companies setting up subsidiaries in India do? Donaldson advises that such nepotism is not necessarily wrong-at least in India. Finally, respect for institutional context calls for a careful understanding of local institutions. Codes of conduct banning bribery are not very useful unless accompanied by guidelines for the scale of appropriate gift-giving or -receiving. Citigroup allows employees to accept noncash gifts with nominal value of less than US$100. The Economist lets its journalists accept any noncash gift that can be consumed in a single day-thus, a bottle of wine is acceptable, but a case of wine is not. Overall, these three principles, although far from perfect, can help managers improve the quality of their decisions. 75. Describe the different strategic responses to ethical challenges. Graders Info : How firms strategically respond to ethical challenges is often driven, at least in part, by norms Four broad strategic responses are: (1) reactive, (2) defensive, (3) accommodative, and (4) proactive strategies. A reactive strategy is passive. When problems arise, denial is usually the first line of defense. In the absence of formal regulation, the need to take necessary action is neither internalized through cognitive beliefs nor becoming any norm in practice. A defensive strategy focuses on regulatory compliance. In the absence of regulatory pressures, firms often fight informal pressures coming from the media and activists. An accommodative strategy features emerging organizational norms to accept responsibility and a set of increasingly internalized cognitive beliefs and values toward making certain changes. These normative and cognitive values may be shared by a number of firms, thus leading to new industry norms. Finally, proactive firms anticipate institutional changes and do more than is required. 76. A common stereotype is that players from collectivist societies are more collaborative and trustworthy, and that those from individualist societies are more competitive and opportunistic. What do you think the relation between collectivism/individualism and opportunistic behavior is? How does the understanding of collectivism/individualism help managers? Graders Info : One cultural dimension, individualism/collectivism, may hold the key to an improved understanding of opportunism. A common stereotype is that players from collectivist societies are more collaborative and trustworthy, and that those from individualist societies are more competitive and opportunistic. However, this superficial understanding is not necessarily the truth. Collectivists are more collaborative only when dealing with in-group members-individuals and firms regarded as a part of their own collective. The flip side is that collectivists discriminate more harshly against out- group members-individuals and firms not regarded as a part of "us." On the other hand, individualists, who believe that every person (firm) is on his/her (its) own, make less distinction between in-group and out-group members. Therefore, while individualists may indeed be more opportunistic than collectivists when dealing with in-group members (this fits the stereotype), collectivists may be more opportunistic when dealing with out-group members. This insight can help managers and firms better deal with one another. Only through repeated social interactions can collectivists assess whether to accept newcomers as in-group members. If foreigners who, by definition, are from an out-group refuse to show any interest in joining the in- group, then it is fair to take advantage of them. This is why many cross-culturally naïve Western managers and firms often bemoan being taken advantage of in collectivist societies-they are simply being treated as "deserving" out-group members. 77. What are the six rules of thumb when going overseas and how can they help expatriates? Graders Info : The following six rules of thumb can help expatriates gain skills that lead to success in foreign locations. ● Be prepared. ● Slow down. ● Establish trust. ● Understand the importance of language. ● Respect cultural differences. ● Understand that no culture is inherently superior in all aspects. 78. Define cultural intelligence. Describe the process of acquisition of cultural intelligence. Graders Info : Cultural intelligence is defined as an individual's ability to understand and adjust to new cultures. Acquisition of cultural intelligence passes through three phases: (1) awareness, (2) knowledge, and (3) skills. Awareness refers to the recognition of both the pros and cons of your "mental software" and the appreciation of people from other cultures. Knowledge refers to the ability to identify the symbols, rituals, and taboos in other cultures-also known as cross-cultural literacy. Finally, skills are based on awareness and knowledge, plus good practice.