Chapter 01

Question 1

International Managers Must:

Answer 1

Bridge cultural boundaries, cope with a fast paced environment, recognize global trends, and become skilled in the use of information technology

Question 2

WTO

Answer 2

A negotiating forum (e.g., the Doha round) for agreements related to regulation of the flow of trade and commerce among its members.

Question 3

Globalization

Answer 3

The process by which national economies are increasingly woven together worldwide.

Question 4

Tarrif

Answer 4

A government-imposed tax on imports.

Question 5

List a couple of threats for international CEOs

Answer 5

Over-regulation
Increased international competition
Currency fluctuations
Price deflation
Loss of critical talent
Global Terrorism

Question 6

Hottest Areas for Growth and Investment

Answer 6

FDI, Bric countries and The Triad

Question 7

What is FDI (foreign direct investment)

Answer 7

Capital and managerial knowledge that flows into a country from outside its borders.

Question 8

What is the BRIC

Answer 8

Those are emerging economic powers that are part of a group - Brazil, Russia, India, and China

Question 9

The triad is:

Answer 9

Traditional economic powerhouses—the United States, the European Union (EU), and Japan

Question 10

GDP

Answer 10

is the total value of economic activity in a country

Question 11

China’s Ascendance in Global Trading (challenges)

Answer 11

Dramatically rising labor costs,
Encouraging home-grown “innovation”,
Weak legal and regulatory systems; reliance on guanxi to conduct business

Question 11

China’s Ascendance in Global Trading

Answer 11

Market and Competitive Factors
(affluent consumers,
Globalization of strong local competitors,
Strong positions in emerging high-tech industries,
Limits on foreign competition in “strategic” industries)

Question 12

Give examples of challenges in doing business in specific countries

Answer 12

Challenges in the Middle East
Palestinian–Israeli discord.
Regional ethnic and religious conflicts.
In russia: Avoid engaging in partnerships with local firms in “strategic” industries (e.g., aerospace, oil, telecommunications).
Avoid “oligarchs”—businesspeople of dubious means whose political fortunes can shift quickly

Question 13

Key challenges facing International Business

Answer 13

Technological sophistication and international volatilty (cultural differences, political, currency, commodity prices)

Question 14

culture is

Answer 14

Collective mental programming that distinguishes one group of people from another.

Question 15

Multinational Enterprises:

Answer 15

Large, well-developed international firms operating in a variety of overseas locations.

MNEs are enterprises that engage in FDI and own or control value-adding activities in more than one country.

Question 16

Transitional Firms

Answer 16

Multinationals that evolved to the point where organizational diversity is a core value.

Question 17

MNE’s tipically

Answer 17

Have multiple facilities around the globe. A firm must own a majority stake in plants in the three key regions of North America, Europe, and the Pacific Rim
Derive a “substantial” portion of revenues from foreign operations
Run subsidiaries that possess a common strategic vision and draw from a common pool of resources
Place foreign nationals or expatriates at the board level and/or in senior management posts

Question 18

MNE’s cont.

Answer 18

The annual revenues of the largest MNEs are higher than the tax incomes of some countries

Question 19

MNE’s competitive advantages

Answer 19

Can draw on larger financial knowledge and human resources
Have broader experience than most local firms
Can afford to operate at a loss in unfavorable markets for a longer time before turning a profit
Have superior knowledge of their home market
Are often supported by their governments