International Business

Dr. O

Kettle Moraine Corporation sources goods and services for its gardening products from different locations around the globe in an attempt to take advantage of differences in the cost and quality of labor and land. This practice is an example of the

globalization of production.

National Tech Inc., a U.S.-based company, has productive activities in more than two countries. National Tech is what type of enterprise?

multinational

After trade barriers began to fall in the 1960s, what was the motivation for much of the foreign direct investment by non-U.S. firms?

desire to disperse production activities to optimal locations

What is acting as a deterrent for foreign firms wanting to do business with former communist nations of Eastern Europe and Central Asia?

signs of growing unrest and totalitarian tendencies seen in these countries

Which statement reflects a general implication of globalization?

The COVID-19 pandemic called into question the wisdom of relying on globally dispersed production systems.

Carlan bought his son, Ephron, a computer two years ago. Recently, he decided to buy his daughter, Betsy, a computer of her own. When applying Moore’s Law to the two-year gap between the purchase of the computers, it is most likely that

the microprocessor in Betsy’s computer would be more advanced in terms of power than that of Ephron’s.

During early globalization efforts, outsourcing was typically confined to __________blank activities.

manufacturing

An oil company recently moved its operations from Dallas, Texas, to Somalia. The decision to move was the result of new federal regulations regarding clean air standards that all petroleum corporations are subjected to. A critic of globalization would say this example demonstrates what concern?

Facilities in advanced nations are moving to less developed countries that have lower environmental regulations.

Which statement reflects the changing demographics of the global economy?

U.S. dominance in export markets has waned as Japan, Germany, and a number of newly industrialized countries have taken a larger share of world exports.

Marianne, a Swedish fashion designer, sells her merchandise by exporting it to retail stores in the United States, United Kingdom, and Brazil. According to this information, Marianne is participating in

international trade.

Those who support free trade recognize that while some concessions occur during the process, ultimately, it still works because

the benefits outweigh the costs.

Which scenario best demonstrates foreign direct investment?

• Luxury Linens, a fabric conglomerate in the United States, imports raw silk from China and Italy.

• Office Direct, a U.S.-based office furniture company, has built its own assembly plant in Japan to cater to the needs of the Asian market.Correct

• Veges Galore, a reputable vegetable plant company in Holland, exports tomato, pepper, and potato garden plants across the globe.

• Aleksandra started a Polish restaurant in her home country, the United States, after she took cooking lessons from a well-known chef in Poland.

Office Direct, a U.S.-based office furniture company, has built its own assembly plant in Japan to cater to the needs of the Asian market.

After the collapse of communism in Russia, successful business owners often had to pay "protection money" to the mafia or face violent retribution. In the context of property rights, the behavior of the mafia is an example of

private action.

Nations that limit the freedom of religious expression with laws based on religious principles follow the political system of

theocratic totalitarianism.

What is the central message of individualism?

Individual economic and political freedoms are the rules on which a society should be based.

In what type of economy are all businesses state-owned, the rationale being that the government can then direct them to make investments that are in the best interests of the nation as a whole rather than in the interests of private individuals?

pure command

Karl Marx believed that the way to correct the economic inequalities in a capitalist society was to

have state ownership as the basic means of production.

The __________blank system of a country encompasses the process through which redress for grievances is obtained.

legal

Which term best represents the relationship between the level of corruption and economic growth rate in a country?

inversely proportional

If a country wants to improve its attractiveness as a place for doing business and as an investment site, it should

move toward a market-based system.

While he was shopping for new clothes, Sankha noticed there was a sale on shirts by J. Crew. The J. Crew name is an officially registered __________blank in clothing.

trademark

In which of these situations is National Fiber Inc. using a grease payment?

National Fiber Incorporated made a small payment of $35 to speed up some paperwork related to tax issues in a developing country.

A composer can protect an original musical score from being copied and sold by someone else by acquiring a(n)

copyright.

Which situation illustrates public action?

• the mafia in a South American country demanding "protection money" from successful domestic business owners

• proprietors in the hospitality industry in a South American country complaining about protection rackets by criminal groups

• government bureaucrats demanding bribes from international businesses in return for the right to operate in a South American countryCorrect

• a South American government being criticized for its inability to curb theft of trade secrets of international businesses by private domestic owners

government bureaucrats demanding bribes from international businesses in return for the right to operate in a South American country

Which scenario is an example of private action?

Multiple Choice

• the government of Canada levying excessive taxes

• the Brazilian government requiring expensive licenses or state permits from private property holders

• a communist government taking assets into state ownership without compensating the owners

• government bureaucrats demanding bribes from businesses in return for the rights to operate manufacturing facilities in a country

• business owners in the interactive video industry stealing their competitors' trade secrets and intellectual properties

business owners in the interactive video industry stealing their competitors' trade secrets and intellectual properties

According to the Human Development Index, average income adjusted for PPP should be sufficient to

provide basic needs such as food and shelter.

Samuel Huntington held the opposite view from Fukuyama and believed that the modernization of non-Western societies can result in

a retreat toward the traditional.

The deregulation of an economy involves

privatizing state-owned enterprises.

Economist Jeffrey Sachs argues that __________blank, with their long engagements in international trade, have been the most supportive of market institutions throughout history.

coastal states

Gross domestic product per person figures should be carefully evaluated because they don’t take into account differences in

the cost of living.

Generally, the costs and risks associated with doing business in a foreign country are typically lower in

economically advanced countries.

A country that is classified as having low human development (the quality of life is poor) would have an HDI that is

less than 0.55 on the HDI scale.

A(n) __________blank risk occurs when a trading partner opportunistically breaks a contract or expropriates property rights.

legal

Charles loves to invent new products but knows that in his country it is difficult for him to reap the rewards of innovations because they are quickly and legally copied by others after he releases them into the marketplace. As a result, Charles has decided to stop inventing. What is preventing Charles from doing what he loves?

weak property rights protection

When a country sells a state-owned monopoly, such as the telecommunications system, to private investors, it is an example of

privatization.

An African nation is facing a high rate of inflation and the government debt in the country is also high. As a result, the country's business environment is beginning to deteriorate, and the profits of the business enterprises are hurt. According to this information, companies doing business here are facing what type of risk?

economic

A company is considering doing business in Central America but is concerned that some governments have been accused of corrupt practices. What aspect of the overall attractiveness of doing business in Central America does this represent?

costs

In a Confucian culture, it would be common for a superior to reward the loyalty of a subordinate by best owing blessings on him or her. These blessings are examples of

reciprocal obligations.

When interacting with a Japanese business counterpart, Lafayette made it very clear that the American way of making the product was superior, implying that the Japanese way of doing business was inferior. Lafayette was demonstrating

ethnocentrism.

A group of people who share a common set of values and norms is called a(n)

society.

In one country, citizens are restricted from moving out of the stratum they are born into. Also, individuals are allowed to engage only in the same occupation as their parents. The system of social stratification being practiced is a __________blank system.

caste

Some sociologists argue that __________blank has a more rigid class structure than other Western societies, including the United States, because of its historical division into three main classes: upper, middle, and working.

the United Kingdom

What would be a traditional value in a motivation toward achievement and success culture?

high performance

The distinctive culture of a small country has been losing its relevance among the citizens of the country. This is because the people of this country are extensively adopting certain universally accepted values and norms. This behavior of these citizens demonstrates

the convergence hypothesis.

In a society, actions of people directed toward one another are governed by a set of social rules called

norms.

A high degree of managerial mobility in societies that emphasize individualism can lead to

lack of company-specific experience, knowledge, and a network of contacts among managers.

In Marta’s company, senior officers eat in the same cafeteria as the entry-level workers. On a trip to an office of the company in Brazil, she was surprised to find that the company had different cafeterias for managers and workers as well as different parking lots. The difference that Marta perceived can be attributed to which of Hofstede's dimensions?

power distance

What is one difference between folkways and mores?

Violating mores tends to bring more serious retribution than violating folkways.

Michel has been asked by his manager to directly contact the CEO of the foreign company they are trying to do business with. However, Michel knows that this is not a socially acceptable practice there, and it is better to wait for the company to contact him. Which aspect of culture is guiding Michel’s decision?

norms

When compared to American society, some argue that Japanese society is less supportive of

entrepreneurship.