©THEBRIGHTSTARS 2024
UIowa management Exam 2 Questions With
Correct Revised Answers
Forces for Internationalization - answer✔✔Globalization - tendency of firms to expand sales,
manufacturing, and ownership to new markets in other countries
-modern communication technology
-air travel
-corporate globalism
Pros and Cons of gobalization - answer✔✔Pros:
-productivity grows
-living standards increase
-inflation is less likely (cheap)
-innovation (new ideas)
-access to new markets and new customers
-export jobs pay more
Cons:
-Americans lose jobs
-fear losing jobs
-competition for american companies
-pay cut
-service and white collar job in danger
Internationalization Process - 5 big options - answer✔✔Stage 1: Exporting - selling domestically
produced products to customers in foreign countries
Stage 2: Cooperative contracts - an agreement in which a foreign business owner pays a
company a fee for the right to conduct that business in his or her country
, ©THEBRIGHTSTARS 2024
Stage 3: Strategic alliances - an agreement in which companies combine key resources, costs,
risks, technology, and people
Stage 4: Wholly owned affiliates - foreign offices, facilities, and manufacturing plants that are
100% owned by the parent company
New Global Ventures - new companies that are founded with an active global strategy and have
sales, employees, and financing in different countries
2 types of cooperative contracts - answer✔✔Licensing - an agreement in which a domestic
company, the licencor, receives royalty payments for allowing another company, the licensee to
produce the licencor's product, sell its service, or use its brand name in a specified foreign market
Franchising - a collection of networked firms in which the manufacturer or marketer of a product
or service, the franchiser, licenses the entire business to another person or organization, the
franchisee
Problem at Mustang Jeans - answer✔✔deals with international business, does business the
"american way", which turns off foreign business leaders
-the cultural imperative
-culture barriers and norms prevented american man and Japanese man from doing business
together
High context cultures - answer✔✔Cultures in which nonverbal and situational messages convey
meaning
-relationship more important than terms
Low context cultures - answer✔✔Cultures in which words convey primary meaning
-nonverbal messages are secondary
-the terms of the deal are more important than building a business relationship
Hofstede's dimensions - answer✔✔-long-term vs. short-term orientation
-uncertainty avoidance
-masculinity vs. femininity
-individualism vs. collectivism
-power distance
long-term vs. short-term orientation - answer✔✔addresses whether cultures are oriented to the
present and seek immediate gratification or to the future and defer gratification
, ©THEBRIGHTSTARS 2024
uncertainty avoidance - answer✔✔the degree to which people in a country are uncomfortable
with unstructured, ambiguous, unpredictable situations
masculinity vs. femininity - answer✔✔the difference between highly assertive and highly
nurturing cultures
individualism vs. collectivism - answer✔✔the degree to which societies believe that individuals
should be self-sufficient
power distance - answer✔✔the extent to which people in a country accept that power is
unequally distributed in organizations and society
indulgence vs. restraint - answer✔✔addresses the degree to which a society allows relatively free
gratification of basic drives related to enjoying life and having fun vs. strict social norms that
regulate and suppress gratification of needs and wants
Tariff - answer✔✔a direct tax on imported goods; increase cost of imported goods relative to
that of domestic goods
Non-tariff trade barriers - answer✔✔non tax methods of increasing the cost or reducing volume
of imported goods; 5 types:
1. quotas - a limit on the number or volume of imported products
2. voluntary export restraints - imposed limits on number or volume of products exported to a
particular country; exporting country imposes
3. government import standard - a standard ostensibly established to protect the health and safety
of citizens but in reality is often used to restraint imports
4. subsidies - government loans, grants and tax deferments given to domestic companies to
protect them from foreign competition
5. customs classification - assigned to imported products by government officials that affects the
size of the tariff and the imposition of import quotas
why do managers need to know about tariffs and trade? - answer✔✔free trade agreements create
new business opportunities, they also intensify competition and addressing that competition is
the managers job
Characteristics of attractive foreign business climate - answer✔✔access to a growing market; 2
factors:
-purchasing power (high is favorable) - relative cost of a standard set of goods and services in
different countries
-foreign competitors (determined by the number and quality of companies that already compete
in foreign market)
UIowa management Exam 2 Questions With
Correct Revised Answers
Forces for Internationalization - answer✔✔Globalization - tendency of firms to expand sales,
manufacturing, and ownership to new markets in other countries
-modern communication technology
-air travel
-corporate globalism
Pros and Cons of gobalization - answer✔✔Pros:
-productivity grows
-living standards increase
-inflation is less likely (cheap)
-innovation (new ideas)
-access to new markets and new customers
-export jobs pay more
Cons:
-Americans lose jobs
-fear losing jobs
-competition for american companies
-pay cut
-service and white collar job in danger
Internationalization Process - 5 big options - answer✔✔Stage 1: Exporting - selling domestically
produced products to customers in foreign countries
Stage 2: Cooperative contracts - an agreement in which a foreign business owner pays a
company a fee for the right to conduct that business in his or her country
, ©THEBRIGHTSTARS 2024
Stage 3: Strategic alliances - an agreement in which companies combine key resources, costs,
risks, technology, and people
Stage 4: Wholly owned affiliates - foreign offices, facilities, and manufacturing plants that are
100% owned by the parent company
New Global Ventures - new companies that are founded with an active global strategy and have
sales, employees, and financing in different countries
2 types of cooperative contracts - answer✔✔Licensing - an agreement in which a domestic
company, the licencor, receives royalty payments for allowing another company, the licensee to
produce the licencor's product, sell its service, or use its brand name in a specified foreign market
Franchising - a collection of networked firms in which the manufacturer or marketer of a product
or service, the franchiser, licenses the entire business to another person or organization, the
franchisee
Problem at Mustang Jeans - answer✔✔deals with international business, does business the
"american way", which turns off foreign business leaders
-the cultural imperative
-culture barriers and norms prevented american man and Japanese man from doing business
together
High context cultures - answer✔✔Cultures in which nonverbal and situational messages convey
meaning
-relationship more important than terms
Low context cultures - answer✔✔Cultures in which words convey primary meaning
-nonverbal messages are secondary
-the terms of the deal are more important than building a business relationship
Hofstede's dimensions - answer✔✔-long-term vs. short-term orientation
-uncertainty avoidance
-masculinity vs. femininity
-individualism vs. collectivism
-power distance
long-term vs. short-term orientation - answer✔✔addresses whether cultures are oriented to the
present and seek immediate gratification or to the future and defer gratification
, ©THEBRIGHTSTARS 2024
uncertainty avoidance - answer✔✔the degree to which people in a country are uncomfortable
with unstructured, ambiguous, unpredictable situations
masculinity vs. femininity - answer✔✔the difference between highly assertive and highly
nurturing cultures
individualism vs. collectivism - answer✔✔the degree to which societies believe that individuals
should be self-sufficient
power distance - answer✔✔the extent to which people in a country accept that power is
unequally distributed in organizations and society
indulgence vs. restraint - answer✔✔addresses the degree to which a society allows relatively free
gratification of basic drives related to enjoying life and having fun vs. strict social norms that
regulate and suppress gratification of needs and wants
Tariff - answer✔✔a direct tax on imported goods; increase cost of imported goods relative to
that of domestic goods
Non-tariff trade barriers - answer✔✔non tax methods of increasing the cost or reducing volume
of imported goods; 5 types:
1. quotas - a limit on the number or volume of imported products
2. voluntary export restraints - imposed limits on number or volume of products exported to a
particular country; exporting country imposes
3. government import standard - a standard ostensibly established to protect the health and safety
of citizens but in reality is often used to restraint imports
4. subsidies - government loans, grants and tax deferments given to domestic companies to
protect them from foreign competition
5. customs classification - assigned to imported products by government officials that affects the
size of the tariff and the imposition of import quotas
why do managers need to know about tariffs and trade? - answer✔✔free trade agreements create
new business opportunities, they also intensify competition and addressing that competition is
the managers job
Characteristics of attractive foreign business climate - answer✔✔access to a growing market; 2
factors:
-purchasing power (high is favorable) - relative cost of a standard set of goods and services in
different countries
-foreign competitors (determined by the number and quality of companies that already compete
in foreign market)
