KIM EXAM 1 MAN 3600 QUESTIONS
AND ACTUAL ANSWERS 2025\2026.
The Nature of International Business - Answer - all value-adding activities (including sourcing,
manufacturing, and marketing) can be performed in international locations.
What can international trade involve? - Answer Products, services, capital, technology, know-
how, and labor.
How do firms internationalize? - Answer through various entry strategies, such as exporting
and foreign direct investment (FDI)
Dimensions of International Business - Answer - Globalization of markets
- International Trade
- International Investment
- International Business risks
- Participants (firms, intermediaries, facilitators, governments)
- Foreign Market Entry Strategies
International Business - Answer Performance of trade and investment activities by firms across
national borders
(MNE or MNC)
Globalization of Markets - Answer ongoing economic integration and growing
interdependency of countries worldwide
International Trade - Answer Exchange of products and services across national borders,
typically through exporting and importing
exporting - Answer Sale of products or services to customers located abroad
Importing (or global sourcing) - Answer procurement (to obtain) of products or services from
suppliers located abroad for consumption in the home country or a third country
,International Portfolio investment - Answer passive ownership of foreign securities such as
stocks and bonds for the purpose of generating financial returns
Leading countries in international *merchandise trade* by total annual value in $billions -
Answer 1. China
2. US
3. Germany
4. Japan
5. France
Leading countries in international *merchandise trade* by % of GDP - Answer 1. Belgium
2. Netherlands
3. South Korea
4. Germany
5. Canada
Leading countries in international *service trade* by total annual value in $billions - Answer 1.
US
2. China
3. Germany
4. UK
5. France
Leading countries in international *service trade* by % of GDP - Answer 1. Ireland
2. Singapore
3. Hong Kong (China)
4. Denmark
5. Netherlands
Types of IB risks - Answer - cross-cultural risks
- country risks
, (always present but manageable; managers need to understand, anticipate, and take proactive
action to reduce their effects; some risks are extremely challenging.)
Cross-Cultural risks - Answer Cultural Differences: Risk arising from differences in language,
lifestyle, attitudes, customs, and religion, where a cultural miscommunication jeopardizes a
culturally-valued mindset or behavior.
Negotiation Patterns: Negotiations are required in many types of business transactions.
Decision-Making styles: managers make decisions continually on the operations and future
direction of the firm
Ethical Practices: standards of right and wrong vary considerably around the world.
Country (political) risks - Answer - government intervention, protectionism, and barriers to
trade and investment
- bureaucracy, red tape, administrative delays, corruption
- lack of legal safeguards for intellectual property rights
- legislation unfavorable to foreign firms
- economic failures and mismanagement
- social and political unrest and instability
Currency (financial) risks - Answer - Currency exposure: general risk of unfavorable exchange
rate fluctuations
- Asset valuation: risk that exchange rate fluctuations will adversely affect the value of the firm's
assets and liabilities.
- Foreign taxation: income, sales, and other taxes vary widely worldwide, with implications for
company performance and profitability.
- Inflation: high inflation, common to many countries, complicates business planning, and the
pricing of inputs and finished goods.
Commercial Risk - Answer - weak partner
- operational problems
- timing of entry
AND ACTUAL ANSWERS 2025\2026.
The Nature of International Business - Answer - all value-adding activities (including sourcing,
manufacturing, and marketing) can be performed in international locations.
What can international trade involve? - Answer Products, services, capital, technology, know-
how, and labor.
How do firms internationalize? - Answer through various entry strategies, such as exporting
and foreign direct investment (FDI)
Dimensions of International Business - Answer - Globalization of markets
- International Trade
- International Investment
- International Business risks
- Participants (firms, intermediaries, facilitators, governments)
- Foreign Market Entry Strategies
International Business - Answer Performance of trade and investment activities by firms across
national borders
(MNE or MNC)
Globalization of Markets - Answer ongoing economic integration and growing
interdependency of countries worldwide
International Trade - Answer Exchange of products and services across national borders,
typically through exporting and importing
exporting - Answer Sale of products or services to customers located abroad
Importing (or global sourcing) - Answer procurement (to obtain) of products or services from
suppliers located abroad for consumption in the home country or a third country
,International Portfolio investment - Answer passive ownership of foreign securities such as
stocks and bonds for the purpose of generating financial returns
Leading countries in international *merchandise trade* by total annual value in $billions -
Answer 1. China
2. US
3. Germany
4. Japan
5. France
Leading countries in international *merchandise trade* by % of GDP - Answer 1. Belgium
2. Netherlands
3. South Korea
4. Germany
5. Canada
Leading countries in international *service trade* by total annual value in $billions - Answer 1.
US
2. China
3. Germany
4. UK
5. France
Leading countries in international *service trade* by % of GDP - Answer 1. Ireland
2. Singapore
3. Hong Kong (China)
4. Denmark
5. Netherlands
Types of IB risks - Answer - cross-cultural risks
- country risks
, (always present but manageable; managers need to understand, anticipate, and take proactive
action to reduce their effects; some risks are extremely challenging.)
Cross-Cultural risks - Answer Cultural Differences: Risk arising from differences in language,
lifestyle, attitudes, customs, and religion, where a cultural miscommunication jeopardizes a
culturally-valued mindset or behavior.
Negotiation Patterns: Negotiations are required in many types of business transactions.
Decision-Making styles: managers make decisions continually on the operations and future
direction of the firm
Ethical Practices: standards of right and wrong vary considerably around the world.
Country (political) risks - Answer - government intervention, protectionism, and barriers to
trade and investment
- bureaucracy, red tape, administrative delays, corruption
- lack of legal safeguards for intellectual property rights
- legislation unfavorable to foreign firms
- economic failures and mismanagement
- social and political unrest and instability
Currency (financial) risks - Answer - Currency exposure: general risk of unfavorable exchange
rate fluctuations
- Asset valuation: risk that exchange rate fluctuations will adversely affect the value of the firm's
assets and liabilities.
- Foreign taxation: income, sales, and other taxes vary widely worldwide, with implications for
company performance and profitability.
- Inflation: high inflation, common to many countries, complicates business planning, and the
pricing of inputs and finished goods.
Commercial Risk - Answer - weak partner
- operational problems
- timing of entry
