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Global Business- Chung > Cumulative Questions from Slide Deck > Flashcards

Cumulative Questions from Slide Deck Flashcards

1
Q

All of the following theories advocated free trade except

Mercantilism
Comparative Advantage
Absolute Advantage
Hecksher-Ohlin

A

Mercantilism

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2
Q

Which theory suggested that comparative advantage arises
from differences in national factor endowments?

a) mercantilism
b) absolute advantage
c) Heckscher-ohlin
d) comparative advantage

A

c) Heckscher-ohlin

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3
Q

Which theory suggests that as products mature the optimal production location will change?

a) Mercantilism
b) Comparative Advantage
c) Absolute Advantage
d) Product life-cycle

A

d) Product life-cycle

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4
Q

Economies of scale and first mover advantages are important to which trade theory?

a) Mercantilism
b) Product life cycle
c) New trade theory
d) Comparative advantage

A

c) New trade theory

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5
Q

When tariffs are levied as a fixed charge for each unit of a good imported, they are called
a) Specific tariffs
b) Ad valorem tariffs
c) Tariff rate quotas
d) Transit tariffs

A

a) Specific tariffs

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6
Q

A ________ demands that some specific fraction of a good be produced domestically
a) subsidy
b) quota rent
c) voluntary export requirement
d) local content requirement

A

d) local content requirement

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7
Q

Which of the following is not a political argument for government intervention?
a) protecting jobs
b) protecting infant industries
c) protecting industries deemed important for national security
d) protecting consumers from “dangerous” products

A

b) protecting infant industries

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8
Q

What is the most common political reason for trade barriers?
a) To protect infant industries
b) Strategic trade policy
c) To protect jobs
d) To protect industries that are important for national security

A

c) To protect jobs

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9
Q

Which theory suggests that in cases where there may be important first mover advantages, governments can help firms from their countries attain these advantages?
a) The infant industry argument
b) Strategic trade theory
c) Comparative advantage theory
d) The Leontief paradox

A

b) Strategic trade theory

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10
Q

All of the following except _____ are key issues on the table at the Doha Round.
a) Anti-dumping policies
b) Protectionism in agriculture
c) Intellectual property rights
d) Infant industry protection

A

d) Infant industry protection

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11
Q

The sourcing of good and services from around the world to take advantage of national differences in the cost and quality of factors of production is called
a) economies of scale
b) the globalization of production
c) global integration
d) global sourcing

A

b) the globalization of production

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12
Q

Which organization is responsible for policing the world trading system?
a) the International Monetary Fund
b) the United Nations
c) the World Trade Organization
d) the World Bank

A

c) the World Trade Organization

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13
Q

Which is not an area where multinational firms are concerned about ethics?
a) Human rights
b) Trade regulations
c) Environmental regulations
d) Corruption

A

b) Trade regulations

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14
Q

All of the following except ____ contribute to unethical behavior by international managers.
a) Decision-making processes
b) Leadership
c) Personal ethics
d) National culture

A

d) National culture

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15
Q

According to ________, a company’s home-country standards of ethics are the appropriate ones to follow in foreign countries.
a) the righteous moralist
b) the naïve immoralist
c) the Friedman doctrine
d) cultural relativism

A

a) the righteous moralist

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16
Q

________ recognize that human beings have fundamental rights and privileges which transcend national boundaries and cultures.
a) Kantian ethics
b) Utilitarian approaches
c) Straw men
d) Rights theories

A

d) Rights theories

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17
Q

The _____ suggests that everyone is imagined to be ignorant of all his or her particular characteristics.
a) tragedy of the commons
b) veil of ignorance
c) code of ethics
d) the Universal Declaration of Human Rights

A

b) veil of ignorance

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18
Q

What is a company’s formal statement of ethical priorities called?
a) Mission statement
b) Code of ethics
c) Code of values
d) Organizational culture

A

b) Code of ethics

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19
Q

Which of the following is not a common pitfall of exporting?
a) a product offering that is customized to the local market
b) a poor understanding of competitive conditions in he foreign market
c) poor market analysis
d) problems securing financing

A

a) a product offering that is customized to the local market

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20
Q

Which of the following is not a purpose of the bill of lading?
a) It is a contract
b) It is a document of title
c) It is a form of payment
d) It is a receipt

A

c) It is a form of payment

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21
Q

Countertrade is attractive for all of the following reasons except
a) It may involve the exchange of unusable or poor-quality goods that the firm cannot dispose of profitably
b) It can give a firm a way to finance an export deal when other means are not available
c) It can be a strategic marketing weapon
d) It can give a firm an advantage over firms that are unwilling to engage in countertrade arrangements

A

a) It may involve the exchange of unusable or poor-quality goods that the firm cannot dispose of profitably

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22
Q

The establishment of a wholly new operation in a foreign country is called
A) an acquisition
B) a merger
C) a greenfield investment
D) a multinational venture

A

C) a greenfield investment

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23
Q

The amount of FDI undertaken over a given time period is known as
A) the flow of FDI
B) the stock of FDI
C) FDI outflow
D) FDI inflow

A

A) the flow of FDI

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24
Q

Most FDI is direct toward
a) developed countries
b) emerging economies
c) the United States
d) China

A

a) developed countries

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25
Q

Advantages that arise from using resource endowments or assets that are tied to a particular location and that a firm finds valuable to combine with its own unique assets are
a) First mover advantages
b) Location advantages
c) Externalities
d) Proprietary advantages

A

b) Location advantages

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26
Q

Benefits of FDI include all of the following except
a) The resource transfer effect
b) The employment effect
c) The balance of payments effect
d) National sovereignty and autonomy

A

d) National sovereignty and autonomy

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27
Q

Which of the following is not a cost of outward FDI for host countries?
a) the initial capital outflow required to finance the FDI
b) when FDI is a substitute for direct exports
c) gains from learning valuable skills from foreign markets
d) the effect on employment is FDI is a substitute for domestic production

A

c) gains from learning valuable skills from foreign markets

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28
Q

What is the rate of return the firm makes on its invested capital?

a) Profit growth
b) Profitability
c) Net return
d) Value created

A

b) Profitability

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29
Q

Which of the following is not an example of a primary activity?

a) Logistics
b) Marketing and sales
c) Customer service
d) Production

A

a) Logistics

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30
Q

What is created when different stages of a value chain are dispersed to locations where value added is maximized or where the costs of value creation are minimized?

a) Experience effects
b) Learning effects
c) Economies of scale
d) A global web

A

d) A global web

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31
Q

Which of the following is not a pressure for local responsiveness?

a) Excess capacity
b) Host government demands
c) Differences in consumer tastes and preferences
d) Differences in distribution channels

A

a) Excess capacity

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32
Q

Which strategy tries to simultaneously achieve low costs through location economies, economies of scale, and learning effects, and differentiate the product offering across geographic markets to account for local differences?

a) Internationalization
b) Localization
c) Global standardization
d) Transnational

A

d) Transnational

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33
Q

Which strategy makes sense when pressures are high for local responsiveness, but low for cost reductions?

a) Global standardization strategy
b) International strategy
c) Transnational strategy
d) Localization strategy

A

d) Localization strategy

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34
Q

Whose theory of comparative advantage suggests that countries should specialize in the production of those goods they produce most efficiently and buy goods that they produce less efficiently from other countries, even if this means buying goods from other countries that they could produce more efficiently at home

A

Ricardo

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35
Q

If each country specializes in the production of the good in which it has a ______________ _______ and trades for the other, both countries gain

A

comparative advantage

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36
Q

Who argued argued that comparative advantage: from differences in factor endowments, i.e., the extent to which a country is endowed with resources like land, labor, and capital

A

Eli Heckscher and Bertil Ohlin

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37
Q

Who theorized the following?
U.S. was relatively abundant in capital, so the U.S. would be an exporter of capital intensive goods and an importer of labor-intensive goods based on H-O.
BUT, he found that U.S. exports were less capital intensive than U.S. imports

A

Wassily Leontief

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38
Q

Who suggested that as products mature
both the location of sales and production will change, affecting the flow and direction of trade

A

Raymond Vernon,

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39
Q

In New Trade Theory— the patterns we observe in the world economy may be the result of __________ _________ _______ (the economic an strategic advantages that accrue to early entrants into an industry) and _____ ______ __________

A

economies of scale , first mover advantages

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40
Q

What are the 3 main implications for international businesses as they relate to Porter’s theory (new trade theories)

A

location implications: cost and markets
first-mover implications: advantage scale and learning
policy implications: leverage

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41
Q

Porter’s diamond of competitive advantage includes all of the following except

a) Factor endowments
b) Demand conditions
c) First-mover advantages
d) Firm strategy, structure, and rivalry

A

c) First-mover advantages

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42
Q

Economies of scale and first mover advantages are important to which trade theory?

a. Mercantilism
b. Product life cycle
c. New trade theory
d. Comparative advantage

A

c. New trade theory

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43
Q

_________ refer to the nature of home demand for the industry’s product or service.

a) Demand conditions
b) Factor endowments
c) Firm strategy, structure, and rivalry
d) Related and supporting industries

A

a) Demand conditions

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44
Q

What refers to the merging of historically distinct and separate national markets into one marketplace

A

Globalization of Markets

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45
Q

This refers to the sourcing of goods and services from locations around the globe to take advantage of national differences in the cost and quality of factors of production

A

globalization of production

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46
Q

How quickly to derivations in purchasing power parity disappear over time?

A

15% per year

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47
Q

how long it takes for half of the deviations from purchasing power parity to disappear?

A

4 years

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48
Q

trade activities between countries occur within what three boundaries

A

Religious, Cultural practice, and Explicit systems (political, economic, or legal rules)

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49
Q

the system of government in a nation is assessed according to what dimensions?

A

degree of focus on collectivism v. individualism
degree of focus on democratic v. totalitarian

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50
Q

______ systems tend to be totalitarian

A

collectivist

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51
Q

systems which place a high value on individualism tend to be

A

democratic

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52
Q

Which Greek philosopher proposed collectivism?

A

Plato (427-347 BC)…

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53
Q

Which Greek philosopher proposed individualism?

A

Aristotle (384-322 BC),

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54
Q

Socialism is split into what two camps?

A

Communism: planned by central government
Social democrats: socialism is achieved through democratic means, e.g., Sweden

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55
Q

What are the four types of totalitarianism?

A

Communist: the communist party monopolizes power
Theocratic: power is monopolized by a party, group, or individual that governs according to religious principles
Tribal: a political party that represents the interests of a particular tribe monopolizes power
Right-wing: permits some individual economic freedom, but restricts individual political freedom

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56
Q

What types of political systems are the most important to consider when conducting international business

A

any type that is PREDICTABLE in nature

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57
Q

What are the three types of economic systems:

A

market economies
command economies
mixed economies

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58
Q

What type of economy is this?

all productive activities are privately owned and production is determined by S&D
Government is to encourage free and fair competition between private producers/suppliers
Most conducive to innovation

A

Market economy

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59
Q

What type of economy is this?

all businesses are state-owned, i.e., gov’t, resources allocation for “the good of society”
Government plans the type/quantity of goods and services that a country produces, and set the prices
little incentive to be efficient (cost?)

A

command economy

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60
Q

What is a legal system?

A

A system by which rules that regulate behavior along with enforcement and redress

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61
Q

What are the three types of legal systems in the world?

A

Common law: based on tradition and precedent
Civic law: based on detailed set of codes
Theocratic law: based on religious teachings

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62
Q

What is a document that specifies the conditions under which an exchange is to occur and details the rights and obligations of the parties involved?

A

contract

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63
Q

Under this type of system, contracts tend to be very detailed with all contingencies spelled out

A

common law

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64
Q

Under this type of system, contracts tend to be much shorter and less specific because many issues are already covered in the code

A

civil law system

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65
Q

rights over the use a resource and over any income that may be derived from that resource are known as

A

property rights

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66
Q

Name the types of property rights violations

A

private action: theft, piracy
public action: officials extort income

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67
Q

The _____________________ makes it illegal for U.S. companies to bribe foreign government officials

A

Foreign Corrupt Practices Act

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68
Q

involves holding a firm and its officers responsible when a product causes injury, death, or damage

A

Product liability

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69
Q

What are main instruments of trade policy?

A

Tariffs
Subsides
Import Quotas
Voluntary Export Restraints
Local Content Requirements
Administrative Polices
Antidumping Policies

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70
Q

What are taxes levied on imports that effectively raise the cost of imported products relative to domestic products

A

tariffs

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71
Q

What type of tariffs are : levied as a % of the value of the imported good

A

Ad valorem tariffs

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72
Q

What are the three things that tariffs are supposed to accomplish?

A

increase government revenues,
provide protection to against foreign competitors
force consumers to pay more for certain imports

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73
Q

What are Government payments to domestic producers

A

subsidies

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74
Q

What are subsidies supposed to accomplish?

A

they help them compete against low-cost foreign imports
they help them gain export markets

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75
Q

What does a quota do?

A

restrict the quantity of some good imported into a country

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76
Q

a hybrid where a lower tariff is applied to imports within the quota than to those over the quota

A

tariff rate quota

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77
Q

Import quotas and voluntary export restraints protects against foreign competition, but do what?

A

raise prices

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78
Q

What demands that some specific fraction of good be produced domestically. These benefit domestic producers, but consumers face higher prices.

A

local content requirements

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79
Q

what is the practice of selling goods in a foreign market at below cost or fair market value, and may be predatory?

A

dumping

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80
Q

What are the political arguments for intervention in trade?

A

protecting jobs
protecting industries deemed important for national security
retaliating to unfair foreign competition
protecting consumers from “dangerous” products
furthering the goals of foreign policy, e.g., human rights of individuals in exporting countries

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81
Q

What is the most common political reason for trade barriers?
a) To protect infant industries
b) Strategic trade policy
c) To protect jobs
d) To protect industries that are important for national security

A

c) To protect jobs

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82
Q

Global Institutions created for trade include what two primary organizations?

A

the General Agreement on Tariffs and Trade (GATT)
the World Trade Organization (WTO)

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83
Q

What are the Non-trade Global Institutions?

A

the International Monetary Fund (IMF, 1944, access to hard currencies, liquidity and stability)
the World Bank (1944, for reconstruction)
the United Nations (1945 UN)

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84
Q

What are the primary objectives of the WTO?

A

improving people’s lives, negotiating trade rules, overseeing WTO agreements, maintaining open trade, settling disputes

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85
Q

What were the WTOs most significant event?

A

Nov 11, 2001, Doha (agreement took place then), China became part of WTO

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86
Q

What are the two macro factors that underlie the trend towards globalization?

A

the decline in barriers to the free flow of goods and capital and technology

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87
Q

What Four trends are important to the changing global economy?

A

the Changing World Output and World Trade Picture
the Changing Foreign Direct Investment Picture
the Changing Nature of the Multinational Enterprise
the Changing World Order

88
Q

is any business that has productive activities in two or more countries

A

A multinational enterprise (MNE)

89
Q

Since what decade has there been a rise in non-U.S. multinationals, and a growth of mini-multinationals

A

1960s

90
Q

What are the pros and cons towards the shift toward a more integrated and interdependent global economy

A

PRO- that increased trade and cross-border investment mean lower prices for goods and services, greater economic growth, higher consumer income, and more jobs
CON- globalization will cause job losses, environmental degradation, and the cultural imperialism of global media and MNEs

91
Q

Globalization critics point out what?

A

-trade destroys (manufacturing) jobs in advanced countries
-firms avoid costly labor and environmental regulations by moving production to countries where such -regulations do not exist, or are not enforced
shifting economic power away from national governments toward supranational organizations like the WTO, the EU, and the MNCs
-globalization causes widening gap between rich nations and poor nations

92
Q

What is driving the trend towards deglobalization?

A

Uneven distribution benefits of trade (compensation): Inequality

93
Q

What is the reasoning behind agreements between countries in a geographic region to reduce tariff and non-tariff barriers to the free flow of goods, services, and factors of production with each other

A

Regional economic integration

94
Q

what eliminates all barriers to the trade of goods and services among member countries, but members determine their own trade policies for nonmembers (ex NAFTA)

A

a free trade area

95
Q

what eliminates trade barriers AND a common external trade policy Ex (The Andean Pact )

A

a customs union

96
Q

what is no trade barriers, a common external trade policy, AND the free movement of the factors of production (ex MERCOSUR)

A

a common market

97
Q

What is the free flow of products and factors of production between members, a common external trade policy, a common currency, a harmonized tax rates, and a common monetary and fiscal policy (i.e. the EU)

A

An economic union

98
Q

What involves a central political apparatus that coordinates the economic, social, and foreign policy

A

a political union

99
Q

What are the five levels of economic integration?

A

a free trade area, a customs union, a common market, an economic union, a political union

100
Q

What are the main pros/vs cons of economic integration?

A

gains- free trade investment, increased dependency (more political clout), incentives for cooperation
cons- national sovereignty may be undermined, more trade may just be diverted vs created.

101
Q

What are the two trade blocs in Europe?

A

EU (27 members), and European Free Trade Area (4 members)

102
Q

What are the five major institutions of the EU?

A

European Council - resolves policy issues
European Commission- implements aspects of EU law and monitors member states.
Council of the EU- ultimate controlling authority
EU parliament- debates legislation
Court of Justice- supreme appeals court for EU laws.

103
Q

How did the EU has created the second largest currency zone in the world after that of the U.S. dollar

A

by adopting the euro

104
Q

What are euro advantages?

A

conversion, transparency, liquidity, scale economy, strategic.

105
Q

What is a continuation of NAFTA to promote/protect free trade between the 3 countries that make up N.A?

A

USMCA

106
Q

What are the differences between the USMCA and NAFTA?

A

-Building labor protections in Mexico
-Reducing protections for pharmas
-Increasing protections for technology firms:
-Incentivizing to keep production in NA (v. EU / Asia)
-Dismantling a controversial arbitration system, Investor-State Dispute System (ISDS), which enabled companies to sue governments

107
Q

was formed in 1969 using the EU model
had more or less failed by the mid-1980s
was re-launched in 1990, and now operates as a customs union
signed an agreement in 2003 with MERCOSUR to restart negotiations towards the creation of a free trade area

A

The andean pact

108
Q

originated in 1988 as a free trade pact between Brazil and Argentina
was expanded in 1990 to include Paraguay and Uruguay
has been making progress on reducing trade barriers between member states
may be diverting trade rather than creating trade, and local firms are investing in industries that are not competitive on a worldwide basis

A

MERCOSUR

109
Q

What did CARICOM do?

A

establish a customs union

110
Q

What was the Free Trade Of The Americas?

A

Talks began in April 1998 to establish a Free Trade of The Americas (FTAA) by 2005, it failed, if it DID go through it would have major implications

111
Q

What agreement did this?
was formed in 1967
to foster freer trade between member countries and to achieve some cooperation in their industrial policies

A

The Association of Southeast Asian Nations (ASEAN):

112
Q

What agreement is this?
21 members including the US, Japan, and China
about 2.94 B. people (38% of the world population)
an economic output of 51,820.72 trillion USD annually (61.1% of the global economy)

A

The Asia-Pacific Economic Cooperation (APEC):

113
Q

What agreement is a “21st century one”

Currently with 12 participating countries on both sides of the Pacific having:
Combined population of 800 million
GDP of $28 trillion (40% of global GDP)
$9 trillion in merchandise trade; $2 trillion trade of services (30% of world trade)

A

Trans-Pacific Partnership (TPP)

114
Q

What agreement is this?
the U.S. withdrew from the agreement soon after the election of president Trump,
Japan: leading role Jan ’18, CPTPP (22 measures favored by the US, but contested by other signatories, were suspended)
UK: new applicant
CN: announced Interest

A

CPTPP

115
Q

What trade agreement has a membership fee, originating country had a large trade deficit with EU, wanted to be free of EU regulations, can limit imigration

A

Brexit

116
Q

What agreement is this?
Started negotiation in 2012, reached agreement in Nov 2020 by 15 countries
1/3 of world’s pop.
30% of global GDP

A

RCEP - regional comprehensive economic partnership

117
Q

NAFTA is an example of a(n)
a) Free trade area
b) Customs union
c) Common market
d) Economic union

A

a) Free trade area

118
Q

All barriers to the free flow of goods and services between member countries are removed, and a common policy toward nonmembers is established in a
a) Free trade area
b) Customs union
c) Common market
d) Economic union

A

b) Customs union

119
Q

When higher cost suppliers within the free trade area replace lower cost external suppliers
a) The bloc as a whole benefits
b) There is trade creation
c) There is trade diversion
d) External suppliers benefit

A

c) There is trade diversion

120
Q

_______ is the ultimate decision making body of the European Union.
a) Council of the European Union
b) European Parliament
c) Court of Justice
d) European Commission

A

a) Council of the European Union

121
Q

_______ is responsible for proposing EU legislation.
a) Council of the European Union
b) European Parliament
c) Court of Justice
d) European Commission

A

d) European Commission

122
Q

Successful international managers need ____ _____ _______ an understanding (of each other) of how cultural differences across and within nations can affect the way in which business is practiced

A

cross-cultural literacy -

123
Q

What is a system of values and norms that are shared among a group of people

A

culture

124
Q

What are are the social rules and guidelines that prescribe appropriate behavior in particular situations

A

norms

125
Q

a group of people with shared values & norms

A

society

126
Q

Values and norms from an evolutionary process of a number of factors including
(History)
religion,
social structure, and
language and

A

societal culture

127
Q

A system of shared beliefs and rituals that are concerned with the realm of the sacred

A

religious system

128
Q

are a set of moral principles, or values, that are used to guide and shape behavior

A

ethical systems

129
Q

what Four religions dominate society

A

Christianity, Islam, Hinduism, and Buddhism

130
Q

What religion/philosophy is is also important in influencing behavior and culture in many parts of Asia

A

Confucianism

131
Q

world’s largest religion, mostly in Europe and the Americas (because of the Europeans), started the “protestant work ethic,” Max Weber argues that this ethic was a driving force of capitalism

A

Christianity:

132
Q

This is the world’s second largest religion- and also - all-embracing way of life that governs one’s being
key economic implication: people do not own property, only act as stewards for God
Fundamentalists: demand rigid commitment to religious beliefs and rituals, blame the West for many social problems

A

Islam

133
Q

practiced primarily on the Indian sub-continent
focuses on the importance of achieving spiritual growth and development, which may require material and physical self-denial
as such, there is not the same work ethic or focus on entrepreneurship found in some other religions

A

Hinduism

134
Q

has about 350 millions followers,
stresses spiritual growth and the afterlife, rather than
achievement while in this world

A

Buddhism

135
Q

an ideology practiced mainly in China
teaches the importance of attaining personal salvation through right action

A

Confucianism

136
Q

What are the 3 key teachings of Confucianism?

A

loyalty,
reciprocal obligations (do unto others), and
honesty
(may lead to a lower of cost of doing business in countries that are influenced by it)

137
Q

Societies are stratified on a hierarchical basis into what?

A

social categories, or social strata (distance),

138
Q

What is the spoken and unspoken means of communication

A

language

139
Q

Whare are these? the underlying thoughts and feelings that members of a culture take for granted and believe to be true.

A

shared assumptions

140
Q

What are the three aspects of non-observable culture?

A

shared assumptions, values, and norms

141
Q

What are the aspects of observable culture?

A

language and practices (such as taboos and rituals), symbols and socialization

142
Q

behaviors that are forbidden in the culture.

A

Taboos

143
Q

elaborate and formal activities designed to generate strong feelings. Usually they are carried out as special events.

A

ceremonies

144
Q

anything visible (tangible) used to represent an abstract shared value or something having special meaning

A

symbols

145
Q

a systematic process by which new members are brought into a culture through
role modeling,
teaching,
coaching, and
enforcement by others in the culture.

A

socialization

146
Q

Geert Hofstede identified four dimensions of culture

A

power distance, individualism versus collectivism (already covered), and style
uncertainty avoidance, and
masculinity versus femininity

147
Q

What is how a society deals with the fact that people are unequal in physical and intellectual capabilities

A

Power distance

148
Q

what is the relationship between the individual and his/her fellows

A

individualism vs collectivism

149
Q

the extent to which a culture accepts ambiguous situations and tolerating ambiguity (Guidance v. Micro-manage

A

uncertainty avoidance

150
Q

what is the relationship between gender and work roles

A

masculinity vs femininity

151
Q

what is instant enjoyment v. regulating along social norm

A

indulgence

152
Q

a dimension to address Confucian dynamism capturing attitudes toward time

A

long-term orientation

153
Q

Who theorized the following? Culture is a living thing, consisting of elements inherited from the past, outside influences, which have been embraced and new elements invented locally

A

Thierry Verhelst (1994)

154
Q

What are the differences between the East and West as it relates to dimensions of culture?

A

Rational (west)
Relationship/Guanxi (East)

155
Q

a belief in the superiority of one’s own culture

A

ethnocentric behavior

156
Q

Abstract ideas about what a group believes to be good, right, and desirable are called
a) norms
b) values
c) folkways
d) mores

A

b) values

157
Q

The basic social organization of a society is its
a) culture
b) social strata
c) social structure
d) caste system

A

c) social structure

158
Q

The group is the primary unit of social organization in
a) Japan
b) the United States
c) Switzerland
d) Mexico

A

a) Japan

159
Q

The most widely spoken language in the world is
a) Chinese
b) Spanish
c) Hindi
d) English

A

d) English

160
Q

Which of the following is not characteristic of individualism?
a) individual achievement
b) low managerial mobility
c) low company loyalty
d) entrepreneurial behavior

A

b) low managerial mobility

161
Q

Which religion promotes the notion that a moral force in society requires the acceptance of certain responsibilities called dharma?
a) Islam
b) Buddhism
c) Hinduism
d) Confucianism

A

c) Hinduism

162
Q

_______ focuses on how society deals with the fact that people are unequal in physical and intellectual capabilities.
a) power distance
b) individualism versus collectivism
c) uncertainty avoidance
d) masculinity versus femininity

A

a) power distance

163
Q

) brings in, possibly, questionable practices in business, but questionable practices in international business does not stop there

A

guanxi

164
Q

what are two reasons for setting up operations overseas?

A

market and production

165
Q

accepted principles of right or wrong that govern the conduct of a person, the members of a profession, or the actions of an organization

A

ethics

166
Q

a strategy that does not violate accepted principles

A

ethical strategy

167
Q

what are three ethical dilemmas

A

corruption, human rights, environmental

168
Q

situations in which none of the available alternatives seems ethically acceptable

A

ethical dilemmas

169
Q

what is it called when business should take the social consequences of economic actions into account when making business decisions, and should be in favor of decisions that have both good economic and good social consequences

A

social responsibility

170
Q

Reasons why managers behave unethically include what?

A

persona, decision making processes, cultural, leadership, unrealistic performance expectations

171
Q

What are the four common straw men fallacies?

A

the friedman doctrine, cultural relativism, the righteous moralist, the naive immoralist

172
Q

only social responsibility is to increase profits, so long as the company stays within the rules of law

A

Friedman doctrine

173
Q

ethics are culturally determined and that firms should adopt the ethics of the cultures in which they operate.

A

cultural relativism

174
Q

a MNC’s home standards should be followed in host countries

A

the righteous moralist

175
Q

if other firms are not following ethical norms in a host nation, expat managers should not either

A

naive immoralist

176
Q

What ethical framework involves the following? moral is determined by their consequences
Actions are desirable if they lead to the best possible balance of good consequences over bad consequences
Problems: measuring the benefits, costs, and risks of an action, and “just”?

A

utilitarian

177
Q

What ethical framework involves the following:
people should be treated as ends and never purely as means to the ends of others (treating other humans… right)

A

Kantian

178
Q

What are these?
human have fundamental rights and privileges… transcend national boundaries and cultures
establish a min. level of morally acceptable behavior, irrespective of the culture

A

Rights theories

179
Q

What are these?
the attainment of a just distribution of goods and services
John Rawls (1921 – 2002): all economic goods and services should be distributed equally except when an unequal distribution would work to everyone’s advantage

A

Justice theories

180
Q

What are the 5 Steps of Ethical Decision Making?

A

Identify which stakeholders would be affected and how

determine whether a proposed decision would violate the fundamental rights of any stakeholders

establish moral intent (the bus. must resolves to place moral concerns > other concerns when there may be violation(s) of fundamental rights of stakeholders

The company engages in ethical behavior (execute)

The business audits its decisions, reviewing them to make sure that they were consistent with ethical principles

181
Q

What gives employees the integrity to go public and blow the whistle on persistent unethical behavior in a company, walk away when something is unethical, and to say no to a superior when told to do something wrong?

A

moral courage

182
Q

Which is not an area where multinational firms are concerned about ethics?
a) Human rights
b) Trade regulations
c) Environmental regulations
d) Corruption

A

b) Trade regulations

183
Q

All of the following except ____ contribute to unethical behavior by international managers.
a) Decision-making processes
b) Leadership
c) Personal ethics
d) National culture

A

d) National culture

184
Q

According to ________, a company’s home-country standards of ethics are the appropriate ones to follow in foreign countries.
a) the righteous moralist
b) the naïve immoralist
c) the Friedman doctrine
d) cultural relativism

A

a) the righteous moralist

185
Q

________ recognize that human beings have fundamental rights and privileges which transcend national boundaries and cultures.
a) Kantian ethics
b) Utilitarian approaches
c) Straw men
d) Rights theories

A

d) Rights theories

186
Q

The _____ suggests that everyone is imagined to be ignorant of all his or her particular characteristics.
a) tragedy of the commons
b) veil of ignorance
c) code of ethics
d) the Universal Declaration of Human Rights

A

b) veil of ignorance

187
Q

What is a company’s formal statement of ethical priorities called?
a) Mission statement
b) Code of ethics
c) Code of values
d) Organizational culture

A

b) Code of ethics

188
Q

what happens When conventional means of payment are difficult, costly, or nonexistent

A

countertrade

189
Q

Which of the following is not a common pitfall of exporting?
a) a product offering that is customized to the local market
b) a poor understanding of competitive conditions in he foreign market
c) poor market analysis
d) problems securing financing

A

b) a poor understanding of competitive conditions in he foreign market

190
Q

Which of the following is not a purpose of the bill of lading?
a) It is a contract
b) It is a document of title
c) It is a form of payment
d) It is a receipt

A

c) It is a form of payment

191
Q

Countertrade is attractive for all of the following reasons except
a) It may involve the exchange of unusable or poor-quality goods that the firm cannot dispose of profitably
b) It can give a firm a way to finance an export deal when other means are not available
c) It can be a strategic marketing weapon
d) It can give a firm an advantage over firms that are unwilling to engage in countertrade arrangements

A

b) It can give a firm a way to finance an export deal when other means are not available

192
Q

when a firm invests directly in facilities to produce and/or market in a foreign country, also an alternative to trade

A

Foreign direct investment

193
Q

what type of investments are theses? new operation in a foreign country

A

greenfield

194
Q

What can FDI be? (two things)

A

greenfield investments, acquisitions or mergers with existing firms in host nation

195
Q

globalization of the world economy is having a _______ __________ on FDI as firms ensures significant presence in many regions of the world

A

positive impact

196
Q

What two countries lead in FDI?

A

USA and China

197
Q

capital invested in factories, stores, office buildings, etc.

A

Gross fixed capital formation

198
Q

Firms prefer to acquire existing assets because

A

-M&A are quicker to execute
easier and perhaps less risky for a firm to -acquire desired assets than build them from the ground up
-firms believe that they can increase the efficiency of an acquired unit by transferring capital, technology, or management skills

199
Q

FDI is shifting away from extractive industries and manufacturing, and towards services, due to

A

developed countries are moving towards services, many services need to be produced where they are consumed (market)
a liberalization of policies governing FDI in services
the rise of Internet-based global telecommunications networks

200
Q

producing at home, then shipping to the receiving country

A

exporting

201
Q

granting a foreign entity the right to produce and sell the product in return for a royalty fee

A

licensing

202
Q

what are three drawbacks of licensing?

A

giving away know-how to a potential foreign competitor
no control over manufacturing, marketing, and strategy
when the firm’s competitive advantage is based on the management, marketing rather than product and manufacturing capabilities

203
Q

who theorized that FDI flows are a reflection of strategic rivalry between firms in the global marketplace

A

Knickerbocker

204
Q

who theorized that firms FDI flow = based on particular stages of the PLC, i.e. invest in

A

Vernon

205
Q

The Eclectic paradigm involves what?

A

location-specific advantages, and externalities -( knowledge spillovers)

206
Q

What political ideology view is this: MNE is a tool of the capitalist-imperialist home countries for exploiting host countries

A

Radical view (Marxist)

207
Q

What political ideology view is this: international production: based on comparative advantage

A

Free market view

208
Q

What political ideology viewpoint is this: FDI has benefits and costs
FDI should be allowed only if the benefits outweigh the costs

A

Pragmatic nationalism

209
Q

What are FDI host country benefits?

A

resource transfer effects (capital supply, employment, consumer access to products), Balance of Payment effects (import decrease, export may increase depending on conditions)

210
Q

Host Country Costs

A

adverse effects on balance of payments (outflow of capital as subsidairy repatriates earnings), debit if subsidiary imports large # of its inputs from abroad. Perceived loss of national sovereignty (key decision might be made by a foreign parent that has no real commitment to host country)

211
Q

Home Country Benefits?

A

Inward flow of foreign earnings. employment effects, skills from foreign markets can subsequently be transferred back to home country

212
Q

What two things can governments do related to outward FDI?

A

Encourage outward FDI (with gov backed insurance programs to cover risk), restrict outward FDI (limiting capital outflows, manipulating tax rules or prohibiting FDI)

213
Q

What two things can governments do related to inward FDI?

A

Encourage inward FDI (through financial means- taxation, well established infrastructure, stability), restrict inward FDI through use ownership restrains and performance requirements

214
Q

The amount of FDI undertaken over a given time period is known as
A) the flow of FDI
B) the stock of FDI
C) FDI outflow
D) FDI inflow

A

the flow of FDI

215
Q

Benefits of FDI include all of the following except
a) The resource transfer effect
b) The employment effect
c) The balance of payments effect
d) National sovereignty and autonomy

A

d) National sovereignty and autonomy

216
Q

Which of the following is not a cost of outward FDI for host countries?
a) the initial capital outflow required to finance the FDI
b) when FDI is a substitute for direct exports
c) gains from learning valuable skills from foreign markets
d) the effect on employment is FDI is a substitute for domestic production

A

c) gains from learning valuable skills from foreign markets

Global Business- Chung (1 decks)

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