UVU MGMT 330G EXAM 1 STUDY GUIDE | PRINCIPLES OF MANAGEMENT PRACTICE
QUESTIONS AND ANSWERS | COMPLETE REVIEW
international business - ANS ✔✔a business whose activities are carried out across national
borders
multi domestic company - ANS ✔✔An organization with multicounty affiliates, each of which
formulates its own business strategy based on perceived market differences
global company - ANS ✔✔An organization that attempts to standardize and integrate
operations worldwide in all functional areas
Explain the difference between controllable and uncontrollable forces. - ANS ✔✔Controllable
forces are internal forces that management administers to adapt to changes in the
uncontrollable forces. Uncontrollable forces are external forces over which management has no
direct control although it can exert an influence.
self-reference criterion - ANS ✔✔Unconscious reference to one's own cultural values when
judging behaviors of others in a new and different environment
economic globalization - ANS ✔✔The tendency toward an international integration of goods
technology, information, labor and capital, or the process of making this integration happen
five drivers of globalization. - ANS ✔✔Political, technological, market, cost, competitive
Explain how entering foreign markets can increase profits - ANS ✔✔1) Providing greater
revenue - firms are simultaneously introducing products in foreign markets and in their
domestic markets as they move toward greater globalization of their operations.
, 2) Lower the cost of goods sold - By exporting or by producing overseas can lower the cost of
goods sold. Increasing total sales by exporting not only will reduce research and development
cost per unit but also will make other economies of scale possible.
Firms often enter foreign markets to protect markets, profits, and sales. - ANS ✔✔1) Following
customers overseas - Firms do this to protect its home market. They do this to prevent
competitors from gaining foreign operations in markets where their principle accounts are
located. Suppliers do it to have an added advantage in that they are moving into new markets
with a guaranteed customer base.
2) Lack of foreign exchange - Managers know that once a company has a plant in the country
the government will do its utmost to provide foreign exchange for raw materials to keep the
plant, a source of employment, in operation.
3) Protectionism - When a government sees that local industry is threatened by imports, it may
erect import barriers to stop or reduce these imports. Even threats to do this can be sufficient
to induce the exporter to invest in production facilities in the importing country.
4) Acquiring technology - A reason by foreign firms for investing in the US is the acquisition of
technology and management know-how.
List 4 advantages for a firm to first export to its country's major trading partners. - ANS ✔✔1.
Favorable Climate
2. Good import/export regulations
3. Foreign exchange to pay for exports are available
4. Satisfactory transportation facilities are already established
mercantilism - ANS ✔✔An economic philosophy based on the belief that a nation's wealth
depends on accumulated treasure, usually gold, and to increase wealth government policies
should promote exports and discourage imports.
QUESTIONS AND ANSWERS | COMPLETE REVIEW
international business - ANS ✔✔a business whose activities are carried out across national
borders
multi domestic company - ANS ✔✔An organization with multicounty affiliates, each of which
formulates its own business strategy based on perceived market differences
global company - ANS ✔✔An organization that attempts to standardize and integrate
operations worldwide in all functional areas
Explain the difference between controllable and uncontrollable forces. - ANS ✔✔Controllable
forces are internal forces that management administers to adapt to changes in the
uncontrollable forces. Uncontrollable forces are external forces over which management has no
direct control although it can exert an influence.
self-reference criterion - ANS ✔✔Unconscious reference to one's own cultural values when
judging behaviors of others in a new and different environment
economic globalization - ANS ✔✔The tendency toward an international integration of goods
technology, information, labor and capital, or the process of making this integration happen
five drivers of globalization. - ANS ✔✔Political, technological, market, cost, competitive
Explain how entering foreign markets can increase profits - ANS ✔✔1) Providing greater
revenue - firms are simultaneously introducing products in foreign markets and in their
domestic markets as they move toward greater globalization of their operations.
, 2) Lower the cost of goods sold - By exporting or by producing overseas can lower the cost of
goods sold. Increasing total sales by exporting not only will reduce research and development
cost per unit but also will make other economies of scale possible.
Firms often enter foreign markets to protect markets, profits, and sales. - ANS ✔✔1) Following
customers overseas - Firms do this to protect its home market. They do this to prevent
competitors from gaining foreign operations in markets where their principle accounts are
located. Suppliers do it to have an added advantage in that they are moving into new markets
with a guaranteed customer base.
2) Lack of foreign exchange - Managers know that once a company has a plant in the country
the government will do its utmost to provide foreign exchange for raw materials to keep the
plant, a source of employment, in operation.
3) Protectionism - When a government sees that local industry is threatened by imports, it may
erect import barriers to stop or reduce these imports. Even threats to do this can be sufficient
to induce the exporter to invest in production facilities in the importing country.
4) Acquiring technology - A reason by foreign firms for investing in the US is the acquisition of
technology and management know-how.
List 4 advantages for a firm to first export to its country's major trading partners. - ANS ✔✔1.
Favorable Climate
2. Good import/export regulations
3. Foreign exchange to pay for exports are available
4. Satisfactory transportation facilities are already established
mercantilism - ANS ✔✔An economic philosophy based on the belief that a nation's wealth
depends on accumulated treasure, usually gold, and to increase wealth government policies
should promote exports and discourage imports.
