IMS 3310 Exam 1 UT Dallas Questions With
Accurate Answers
International Business - ANSWER Business that is carried out across national
borders
Foreign Business - ANSWER The operations of a company outside its home or
domestic market
International Company (IC) - ANSWER A company with operations in multiple
nations
Environment - ANSWER All the forces influencing the life and development of the
firm
Uncontrollable forces - ANSWER The External forces that management has no
direct control over
What are the 11 Uncontrollable Forces? - ANSWER -competitive
-Distributive
-Economic
-Socioeconomic
-Financial
-Legal
-Physical
-Political
-Sociocultural
-Labor
-Technological
Controllable Forces - ANSWER Internal forces that management administers to
adapt to changes in the uncontrollable forces
1. Human Resources
2. Finance
3. Production
4. Marketing
Domestic Environment - ANSWER All the uncontrollable forces originating in the
home country that surround and influence the life and development of the firm
,Foreign Environment - ANSWER All the uncontrollable forces originating outside
the home country that surround and influence the firm
-values often differ widely
-difficult to asses, especially legal and political forces
-forces interrelated
International Environment - ANSWER Interactions between domestic and foreign
environmental forces, as well as interactions between the foreign environmental
forces of two countries
-Decision making is more complex
-Managers in home office overseeing subsidiaries in 10 different nations must
consider not only domestic forces but also the influence of 10 foreign national
environments, both individually and collectively since there may be some
interaction
Self Reference Orientation - ANSWER Unconscious references to your own
cultural values when judging behaviors of others in environment
-Time Vs Money
Foreign Direct Investment (FDI) - ANSWER Direct investments in equipment,
structures, and organizations in a foreign country at a level sufficient to obtain
significant management control;
Note: does not include mere foreign investment in stocks
Exporting - ANSWER The transportation of any domestic good or service to a
destination outside a country or region
Importing - ANSWER The transportation of any good or service into a country or
region, from a foreign origination point
economic globalization - ANSWER The tendency toward an international
integration and interdependency of good, technology, info, labor, and capital, or
the process of making this integration happen
Trade Defecit - ANSWER The amount by which by which the value of imports into
a nation exceeds the value of trade exports
Imports > Exports
Trade Surplus - ANSWER Exports > Imports
Mercantilism - ANSWER An economic philosophy based on the beleif that
, 1. a nation's wealth depends on accumulated treasure, usually precious metals
such as gold or silver
2. To increase wealth, government policies should promote exports and
discourage imports
Absolute Advantage - ANSWER a nation's ability to produce more of a good or
service than another country for the same or lower cost of inputs
Strategic behavior theory - ANSWER suggests that strategic rivalry between
firms in an oligopolistic industry will result in firms closely following and
imitating each other's international investments in order to keep a competitor
from gaining an advantage
Perfect Competition - ANSWER a market situation in which there is a sufficiently
large number of well-informed buyers and sellers of a homogeneous product,
such that no individual participant has enough power to determine the price of
the product, resulting in a marketplace that is efficient in production and
allocation of products (aka example of absolute adv)
Comparative Advantage - ANSWER When one nation is less efficient than
another nation in the production of each of two goods, the less efficient nation
has a comparative advantage in the production of that good for which its
absolute disadvantage is less
Internalization Theory - ANSWER Theory that to obtain a higher return on its
investment, a firm will transfer its superior knowledge to a foreign subsidiary
that it controls, rather than sell it in the open market
Dynamic capability theory - ANSWER Theory that for a firm to successfully
invest overseas, it must have not only ownership of unique knowledge or
resources, but also the ability to dynamically create, sustain, and exploit these
capabilities over time
Eclectic Theory of International Production - ANSWER Theory proposing that for
a firm to invest in facilities overseas, it must have three kinds of advantages:
1. Ownership specific
2. Location specific
3. Internalization
Exchange Rate - ANSWER the price of one currency stated in terms of another
Currency Devaluation - ANSWER A reduction in the value of a country's
currency relative to other currencies
Accurate Answers
International Business - ANSWER Business that is carried out across national
borders
Foreign Business - ANSWER The operations of a company outside its home or
domestic market
International Company (IC) - ANSWER A company with operations in multiple
nations
Environment - ANSWER All the forces influencing the life and development of the
firm
Uncontrollable forces - ANSWER The External forces that management has no
direct control over
What are the 11 Uncontrollable Forces? - ANSWER -competitive
-Distributive
-Economic
-Socioeconomic
-Financial
-Legal
-Physical
-Political
-Sociocultural
-Labor
-Technological
Controllable Forces - ANSWER Internal forces that management administers to
adapt to changes in the uncontrollable forces
1. Human Resources
2. Finance
3. Production
4. Marketing
Domestic Environment - ANSWER All the uncontrollable forces originating in the
home country that surround and influence the life and development of the firm
,Foreign Environment - ANSWER All the uncontrollable forces originating outside
the home country that surround and influence the firm
-values often differ widely
-difficult to asses, especially legal and political forces
-forces interrelated
International Environment - ANSWER Interactions between domestic and foreign
environmental forces, as well as interactions between the foreign environmental
forces of two countries
-Decision making is more complex
-Managers in home office overseeing subsidiaries in 10 different nations must
consider not only domestic forces but also the influence of 10 foreign national
environments, both individually and collectively since there may be some
interaction
Self Reference Orientation - ANSWER Unconscious references to your own
cultural values when judging behaviors of others in environment
-Time Vs Money
Foreign Direct Investment (FDI) - ANSWER Direct investments in equipment,
structures, and organizations in a foreign country at a level sufficient to obtain
significant management control;
Note: does not include mere foreign investment in stocks
Exporting - ANSWER The transportation of any domestic good or service to a
destination outside a country or region
Importing - ANSWER The transportation of any good or service into a country or
region, from a foreign origination point
economic globalization - ANSWER The tendency toward an international
integration and interdependency of good, technology, info, labor, and capital, or
the process of making this integration happen
Trade Defecit - ANSWER The amount by which by which the value of imports into
a nation exceeds the value of trade exports
Imports > Exports
Trade Surplus - ANSWER Exports > Imports
Mercantilism - ANSWER An economic philosophy based on the beleif that
, 1. a nation's wealth depends on accumulated treasure, usually precious metals
such as gold or silver
2. To increase wealth, government policies should promote exports and
discourage imports
Absolute Advantage - ANSWER a nation's ability to produce more of a good or
service than another country for the same or lower cost of inputs
Strategic behavior theory - ANSWER suggests that strategic rivalry between
firms in an oligopolistic industry will result in firms closely following and
imitating each other's international investments in order to keep a competitor
from gaining an advantage
Perfect Competition - ANSWER a market situation in which there is a sufficiently
large number of well-informed buyers and sellers of a homogeneous product,
such that no individual participant has enough power to determine the price of
the product, resulting in a marketplace that is efficient in production and
allocation of products (aka example of absolute adv)
Comparative Advantage - ANSWER When one nation is less efficient than
another nation in the production of each of two goods, the less efficient nation
has a comparative advantage in the production of that good for which its
absolute disadvantage is less
Internalization Theory - ANSWER Theory that to obtain a higher return on its
investment, a firm will transfer its superior knowledge to a foreign subsidiary
that it controls, rather than sell it in the open market
Dynamic capability theory - ANSWER Theory that for a firm to successfully
invest overseas, it must have not only ownership of unique knowledge or
resources, but also the ability to dynamically create, sustain, and exploit these
capabilities over time
Eclectic Theory of International Production - ANSWER Theory proposing that for
a firm to invest in facilities overseas, it must have three kinds of advantages:
1. Ownership specific
2. Location specific
3. Internalization
Exchange Rate - ANSWER the price of one currency stated in terms of another
Currency Devaluation - ANSWER A reduction in the value of a country's
currency relative to other currencies
