C211 WGU Study Guide Questions 2025 LATEST
UPDATED SOLUTIONS
Competency 1: Business Decision Making in the Global Environment
Globalization (Peng Chapters 1, 5, 6, 11)
1. What determines the success and failure of firms around the globe?
2. List and briefly explain the two views (core perspectives) for global business.
Institution based – success and failure of firms are enabled and constrained by institutions (rules)
Resource based – success and failure are enabled by internal resources and capabilities
3. What is globalization? Explain the three views on globalization.
Close integration of countries and people of the world. Can be viewed as a new force sweeping thru the world
recently, historical evolution since the dawn of human history, or a pendulum swinging from one end to another
4. What is FDI? Identify and define the key terms associated with FDI.
Foreign Direct Investing - Investing in, controlling, and managing value-added activities in other countries
5. What is the OLI advantage? (Explain)
A firm’s quest for ownership, location, and internalization advantages
6. What are the political views on FDI? (Explain)
Radical – opposed
Free Market – win-win situations
Pragmatic – approved only when benefits > costs
7. What are the costs and benefits of FDI to the host country? (Explain)
Capital inflow, technology, management, job creation
8. What are the costs and benefits of FDI to the home country? (Explain)
Earnings, exports, learning from abroad
9. How do resources and capabilities influence the competitive dynamics of a business? (Give an example)
Value, rarity, and imitability
10. What is resource similarity and how does this impact competitive dynamics? (Give an example)
Extent to which a given competitor possesses strategic endowment comparable to a focal firm
International Trade and Foreign Exchange Market (Peng Chapters 5, 7, 10)
1. What is a trade deficit, trade surplus, and balance of trade?
Trade Deficit – when a nation imports more than it exports
Trade Surplus – when a nation exports more than it imports
Balance of Trade – aggregation of importing/exporting the leads to the country-level trade surplus or deficit
2. Why do nations trade?
For economic gain.
3. Describe classical and modern international trade theories (what differences exist?)
Classic – Mercantilism, Absolute Advantage, Comparative Advantage
, Modern – Product Life Cycle, Strategic Trade, National Competitive Advantage
4. Explain the three types of classical international trade theories. (Table 5.4)
Mercantilism – zero sum game, wealth of the world is fixed, oldest theory, win/lose
Absolute Advantage – to be more efficient at production than others, specialization, win/win
Comparative Advantage – gains arise from differences in endowments or technology, can produce the good at
lower opportunity cost (what is given up to get something)
5. Who came up with the invisible hand and absolute advantage theories?
Adam Smith
6. What is the relationship between mercantilism and protectionism?
Mercantilism – wealth of the world is fixed and that a nation will become richer by exporting more and
importing less (came before protectionism)
Protectionism – govt. should actively protect domestic industries from imports and promote exports
7. What are the three stages of the product life cycle? Describe each stage with respect to output.
Product Life Cycle – dynamic, accounts for trade over time
Strategic Trade – intervention by govt. to enhance odds for success, capture ‘first mover’ and have infant-
industry protection
National Competitive Advantage – Porter Diamond – certain industries are competitive, some aren’t, help
countries connect research to industry outcomes
8. How would you describe strategic trade? Give an example.
Intervention by the government to enhance the odds of success for trade, a new auto maker tries to build trade in
another country against competitors
9. What is an exchange rate? How do supply and demand determine the exchange rate of a country?
The price of one currency in terms of another. Strong demand increases price, over supply reduces price.
10. What are fixed, pegged, floating, managed float exchange rates?
Fixed – set exchange rate of a currency relative to other currencies
Floating – allow supply and demand conditions determine exchange rate
Pegged – linking a developing country’s currency to a key currency
Managed Float – using selective govt. intervention to determine exchange rate
11. Explain the concept of “hedging” as it relates to reducing various types of risk.
Protecting oneself from currency risk and fluctuations of spot rates
12. What is the difference between currency hedging and strategic hedging?
Currency hedging – transaction that protects traders from exposure to the fluctuations of a spot rate
Strategic hedging – spreading out activities among many regions to offset losses
13. If a company seeks to limit foreign exchange rate exposure in the forward direction, what is the most effective
way to do this?
Invoicing in their own currencies, currency hedging, & strategic hedging
14. Give an example of first and late movers and list each mover’s advantages.
First Mover – Apple – proprietary & tech leadership, establishment of entry barriers, relationship with govt.
Late Mover – Toyota – free ride opportunity, resolution of uncertainty, less difficult to adapt
15. What are the two models of foreign market entries? Describe each scale of entry with examples.
Non-equity – reflects smaller commitments to overseas markets – exports & contractual agreements
Equity modes – reflects larger, harder-to-reverse commitment – subsidiaries (partial and whole)
Competency 2: Political and Economic Forces
Political and Economic Forces (Peng Chapter 2)
1. How do institutions reduce uncertainty?
Constrain the range of acceptable actions, minimize transaction costs – institutions are NOT static
UPDATED SOLUTIONS
Competency 1: Business Decision Making in the Global Environment
Globalization (Peng Chapters 1, 5, 6, 11)
1. What determines the success and failure of firms around the globe?
2. List and briefly explain the two views (core perspectives) for global business.
Institution based – success and failure of firms are enabled and constrained by institutions (rules)
Resource based – success and failure are enabled by internal resources and capabilities
3. What is globalization? Explain the three views on globalization.
Close integration of countries and people of the world. Can be viewed as a new force sweeping thru the world
recently, historical evolution since the dawn of human history, or a pendulum swinging from one end to another
4. What is FDI? Identify and define the key terms associated with FDI.
Foreign Direct Investing - Investing in, controlling, and managing value-added activities in other countries
5. What is the OLI advantage? (Explain)
A firm’s quest for ownership, location, and internalization advantages
6. What are the political views on FDI? (Explain)
Radical – opposed
Free Market – win-win situations
Pragmatic – approved only when benefits > costs
7. What are the costs and benefits of FDI to the host country? (Explain)
Capital inflow, technology, management, job creation
8. What are the costs and benefits of FDI to the home country? (Explain)
Earnings, exports, learning from abroad
9. How do resources and capabilities influence the competitive dynamics of a business? (Give an example)
Value, rarity, and imitability
10. What is resource similarity and how does this impact competitive dynamics? (Give an example)
Extent to which a given competitor possesses strategic endowment comparable to a focal firm
International Trade and Foreign Exchange Market (Peng Chapters 5, 7, 10)
1. What is a trade deficit, trade surplus, and balance of trade?
Trade Deficit – when a nation imports more than it exports
Trade Surplus – when a nation exports more than it imports
Balance of Trade – aggregation of importing/exporting the leads to the country-level trade surplus or deficit
2. Why do nations trade?
For economic gain.
3. Describe classical and modern international trade theories (what differences exist?)
Classic – Mercantilism, Absolute Advantage, Comparative Advantage
, Modern – Product Life Cycle, Strategic Trade, National Competitive Advantage
4. Explain the three types of classical international trade theories. (Table 5.4)
Mercantilism – zero sum game, wealth of the world is fixed, oldest theory, win/lose
Absolute Advantage – to be more efficient at production than others, specialization, win/win
Comparative Advantage – gains arise from differences in endowments or technology, can produce the good at
lower opportunity cost (what is given up to get something)
5. Who came up with the invisible hand and absolute advantage theories?
Adam Smith
6. What is the relationship between mercantilism and protectionism?
Mercantilism – wealth of the world is fixed and that a nation will become richer by exporting more and
importing less (came before protectionism)
Protectionism – govt. should actively protect domestic industries from imports and promote exports
7. What are the three stages of the product life cycle? Describe each stage with respect to output.
Product Life Cycle – dynamic, accounts for trade over time
Strategic Trade – intervention by govt. to enhance odds for success, capture ‘first mover’ and have infant-
industry protection
National Competitive Advantage – Porter Diamond – certain industries are competitive, some aren’t, help
countries connect research to industry outcomes
8. How would you describe strategic trade? Give an example.
Intervention by the government to enhance the odds of success for trade, a new auto maker tries to build trade in
another country against competitors
9. What is an exchange rate? How do supply and demand determine the exchange rate of a country?
The price of one currency in terms of another. Strong demand increases price, over supply reduces price.
10. What are fixed, pegged, floating, managed float exchange rates?
Fixed – set exchange rate of a currency relative to other currencies
Floating – allow supply and demand conditions determine exchange rate
Pegged – linking a developing country’s currency to a key currency
Managed Float – using selective govt. intervention to determine exchange rate
11. Explain the concept of “hedging” as it relates to reducing various types of risk.
Protecting oneself from currency risk and fluctuations of spot rates
12. What is the difference between currency hedging and strategic hedging?
Currency hedging – transaction that protects traders from exposure to the fluctuations of a spot rate
Strategic hedging – spreading out activities among many regions to offset losses
13. If a company seeks to limit foreign exchange rate exposure in the forward direction, what is the most effective
way to do this?
Invoicing in their own currencies, currency hedging, & strategic hedging
14. Give an example of first and late movers and list each mover’s advantages.
First Mover – Apple – proprietary & tech leadership, establishment of entry barriers, relationship with govt.
Late Mover – Toyota – free ride opportunity, resolution of uncertainty, less difficult to adapt
15. What are the two models of foreign market entries? Describe each scale of entry with examples.
Non-equity – reflects smaller commitments to overseas markets – exports & contractual agreements
Equity modes – reflects larger, harder-to-reverse commitment – subsidiaries (partial and whole)
Competency 2: Political and Economic Forces
Political and Economic Forces (Peng Chapter 2)
1. How do institutions reduce uncertainty?
Constrain the range of acceptable actions, minimize transaction costs – institutions are NOT static
