International Business Test 1

Precedent

A rule set by a judge in an old court case. When a new, similar case comes up, judges use that old rule to make sure their new decision is fair and consistent. 

Foreign corrupt practices act

makes it illegal for U.S. citizens, companies, and certain foreign entities to bribe foreign government officials to win or keep business. 

Political Risk

is the chance that political decisions, events, or instabilities in a country will significantly hurt a business's profits or ruin the value of an investment.

Expropriation

government seizes private property with providing financial compensation 

Confiscation

government seizes private property without providing financial compensation 

Localization

adapting a product to meet the specific requirements of a country 

Nationalization

governments transforms a privately owned business into public assets under state control 

Power distance measures

How much a society accepts inequality between people 

Large power distance

everyone has a rightful place. It’s a natural part of society. 

Small Power distance

equal rights, minimized inequality  

Ethnocentricity

Thinking your culture is superior  

Cultural literacy

Having detailed knowledge of a culture that allows you to function effectively within it 

Centrally planned economy

government has total control 

Mixed economy

blends free-market forces with government intervention and public services 

Market economy

entirely on supply and demand with no government control 

High uncertainty avoidance=

prefer rules/security 

- Japan or Greece 

Low uncertainty avoidance

comfortable with change 

- USA or Denmark 

Copyright

Prevents others from copying, performing, or redistributing your work 

Patent

Prevents others from your invention 

Civil Law

Think of Civil Law as a system built from the top down. Laws are created exclusively by lawmakers writing comprehensive legal codebooks. When a problem goes to court, the judge does not care about past cases; they simply open the codebook, find the exact written rule that applies, and enforce it. 

Common law

Think of Common Law as a system built from the bottom up. Laws are continuously created and refined by judges sitting in courtrooms. When a judge makes a ruling on a new problem, that decision becomes a permanent rule (precedent) that other judges must follow in the future 

Born Global Firm

A company that adopts a global perspective and engages in international business from the beginning  

Which of the following is NOT a part of the political economy? 

1. Political system 

2. Economic system 

3. Legal system 

4. Culture 

Culture

Which of the following is an example of trademark infringement? 

1. Manufactures who sell different versions of their own products in different countries 

2. Manufacturers who sell counterfeit products under the names and logos of more famous brands  

3. A company which exports factory rejects to developing countries  

4. A company which sells products at half the price of their competitors  

2. Manufacturers who sell counterfeit products under the names and logos of more famous brands  

Konesia is a country whose political leaders do not tolerate opposing viewpoints and often suppress or punish dissidents. The lives of Konesians are tightly controlled by its rulers. Which of the following political systems prevails in the country? 

1. Totalitarianism 

2. Democracy  

3. Anarchism 

4. Pluralism  

1. Totalitarianism 

Sally, a social worker from the United states, has been stationed in Konesia for a year. She notices several things about the Kinosian society; the people who report to her, for example, do so with an excessive amount of submissiveness, and her superior seems to expect the same of her. Which of the following statements about konesia would be consistent with Hofstede’s framework? 
 

1. They work best in a informal environment 

2. Has a large power distance culture 

3. Society is primarily individualistic 

4. They Derive power from their entrepreneurial drive 

2. Has a large power distance culture 

A country characterized with low uncertainty avoidance and low masculinity will 

1. Place a premium job security and career progression for both men and women 

2. Support stringent managerial control and competition between men and women 

3. Be less resistant to change and less distinguishing between men and women in the same job 

4. Have a strong need for rules and exertion of power in the society and gender egalitarianism 

3. Be less resistant to change and less distinguishing between men and women in the same job 

Tom, who works for a multinational company, is often put in teams consisting of people from different cultures. Tom finds it difficult to function in these terms because unlike the others, he comes from a culture where building his personal “brand” is emphasized. Toms culture emphasizes 

1. Individualism  

2. Ethnocentrism  

3. Collectivism  

4. Polycentrism  

5. Mult centrism  

1. Individualism  

Which of the following best illustrates the globalization of production? 

1. Daily diamonds, an American jewelry manufacturer, buys diamonds from south Africa and exports them to India for the cutting process 

2. Silver Unicorn Inc uses sales personal from the respective host country to sell its products and services  

1. Daily diamonds, an American jewelry manufacturer, buys diamonds from south Africa and exports them to India for the cutting process 

Which of the following is an example of globalization of production? 

1. Canadian consumers who import food products for Australia  

2. A German Company which sells car components to British car makers  

3. A U.S company that builds a computer hardware manufacturing system in India 

4. A Swiss watch manufacturer that builds a manufacturing facility in Switzerland  

3. A U.S company that builds a computer hardware manufacturing system in India 

4. 
   

Globalization is criticized because it ___ 

1. Does not generate labor market flexibility in developing nations  

2. Prevents developed countries from outsourcing work to developing nations 

3. Creates fewer manufacturing jobs in developing nations  

4. Exploits workers in low-wage nations 

4. Exploits workers in low-wage nations 

Globalization

the growing interdependence of the worlds economies, cultures, and populations driven by cross border trade, technology, and investment