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Business Globalization > limbiks_D080 Pre-Assessment Questions and Answers.docx > Flashcards

limbiks_D080 Pre-Assessment Questions and Answers.docx Flashcards

1
Q

A company wants to reduce the effects of currency fluctuations with its host country subsidiaries for the coming year.
Which action should the company take?

A

Use a forward contract

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2
Q

How do banks and investors use financial statements?

A

To decide whether to grant access to money

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3
Q

What is an example of a micro risk for multinational companies?

A

Government nationalization of assets

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4
Q

A company’s distribution channel consists of a producer, a distributor, a retailer, and a consumer.
What is a distribution channel with this structure called?

A

Indirect

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5
Q

A new start-up company wants to connect directly with its consumers.
How many layers of intermediaries should the company consider?

A

0

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6
Q

What is an advantage of using intermediaries in an indirect distribution channel?

A

It reduces up-front costs with the use of an existing channel

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7
Q

A company is evaluating where it will locate its next facility to minimize its distribution shipping costs.
Which factor must the company consider as part of this decision?

A

Value-to-weight ratio

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8
Q

For which concern has the World Trade Organization been criticized?

A

Adoption of labor standards protecting labor rights

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9
Q

What is a major drawback to the home country when companies outsource manufacturing jobs to countries with lower worker wages?

A

Loss of manufacturing jobs

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10
Q

Negative outcome on political systems from globalization?

A

Isolationist policies

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11
Q

A multinational beverage company decides to export products into a new market in order to grow its business. Exporting products was determined to be one of the cheapest methods of market entry for this company; however, the company realizes there are some disadvantages to exporting.
Which challenge is this company likely facing by exporting its products?

A

Costs of transporting goods are high.

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12
Q

Which organizational structure is common in international high-tech and engineering firms that have projects of limited lengths of time where employees can be put on different teams to maximize ingenuity?

A

Matrix

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13
Q

An international company has employees divided into departments related to designated areas of the business, such as marketing, production, human resources, information technology, and customer service.
What is the organizational structure of this company?

A

Functional

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14
Q

Which organizational structure helps increase employee creativity?

A

Teams

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15
Q

Factor resulting in higher rate of globalization?

A

Reduced trade barriers

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16
Q

What type of departmentalization does the appliance company use?

A

Product

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17
Q

Which form of funding requires a low cost of capital and does not require time to mature?

A

Loans

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18
Q

A senior manager from the head office of a company based in the United States is assigned to work in its overseas office in Indonesia where the significant emphasis is placed on workplace harmony. The manager ensures that the local culture and language are understood and is often perceived as an insider who follows the normal traditions.
How will the cultural dimensions of the local country influence the manager’s evaluation?

A

The senior manager would be given a very favorable performance evaluation.

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19
Q

What market entry strategy assumes significant risk?

A

Greenfield venture

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20
Q

Impact of Islamic law on businesses?

A

Forbids charging interest.

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21
Q

A company wants to hold a direct operating presence in a foreign country, so it buys a company in the target country and runs the operations
Type of business agreement for direct operating presence?

A

Subsidiary

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22
Q

A company would like to have a direct operating presence in a foreign country. The company is concerned about being exposed to the highest levels of risk and a slow market entry.
Which entry strategy is the company concerned about?

A

Subsidiary

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23
Q

Two countries agree to open their borders to international business trans actions with one another without tariffs. How does this affect global business?

A

Leads to developing free trade policies with strategic partners

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24
Q

Which national cultural dimension refers to the amount of ambiguity a society is willing to accept?

A

Uncertainty avoidance

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25
Q

A U.S. capital investment firm is researching new markets to enter to diversify its portfolio. The director of foreign investments presented a pitch to the board of directors encouraging entry into the Costa Rican telecommunications market by investing in local companies in the region through acquisition.
Which alliance supports this director’s suggestion?

A

Central American Free Trade Agreement

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26
Q

The United States-Mexico- Canada Agreement (USMCA), a modification of the North American FreeTrade Agreement (NAFTA), broadened the scope of free trade between member nations and tightened restrictions in the region. Which regulation was established by this new agreement?

A

Almost half of all automobile parts must be made by a labor force that earns a minimum of $16 per hour by 2023.

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27
Q

Country A and Country B are trying to mend their relationship. A company from Country A would like to invest in a company in Country B. Which action by Country B will help these two countries meet their goal?

A

Provide tax exemptions

28
Q

What is a purpose of a country implementing trade protectionism?

A

To protect an infant industry

29
Q

Two countries decide to open up trade with each other. What is likely to happen when trade opens up?

A

Jobs will increase in comparative advantage industries.

30
Q

Countries A and B participate in trade agreements that allow free trade among participant countries. However, Country A imposed quotas on several imported products to protect its domestic products. What is the effect, if any, on the domestic prices of these products?

A

Increases

31
Q

What is a key feature of a Customs Union?

A

Unified trading policies with non-members

32
Q

What is a drawback of creating regional trade agreements?

A

They shift employment opportunities

33
Q

An individual is encouraged to provide a small, quiet fee to local officials to get some critical work done overseas for a global office. The individual was told that this would greatly expedite the work. The individual took that advice, and the work was completed, but the manager in the United States was upset with the action and called the individual to discuss the matter.
What is the most challenging aspect of this individual’s ethical dilemma?

A

Ethical behaviors are not standardized across the world.

34
Q

A CEO of a multinational corporation tells employees that they are expected to follow the organization’s values, remember the mission, and adapt behaviors to be in alignment with the vision and mission, regardless of the situation.
Which ethical standard is being stressed by this company?

A

Code of ethics

35
Q

A company would like to expand its corporate social responsibility (CSR) initiatives to a global level.
Which strategy should the company use to meet this goal?

A

Engage stakeholders on the issue of air quality

36
Q

A business is entering a global market at the same time it has been trying to improve its level of corporate social responsibility (CSR).
Which CSR goal should this company remember during this process?

A

Increase shareholder trust via high ethical standards

37
Q

An international company’s consumers are demanding that the owners make socially ethical business decisions concerning their packaging, but the company is finding that the suggested green modifications are increasing the costs of producing the product.
Which concern is this company facing by meeting these ethical demands?

A

Decreased profitability

38
Q

A firm based in Country A manufactures its products in Country B and pays the manufacturing employees in the currency in which they are located.
Which currency situation will result in the maximum profit for the firm?

A

The currency in Country A is strong relative to the currency in Country B.

39
Q

Drawback of regional economic integration?

A

Increased exclusive internal trade

40
Q

Factor contributing to monopoly creation?

A

Control of natural resources

41
Q

Convention providing gap fillers for agreements?

A

Contracts for the International Sale of Goods

42
Q

Laws violated by price-fixing and monopolization?

A

Anti-trust

43
Q

What was the CEO’s message to employees?

A

Follow values, mission, and vision.

44
Q

What refers to people’s inclination to take care of themselves and their close circle?

A

Individualistic

45
Q

Four factors in Ghemawat’s CAGE analysis?

A

Culture, administration, geography, economy

46
Q

A multinational corporation (MNC) with headquarters in the United States is seeking to limit its supply chain to U.S. companies so that decision-making authority is localized at the highest level of the organization.
Result of using this decision-making structure?

A

Increased consistency

47
Q

Characteristic of a market economy?

A

Firms seek to maximize profits.

48
Q

What entry strategy is the company using?

A

Exporting

49
Q

What is the current focus of the World Bank?

A

Improving quality of life

50
Q

What strategy encourages adding a location in an overseas country?

A

Decentralized manufacturing

51
Q

For which concern has the World Trade Organization been criticized?

A

Labor standards

52
Q

What maintains the same branding in multiple foreign markets?

A

Global branding

53
Q

What is the impact of this infrastructure on trade?

A

Creates barriers to entry for other nations

54
Q

A company has entered several foreign markets and maintains the same branding in all of them.
What is the term for this marketing strategy?

A

Standardization

55
Q

What was the most challenging aspect of the ethical dilemma for the individual?

A

Ethical behaviors differ worldwide.

56
Q

Impact of traditional economic system on globalization?

A

Disadvantage due to lower living standards.

57
Q

What issue causes delays for the company?

A

Frequent bad weather

58
Q

How is the Special Drawing Right of the IMF valued?

A

Based on five currencies

59
Q

Which national cultural dimension refers to acceptance of hierarchy?

A

Power distance

60
Q

What was the economic impact of the North American Free Trade Agree ment (NAFTA)?

A

Shift of US jobs to Mexico

61
Q

What does a multinational beverage company decide to export products into a new market?

A

to grow its business

62
Q

A multinational company hires a distributor to manage the distribution of products in a new international market that it recently entered. Which entry strategy is the company using?

A

Exporting

63
Q

Where is the significant emphasis placed on?

A

workplace harmony

64
Q

Which institution helps to maintain availability of global financing to solve trade deficit issues?

A

International Monetary Fund

65
Q

What does the manager ensure that the local culture and language are understood and is often perceived as an insider who follows?

A

the normal traditions

66
Q

A company that is located in Country A would like to sell products in Country B. The government of Country B is pushing for a tariff-based international trade agreement on the product. What is the reasoning behind Country B’s decision?

A

Country B seeks to protect its economy and give it the opportunity for long-term expansion.

67
Q

What dimension of the local country influence the local country?

A

cultural dimensions

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