BUSA 4000 Midterm Test Questions and Answers Fully Solved Latest Update 2025-2026
Why do firms participate in international business? - Answers - 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? - Answers Commercial risk, currency (financial) risk,
cross-cultural risk, country risk
What is cross-cultural risk? - Answers cultural differences like language, lifestyle, attitudes, and religion,
negotiation patterns.
What is currency risk? - Answers currency exposure, asset valuation, foreign taxation, inflationary and
transfer pricing.
What is commercial risk? - Answers weak partner, operational problems, timing of entry, competitive
intensity, poor execution of strategy
What is country risk? - Answers 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? - Answers Factors that allow a company to produce goods or services
better or more cheaply than its rivals.
What are the 3 strategic objectives? - Answers efficiency, flexibility, learning
Define efficiency - Answers lower the cost of the firm's operations and activities on a global scale
Define flexibility - Answers the agility to manage diverse country risks and opportunities by tapping
resources in individual countries
Define learning - Answers develop the firms products, technologies, capabilities, and skills by
internalizing knowledge gained from international ventures
What is visionary leadership? - Answers A quality of senior management that provides superior strategic
guidance for managing efficiency, flexibility, and learning
What is global team? - Answers an internationally distributed group of employees charged with a
specific problem solving mandate that affects the whole firm.
Why do firms participate in international business? - Answers - 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? - Answers Commercial risk, currency (financial) risk,
cross-cultural risk, country risk
What is cross-cultural risk? - Answers cultural differences like language, lifestyle, attitudes, and religion,
negotiation patterns.
What is currency risk? - Answers currency exposure, asset valuation, foreign taxation, inflationary and
transfer pricing.
What is commercial risk? - Answers weak partner, operational problems, timing of entry, competitive
intensity, poor execution of strategy
What is country risk? - Answers 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? - Answers Factors that allow a company to produce goods or services
better or more cheaply than its rivals.
What are the 3 strategic objectives? - Answers efficiency, flexibility, learning
Define efficiency - Answers lower the cost of the firm's operations and activities on a global scale
Define flexibility - Answers the agility to manage diverse country risks and opportunities by tapping
resources in individual countries
Define learning - Answers develop the firms products, technologies, capabilities, and skills by
internalizing knowledge gained from international ventures
What is visionary leadership? - Answers A quality of senior management that provides superior strategic
guidance for managing efficiency, flexibility, and learning
What is global team? - Answers an internationally distributed group of employees charged with a
specific problem solving mandate that affects the whole firm.
