International Business Midterm 1 Chapter 1

When companies systematically engage in increasing the international dimension of their business activities it is known as​ ________.

internationalization

​________refers to the performance of trade and investment activities by firms across national borders.

International business

Which type of investment is the passive ownership of foreign securities for the purpose of generating financial​ returns?

International portfolio investment

Carol wants to expand her recycled toy business abroad because demand for recycled products is much higher in Europe and Asia than in the United States. After identifying suppliers in Europe and​ Asia, Carol establishes production facilities in Germany and Singapore.​ Carol's new production facility represents which type of international​ business?

Foreign direct investment

A​ macro-trend of intense economic interconnectedness among the nations of the world is called​ ________.

globalization

Which of the following is an example of​ cross-cultural risk in​ internationalization?

Language differences

If a firm is operating in a foreign​ country, what type of risk does it face from the​ country's political,​ legal, and economic​ environment?

Country risk

Procter​ & Gamble attributed decline in sales in 2022 and 2023 to the impact of the strong dollar. Which type of risk did Procter​ & Gamble​ face?

Currency risk

Custom​ Cars, a painting and auto modification​ company, has faced many challenges since expanding into South America where the legal system is very different. In one country for​ example, the local mayor informed the company that the firm will be shut down if taxes are not prepaid in cash. Which risk in international business is Custom Cars​ encountering?

Country risk

​Marcus, CEO of a battery startup​ company, is trying to decide whether to join forces with a foreign competitor in a country with a booming battery industry. The foreign competitor would bring much needed investment to​ Marcus' firm, but has a reputation of falling short of customer expectations. If Marcus decides to go ahead with the​ deal, even though doing so could damage his​ firm's reputation, Marcus will be taking on​ _______.

commercial risk

Education and healthcare are two examples of​ _________ in international business.

nongovernmental organizations

​Yemna, a recent business school​ graduate, loves​ adventure, so she is seeking a job in a foreign country to expand her sense of the world of business. She is being recruited by a company that has 50 employees and is looking to hire additional personnel to oversee the​ firm's initial foray into international​ markets, an exporting branch in Vietnam. What type of international business is recruiting​ Yemna?

Small enterprise

Pioneer Systems is a young entrepreneurial company that has engaged in international business from the day it opened its doors. Pioneer is categorized as a​ ________.

born global firm

A focal firm is a company that​ ________.

initiates international business transactions

​A(n) ______ acts like a travel agent but for​ cargo, arranging international shipping for exporters.

freight forwarder

Which motivation best explains the move by many U.S. companies to establish production facilities in China and export their products from China to the United​ States?

Firms can access labor and managerial talent at lower costs.

India is entering the global age and has a growing middle class. An Indian car manufacturer wants to offer a car for the average citizen of​ India, but does not have the technology available to create an inexpensive car that meets the laws that the Indian government is considering imposing. The company sets out to find a U.S. hybrid and electric car manufacturer that is willing to work with them. Why would a U.S. firm most likely​ agree?

To develop a network of people and increase business in the future

Companies primarily internationalize for the purpose of​ ________.

gaining a competitive advantage

What is the LEAST likely motive for international​ expansion?

Learning about a new culture

When Nissan opened its first factory in the United​ Kingdom, many Japanese auto parts suppliers​ followed, establishing their own operations there. This is an example of​ ________.

better serving clients that have moved into foreign markets

A business student in Texas is considering learning a foreign language. Why might she benefit from studying a language such as Russian or​ Chinese?

Both Russia and China feature​ fast-growing economies.

Which of the following is NOT a reason to study international​ business?

Global markets are decreasing.

Starbucks sells coffee sourced from a nonprofit organization that promotes the interests of the coffee growers. Why is this example important to you as a student of international​ business?

It demonstrates social responsibility and good environmental practices.

Which of the following is most important when traveling​ internationally?

Cultural awareness

Faced with declining sales in the​ U.S, what strategy has Harley Davidson​ adopted?

A focus on foreign markets.