Test Bank for International business 15th edition by John Daniels and Radebaugh Chapters 1-26 Covered

Test Bank International Business f f f




A global company is an organization with multicountry affiliates, each of w
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hich formulates its own business strategy based on perceived market diff
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erences.
False

One variable commonly used to measure where and how fast internation
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alization takes place is the increase in total foreign direct investment.
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True

The forces in the foreign environment operate the same way as those in th
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e domestic environment except that they occur in foreign nations.
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False

An international manager has two choices on what to do with a concept or
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technique employed in domestic operations: (1) transfer it intact or (2) ad
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apt it to local conditions.
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False

Financial, economic, and distributive forces are examples of controllable
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forces influencing the life and development of a firm.
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False

All the following are true about a global company except that it:
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A)maintains a presence in key markets around the world. f f f f f f f f


B)looks for differences among markets. f f f f


C)integrates its operations worldwide. f f f


D)standardizes operations worldwide in one or more of the firm's function f f f f f f f f f f


al areas.f


B. Looks for differences among markets
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The major globalization drivers include all of the following except:
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A)political.
B)social.
C)technological.
D)market.
B. Social f


Due to the expanding importance of foreign-
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owned firms in local economies, host governments have made their polici
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es toward these companies _____.
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A)more strict f


B)more liberal f

,C)less powerless f


D)more confronting f


B. More liberal
f f


Management has no direct control over the external environment of the fir f f f f f f f f f f f


m but can exert influence by:
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A)heavy promotion of new products to change cultural attitudes. f f f f f f f f


B)focusing on the strategic plan. f f f f


C)increasing the number of people. f f f f


D)exerting control over the inventory. f f f f


A. heavy promotion of new products to change cultural attitudes
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Unconscious reference to one's own cultural values when judging behavi f f f f f f f f f


oral actions of others in a new and different cultural environment is called:
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A)self-reference culture. f


B)self-reference values. f


C)self-reference criterion. f


D)self-reference environment. f


C. self-reference criterion
f f


The Heckscher- f


Ohlin theory states that differences in production costs occur because of
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differences in the supply of production factors. f f f f f f


False
An important outcome of Leontief's work was recognizing the potential for
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differences in the kinds of labor as well as differences in natural and capit
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al resources.
f


True
Recent research on the first mover theory also confirms that firms moving
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first into a market soon dominate it.
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False
Internalization theory suggests that to obtain a higher return on its invest f f f f f f f f f f f


ment, a firm should transfer its superior knowledge in the open market rat
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her than selling it to a foreign subsidiary.
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False
The eclectic theory of international production is sometimes referred to a
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s the OLI model.
f f f


True
Adam Smith claimed that: f f f


A)government, not market forces, should determine the direction, volum f f f f f f f f


e, and composition of international trade.
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B)a nation could trade advantageously if it had a comparative advantage.
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C)market forces, not government controls, should determine the directio f f f f f f f f


n, volume, and composition of international trade.
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D)customers' tastes are affected by income levels. f f f f f f


C. market forces, not government controls, should determine the directio
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n, volume, and composition of international trade.
f f f f f f

, Which of the following is not true about the international product life cycle?
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A)Concerns the role of innovation in trade patterns. f f f f f f f


B)Can be applied to new product introduction by firms in any of the industr
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ialized nations. f


C)Views a product as going through a full life cycle from the standardizatio
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n stage to internationalization.
f f f


D)The initial innovation stage of the cycle borrows from the Linder theory.
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C. Views a product as going through a full life cycle from the standardizati
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on stage to internationalization.
f f f




Economies of scale and the experience curve effect are important for inte f f f f f f f f f f f


rnational trade because: f f


B)they allow a nation's industries to become low-
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cost producers without requiring that the nation have an abundance of a c
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ertain class of production factors.
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To sum up international trade theory, we can say that the primary reason f
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or trade is:
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A)similarities in endowments of the factors of production. f f f f f f f


B)differences in interest rates for investments. f f f f f


C)the existence of price differentials among nations.
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D)effective utilization of factor intensities. f f f f


C. the existence of price differentials among nations
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Dunning's Eclectic Theory of International Production states that if a firm i
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s going to invest in production facilities abroad, it must have the following k
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inds of advantages: f f


A)ownership-specific, location-specific, and internationalization. f f f


B)strategic, location-specific, and technological. f f f


C)ownership-specific, location-specific, and internalization. f f f


D)technological, financial, and ownership-specific. f f f


C. ownership-specific, location-specific, and internalization
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The national culture is a key determinant for the evaluation of managers.
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True
Legal characteristics and political structures are components of culture.
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True
The demonstration effect is a result of the backward-
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bending labor supply curve. f f f


False
Generally, the greater the difference between an old and a new method or f f f f f f f f f f f f f


product, the easier it is for the firm to gain acceptance of a change.
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False
According to Hofstede, power distance is the extent to which members of
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a society accept the unequal distribution of power among individuals.
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True