Chapter 4--Managing in a Global Environment

Chapter 4--Managing in a Global EnvironmentStudent: ___________________________________________________________________________1.Business has become a unified, global field as trade barriers fall, communication becomes faster and cheaper, and consumer tastes converge.TrueFalse2.The multinational stage of corporate international development transcends any single home country. The ownership, control, and top management tend to be dispersed among several nationalities.TrueFalse3.The global stage of corporate international development is also referred to as the stateless stage.TrueFalse4.When Harbor Trades, a Korean-based company, makes resources including technology, managerial skills, and patent and trademark rights available to Nano Technologies, a Russian company whereby allowing Nano to make products similar to CBA, it is engaging in a countertrade agreement.TrueFalse5.The criterion traditionally used to classify countries as developed or developing is per capita income.TrueFalse6.Large international firms typically are called multinational corporations.TrueFalse7.The term top of the pyramid refers to the more than four billion people who earn the least, as defined by per capita income.TrueFalse8.Fifteen member states of the EU have adopted the rupee, as a single European currency.TrueFalse9.Culture shock refers to a person's ability to use reasoning and observation skills to interpret unfamiliar gestures and situations and devise appropriate behavioral responses.TrueFalse10.There are three components to cultural intelligence: cognitive, emotional, and physical.TrueFalse11.A tendency to regard their own culture as superior and to downgrade other cultures reflects an attitude called geocentric.TrueFalse12.An example of global outsourcing is seen when Gap, Inc uses low-cost Caribbean labor to cheaply produce its clothing, and then finishes off and sells its clothing in the United States.TrueFalse13.With exporting, the corporation transfers its products for sale and its production facilities in foreign countries.TrueFalse14.Seeking cheaper sources of materials or labor offshore is called offshoring.TrueFalse15.The least costly and least risky direct investment is called a greenfield venture.TrueFalse16.Direct investing means that the company is involved in managing the productive assets, which distinguishes it from other entry strategies that permit less managerial control.TrueFalse17.Countertrade is the barter of products for products rather than the sale of products for currency.TrueFalse18.To deal with the marketing of products in several countries individually, a company in the international stage often uses an international division.TrueFalse19.Licensing means engaging in the international division of labor so that work activities can be done in countries with the cheapest sources of labor and supplies.TrueFalse20.When a company builds a subsidiary from scratch in a foreign country it is called a greenfield venture.TrueFalse21.One advantage to acquiring a wholly owned foreign affiliate is that the company that acquires it would then have complete control.TrueFalse22.A form of direct investment is franchising.TrueFalse23.The goal of the European Union is to create a powerful single market system for Europes millions of consumers.TrueFalse24.The sub-divisions of the international environment are the economic, the sociocultural, and the legal-political environments.TrueFalse25.The basic management functions of planning, organizing, leading, and controlling are the same whether a company operates domestically or internationally.TrueFalse26.Because of cheap labor, most international business firms are headquartered in the less developed countries of Asia and South America.TrueFalse27.A multinational corporation typically receives more than 25 percent of its total sales revenues from operations inside the parent's home country.TrueFalse28.An MNC is managed as an integrated worldwide business system.TrueFalse29.The primary emphasis of polycentric companies is on their home countries.TrueFalse30.Geocentric companies are truly world-oriented and favor no specific country.TrueFalse31.A country's physical facilities that support economic activities make up its infrastructure.TrueFalse32.The estimated 2010 misery index figures suggest significantly less misery for almost every country as compared to figures at the beginning of the century.TrueFalse33.Market risk is defined as the risk of loss of assets, earning power, or managerial control due to politically based events or actions by host governments.TrueFalse34.The countries experiencing political stability face the greatest threat of violence.TrueFalse35.Unfortunately, many U.S. managers fail to realize that the values and behaviors that typically govern how business is done in the United States do not translate to the rest of the world.TrueFalse36.Countries that value high power distances normally have cities that are geographically separated and so have the need to transport electrical energy over large distances.TrueFalse37.The social value of uncertainty avoidance is evident in countries like Japan which support beliefs that provide stability and conformity among its citizenry.TrueFalse38.Collectivism means a preference for a tightly knit social framework in which individuals look after one another and organizations protect their members' interests.TrueFalse39.According to the GLOBE Project, a society with a high performance orientation places high emphasis on performance and rewards people for performance improvements and excellence.TrueFalse40.According to the GLOBE Project, gender differentiation refers to the extent to which a society maximizes gender role differences.TrueFalse41.Cultural intelligence refers to a person's ability to use reasoning and observation skills to interpret unfamiliar gestures and situations and devise appropriate behavioral responses.TrueFalse42.Social values greatly influence organizational functioning and management styles.TrueFalse43.According to the GLOBE Value Dimensions, Japan and Russia both have very high performance orientation.TrueFalse44.When an organization has a humanistic attitude, it values employees as an end in themselves.TrueFalse45.A high performance orientation means that a society encourages toughness, assertiveness, and competitiveness.TrueFalse46.A low-context culture is a culture in which communication is used to enhance personal relationships.TrueFalse47.A high-context interaction requires more time because a relationship has to be developed, and trust and friendship must be established.TrueFalse48.Ethnocentrism refers to a natural tendency of people to regard their own culture as superior and to downgrade or dismiss other cultural values.TrueFalse49.Ethnocentrism refers to a natural tendency of people to regard their own culture as inferior to other cultures.TrueFalse50.German, Swiss, and North American cultures are among the high-context cultures.TrueFalse51.The extent to which trade and investments, information, social and cultural ideas, and political cooperation flow between countries is called _____.A.standardizationB.industrializationC.globalizationD.internationalismE.linguistic pluralism52.Today's companies compete in a _____.A.growingly domesticB.low-context cultureC.high-context cultureD.Greenfield economyE.borderless world53._____ is a concept that proposes that corporations can alleviate poverty and other social ills by selling to the worlds poorest people.A.Cream of the cropB.Skimming the barrelC.Bottom of the pyramidD.Top of the peakE.Base hierarchy54.The Digitec company has recently decided to design and manufacture a laptop that retails for under $50, in an effort to make information technology available to people in places like rural Africa and rural India. This is known as what type of strategy? A.Bottom of the pyramid strategyB.Skimming the barrel strategyC.Cream of the crop strategyD.Top of the peak strategyE.Base price strategy55.Companies that think _____ have a competitive edge.A.globallyB.regionallyC.nationallyD.strategicallyE."customers first"56.In which stage, market potential is limited to home country, with all production and marketing facilities located at home?A.DomesticB.InternationalC.GlobalD.MultinationalE.Stateless57.Creative Coverings is a small interior design company owned and managed by Lisa Smith. Since the company was established seven years ago, Lisa has only worked with clients near her hometown in Maryland. Creative Coverings fits into which stage of globalization?A.DomesticB.Regional C.InternationalD.MultinationalE.Global58.In the _____ stage a company usually adopts a multidomestic approach.A.GlobalB.MultinationalC.StatelessD.InternationalE.Domestic59.Global Dandelion, with marketing and production facilities located in many countries, is participating at what stage in the international arena?A.International stageB.Global stageC.Domestic stageD.Multinational stageE.Interdomestic stage60.Quality-cast Telecom with an international division would be participating in what stage of the international arena?A.Domestic stageB.International stageC.Multinational stageD.Global stageE.Binational stage61.Stateless stage is also referred to as the _____ stage.A.multinationalB.globalC.multidomesticD.internationalE.domestic62.Color Copiers operates in a true global fashion, making sales and acquiring resources in whatever country offers the best opportunities and lowest cost, what stage of international development is it in?A.Stateless stageB.Multinational stageC.International stageD.Domestic stageE.Multidomestic stage63._____ places an emphasis on a worldwide perspective.A.Polycentric companiesB.Geocentric companiesC.Ethnocentric companiesD.Regiocentric companiesE.Domestic companies64.The process of globalization typically passes through all of the following stages except:A.domestic stage.B.global stage.C.international stage.D.interdomestic stage.E.multinational stage.65.Which of the following refers to engaging in the international division of labor so as to obtain the cheapest sources of labor and supplies regardless of country?A.FranchisingB.LicensingC.Market entry strategyD.OutsourcingE.Activity66.The Maquiladora industry along the Texas-Mexico border on the Mexico side uses cheap labor for assembling products. This lowers the price for U.S. consumers and is an example of:A.licensing.B.joint venture.C.outsourcing.D.franchising.E.none of these.67.Most firms begin with which strategy to enter foreign markets?A.ExportingB.Greenfield ventureC.Joint ventureD.AcquisitionE.Direct investment68.Which of the following is an entry strategy in which the organization maintains its production facilities within its home country and transfers its products for sale in foreign markets?A.FranchisingB.LicensingC.ExportingD.Greenfield ventureE.Joint venture69.What is exporting?A.CountertradeB.The barter of products for products, often used in developing nationsC.Items produced in the home country for sale in foreign marketsD.All of theseE.None of these70.Go RVing, a U.S. company, built a subsidiary from scratch in England. This is an example of:A.franchising.B.greenfield venture.C.joint venture.D.exporting.E.licensing.71.All of the following are components of cultural intelligence, except _____.A.physicalB.cognitiveC.emotionalD.analyticalE.all of these72.The Nissan plant in Mississippi is an example of a _____.A.greenfield ventureB.joint ventureC.direct investmentD.foreign affiliateE.direct acquisition73.Exporting, licensing, and direct investing are called _____ strategies because they represent alternative ways to sell products and services in foreign markets. A.globalizedB.expansionC.retrenchmentD.market entryE.concentrated business74.As a first step into international business, which two countries are most companies going to today?A.Russia and JapanB.Sweden and GermanyC.China and IndiaD.Brazil and PhilippinesE.Indonesia and Brazil75.____ is the most widespread approach to international involvement in China and India.A.ImportingB.ExportingC.ManufacturingD.OutsourcingE.Greenfield venture76.Heineken begins by exporting its product into new markets, and then ____ to a local brewer to establish its position in the market.A.countertradesB.licensesC.exportsD.franchisesE.markets77.Which of the following is a form of franchising?A.Direct investingB.LicensingC.ExportingD.CountertradeE.Barter trade78.CRL, a European plastics manufacturer, is considering forming an alliance with a U.S. military goods manufacturer to develop a new type of polymer that can be used for international industrial and military applications. Such a partnership represents what type of direct investment?A.FranchisingB.Joint VentureC.Wholly owned affiliateD.Greenfield ventureE.Outsourcing79.Your company is interested in producing and marketing a line of coffee that will penetrate the Chinese market. Your firm is willing to supply the equipment, products, product ingredients, trademark, and standardized operating system. What type of strategy are you going to use?A.Wholly owned foreign affiliateB.A greenfield venture agreementC.A franchiseD.An export agreementE.Barter trade80.Which of the following pairs of alternatives closely resemble each other in the amount of ownership, control and risk obtained in operating international businesses?A.Direct investment/franchisingB.Wholly owned foreign affiliate/countertradeC.Exporting/licensingD.Franchising/licensingE.All of these81.A foreign subsidiary over which an organization has complete control is called a:A.joint venture.B.licensing agreement.C.franchise.D.wholly owned foreign affiliate.E.foreign venture.82.The Write Pens, Inc. wants to reduce transferring costs by producing closer to the consumer in a foreign country. This will also help in reducing transportation and storage costs. Which strategy would be the best to use given the circumstances?A.FranchisingB.ExportingC.Direct investingD.Barter agreementE.Licensing83.Which of the following refers to the frustration and anxiety that result from constantly being subjected to strange and unfamiliar cues about what to do and how to do it?A.Societal chaosB.Civilization distressC.Culture confusionD.Societal disorderE.Culture shock84.The management of business operations conducted in more than one country is called:A.global management.B.international management.C.outsourcing management.D.planning management.E.domestic management.85.____ aspects of management do not change when doing business internationally.A.PlanningB.OrganizingC.ControllingD.LeadingE.All of these86.Language, values, religion, and education all describe which dimension in the international environment?A.EconomicB.LegalC.PoliticalD.SocioculturalE.Technological87.In international operations, the economic environment represents all of the following factors except:A.infrastructure.B.resource and product markets.C.laws and regulations.D.inflation.E.exchange rates.88.Resource development, infrastructure, and exchange rates all describe which dimension in the international environment?A.EconomicB.LegalC.PoliticalD.SocioculturalE.Technological89.In international operations, the economic environment includes:A.shared knowledge, beliefs and values.B.political risks.C.social organizations.D.infrastructure.E.tariffs, quotas, and taxes.90.Which of the following is a sociocultural factor in the international environment?A.LanguageB.Exchange ratesC.Tariffs, taxes, and quotasD.Per capita incomeE.Infrastructure91._____ is normally used to classify countries as developed or developing.A.Exchange ratesB.Interest ratesC.Gross national productD.Per capita incomeE.Inflation rates92.Your grocery store in India is having trouble getting the local farmers to supply you with the proper produce. This is a problem with India's:A.product market.B.resource market.C.infrastructure.D.economy.E.power distance.93.____ generally are located in Asia, Africa and South America.A.MNCsB.EUsC.LDCsD.WTOsE.MFNs94.Exchange rates are included in which of the following international environments?A.The legal-political sectorB.The economic environmentC.The sociocultural environmentD.The barter system environmentE.The government sector95.A form of exporting to less-developed countries is called:A.licensing.B.franchising.C.greenfield venture.D.joint venture.E.countertrade.96.A country's physical facilities that support economic activities make up its _____.A.resource marketsB.infrastructureC.physical marketsD.product marketsE.plants and equipment97.When the 2008 financial crisis began in the United States, it resulted in the collapse of the housing market and the failure of several large financial institutions. This crisis spread rapidly to the rest of the world. This example demonstrates which trend in the global economic environment?A.Economic development differs widely among countries of the world.B.Market demands differ for products and services throughout the world.C.Political instability is the primary result of economic failure.D.World markets are economically interconnected.E.Cultural factors have a greater impact on world markets than do economic factors.98.If you built a computer company in Africa and then found that your product was having difficulty being distributed to customers because of the road system, your problem would be related to:A.an inadequate infrastructure.B.an economy incapable of supporting growth.C.a poor resource market.D.a poor product market.E.none of these.99.The legal-political environment, in international operations, includes which of the following?A.Shared knowledge, beliefs and valuesB.Political risksC.Social organizationsD.InfrastructureE.None of these100.Political risk is defined as an organization's risk of _____ due to politically based events or actions by host governments.A.loss of assetsB.managerial controlC.earning powerD.all of theseE.managerial control and earning power only101.A company's risk of loss of assets, earning power, or managerial control due to politically based events or action by host government is referred to as:A.MFN.B.political risk.C.tariffs.D.political instability.E.terrorism.102.Rooftop International, Inc. buys insurance against host government takeover when investing in foreign countries. This is an example of which sector of the international environment?A.Legal-politicalB.SocioculturalC.TechnologicalD.EconomicE.Infrastructure103.Which of the following is NOT a legal-political factor in the international environment?A.Laws and regulationsB.LanguageC.Tariffs, quotas, taxesD.Political riskE.Government takeovers104.All of the following are considered emerging economies EXCEPT _____.A.BrazilB.RussiaC.IndiaD.ChinaE.Canada105.A foreign terrorist kidnaps your firm's marketing VP while the VP is in the host country. This is a harsh example of:A.economic development.B.infrastructure.C.political risk.D.international law.E.social risk.106.A.R.C. is a large non-profit humanitarian aid organization that has been forced to pull out of several African markets in recent years due to civil wars and large-scale violence. This demonstrates which frequently cited problem for international companies?A.Political instabilityB.Communist governmentsC.Economic instabilityD.Political riskE.Financial risk107.A nation's _____ includes the shared knowledge, beliefs and values, as well as the common modes of behavior and ways of thinking, among members of a society.A.power distanceB.cultureC.masculinityD.individualismE.uncertainty avoidance108.Which of the following companies place an emphasis on their home countries?A.PolycentricB.GeocentricC.EthnocentricD.GlobalE.Regiocentric109.Cultural factors in foreign countries are _____ the political and economic factors.A.easier thanB.similar toC.more perplexing thanD.less important thanE.none of these110._____ refers to the degree to which people accept inequality in power among institutions, organizations, and people.A.Power distanceB.Uncertainty avoidanceC.IndividualismD.CollectivismE.Masculinity111.Countries whose social values reflect low power distance:A.are highly democratic.B.accept inequality in power among institutions, organizations and people.C.expect equality in power.D.avoid uncertainty.E.none of these.112.Sam is known by his colleagues as a great communicator, with an uncanny ability to shift speech patterns, expressions, and body language to be in tune with people from different cultures. Based on this example, Sam is strong in which component of cultural intelligence?A.CognitiveB.EmotionalC.PhysicalD.TangibleE.Intangible113.When organization managers have a(n) ____ attitude, they treat employees as resources to be used.A.ethnocentricB.humanisticC.instrumentalD.pluralisticE.performance114.A loosely knit social framework in which individuals are expected to take care of themselves is called:A.culture.B.individualism.C.ethnocentrism.D.masculinity.E.power distance.115.Jana has a high tolerance for the unstructured, the unclear, and the unpredictable. She can best be described as having: A.high uncertainty avoidance.B.low uncertainty avoidance.C.high degree of individualism.D.low degree of individualism.E.low level of power distance.116.Collectivist values are represented in the social framework of which of these?A.The United StatesB.AustraliaC.EcuadorD.Great BritainE.All of these117._____ refers to a value characterized by people's intolerance for uncertainty and ambiguity and resulting support for beliefs that promise certainty and conformity.A.Power distanceB.Uncertainty avoidanceC.Certainty avoidanceD.Conformity seekersE.None of these118.Which of these reflects a cultural preference for cooperation, group decision making, and quality of life?A.IndividualismB.CollectivismC.MasculinityD.FemininityE.Power distance119.Which of the following countries possesses a high performance orientation?A.IsraelB.SwedenC.TaiwanD.RussiaE.Venezuela120.According to Manager's Shoptalk in Chapter 4, what does the gesture of scratching one's head usually mean in Russia?A."You're crazy."B."I am listening carefully."C."I want to get to know you better."D."I'm confused or skeptical."E."No."121.According to Manager's Shoptalk in Chapter 4, one of the most universal gestures is:A.arm up, shaking back and forth (waving).B.scratching your chin (thinking).C.a smile (happiness or politeness).D.closing your eyes (boredom).E.a pat on the back (congratulations).122.Countries that use several languages:A.are ethnocentric.B.are geocentric.C.are likely to have high uncertainty avoidance.D.have linguistic pluralism.E.are polycentric.123.Austria's cultural preference is for achievement, heroism, assertiveness, and material success. This would be considered:A.power distance.B.individualism.C.masculinity.D.ethnocentrism.E.collectivism.124.One of Hofstede's social values that was developed later is:A.power distance.B.uncertainty avoidance.C.masculinity.D.collectivism.E.long-term orientation.125.Recent research by the GLOBE project has extended _____ research and offered new insights for managers.A.Hofstede'sB.Walton'sC.Weber'sD.Fayol'sE.Gilbreth's126.All of the following are cultural dimensions as defined by the GLOBE Project, except _____.A.assertivenessB.gender differentiationC.social collectivismD.humane orientationE.masculinity127.In countries where women are often in positions of high status, the Globe Project would describe that culture as high in _____.A.assertivenessB.uncertainty avoidanceC.gender differentiationD.societal collectivismE.performance orientation128.A country that places emphasis on fairness and values kindness would be described by the Globe Project as high in _____.A.assertivenessB.uncertainty avoidanceC.gender differentiationD.humane orientationE.societal collectivism129.When organization managers have a(n) _____ attitude, they value employees as an end in themselves.A.ethnocentricB.humanisticC.instrumentalD.pluralisticE.performance130.Which of the following countries possesses a high degree of assertiveness?A.SpainB.SwedenC.JapanD.IcelandE.Switzerland131.Which of the following countries possesses a low degree of gender differentiation?A.ChinaB.BrazilC.ItalyD.South KoreaE.Denmark132.In a(n) _____, people use communication primarily to exchange facts and information.A.power cultureB.informational cultureC.high-context cultureD.mid-context cultureE.low-context culture133.A _____ interaction requires more time because a relationship has to be developed, and trust and friendship must be established.A.high-contextB.salesC.businessD.low-contextE.personal134.A cultural attitude marked by the tendency to regard one's own culture as superior to others is called:A.ethnocentrism.B.polycentrism.C.geocentrismD.technocentrism.E.none of these.135.Which of the following is defined as a culture in which communication is used to enhance personal relationships?A.Interpersonal cultureB.High-context cultureC.Power cultureD.Low-context cultureE.Family-oriented culture136.How many nations signed on for negotiation when GATT was created in 1947?A.15B.23C.28D.40E.57137.Kim, a Japanese expatriate working in Denmark, tends to use communication primarily to build personal social relationships. She feels that relationships and trust are more important than business. Kim is surprised that her business associates in Denmark do not share the same views. Based on this information, Kim most likely grew up in what type of culture? A.Human-orientedB.PassiveC.AssertiveD.Low-contextE.High-context138.The European Union has expanded to a _____ nation allianceA.14B.12C.27D.16E.21139.Which of these is a low-context culture?A.GermanB.ChineseC.KoreanD.ArabE.Japanese140.For the past several years, foreign companies have invested more in business in _____ than in any other place in the world.A.BrazilB.IndiaC.ChinaD.United StatesE.Russia141.In 2010, which of the following countries formed a free trade area with the ten countries that make up the Association of Southeast Asian Nations (ASEAN)?A.LaosB.United StatesC.MexicoD.ChinaE.Japan142.With its large English-speaking population, _____ has numerous companies offering services such as call-center operations, data-processing, computer programming, and technical support.A.GreenlandB.RussiaC.ChinaD.MexicoE.India 143.Which of the following has a goal to guide the nations of the world toward free trade and open markets?A.GATTB.WTOC.GLOBED.EUE.NAFTA144.The _____ is a single European currency that replaced 12 national currencies and unify a huge marketplace.A.MarkB.FrancC.MFND.EuroE.Pound145.Which organization originated and supports the idea of small businesses operating on a global level?A.GLOBEB.EUC.NAFTAD.ASEANE.GATT146.Carrie's Car Care receives more than 25% of its total sales revenues from operations outside of the United States. Carrie's would be considered a:A.foreign national.B.wealth company.C.multinational corporation.D.globalization corporation.E.None of these.147.Which of the following characteristics distinguish a multinational corporation?A.Top management is expected to take a global perspective.B.The corporation is controlled by a single management authority.C.It is managed as an integrated worldwide business system.D.All of theseE.Top management is expected to take a global perspective and The corporation is controlled by a single management authority only.148.Scenario - Sharon Cannon

Sharon Cannon was an MBA student in Detroit, Michigan, with a managerial position at the Ford Motor Company plant. She was invited to join a company that had entered into a joint venture with a German firm to manage a Volkswagen plant. Sharon would be under contract for one year, with an option to renew for a total of three years. Her salary would be 350% more than she was currently earning, and she would be given two all-expenses paid vacations each year. The money and the benefits sounded very nice, but Sharon wasn't sure what the best choice would be.

If she should decide to take the job, she will be most successful in a foreign assignment if she has:a.culture shock.b.cultural intelligence.c.linguistic pluralism.d.ethnocentrism.e.geocentrism.

149.Scenario - Sharon Cannon

Sharon Cannon was an MBA student in Detroit, Michigan, with a managerial position at the Ford Motor Company plant. She was invited to join a company that had entered into a joint venture with a German firm to manage a Volkswagen plant. Sharon would be under contract for one year, with an option to renew for a total of three years. Her salary would be 350% more than she was currently earning, and she would be given two all-expenses paid vacations each year. The money and the benefits sounded very nice, but Sharon wasn't sure what the best choice would be.

The degree of international involvement for the joint venture is an example of:a.outscoring.b.exporting.c.licensing.d.direct investing.e.greenfield venture.

150.Scenario - Sharon Cannon

Sharon Cannon was an MBA student in Detroit, Michigan, with a managerial position at the Ford Motor Company plant. She was invited to join a company that had entered into a joint venture with a German firm to manage a Volkswagen plant. Sharon would be under contract for one year, with an option to renew for a total of three years. Her salary would be 350% more than she was currently earning, and she would be given two all-expenses paid vacations each year. The money and the benefits sounded very nice, but Sharon wasn't sure what the best choice would be.

The American firm joining in the joint venture:a.faces lower risk than if it were using a wholly-owned foreign affiliate.b.enjoys greater control than is it were using the wholly-owned affiliate.c.can anticipate a lower cost than a company that uses global outscoring.d.all of these.e.none of these.

151.In the _____ stage, exports increase, and the company usually adopts a multidomestic approach, probably using an international division to deal with the marketing of products in several countries individually.________________________________________152.MNCs that are oriented toward the markets of individual foreign host countries are considered _____.________________________________________153.MNCs that are truly world-oriented and favor no specific country are considered _____.________________________________________154.In the _____ stage, the company has marketing and production facilities located in many countries and more than one-third of annual sales come from outside the home country.________________________________________155.A multinational corporation typically receives at least _____% of its total sales revenues from outside the parent's home country.________________________________________156._____ means engaging in the international division of labor so that manufacturing can be done in countries with the cheapest sources of labor and supplies.________________________________________157._____ is the barter of products for products rather than the sale of products for currency.________________________________________158.Whereby a company builds a subsidiary from scratch in a foreign country, is referred to as a(n) _____, and is the most risky type of direct investment.________________________________________159._____ is the management of business operations conducted in more than one country.________________________________________160.When it comes to economic development, a currently developing country is also called a(n) _____.________________________________________161._____ is the criterion traditionally used to classify countries as developed or developing.________________________________________162._____ (objects, taboos, holidays) is a sociocultural factor in the international environment.________________________________________163.The risk of loss due to actions by host country governments is known as _____.________________________________________164.Riots, revolutions, civil disorders, and frequent changes in government that affect the operations of an international company shows _____ in a country.________________________________________165.A country's physical facilities that support economic activities make up its _____.________________________________________166.Companies need to be cautious of _____ and _____ when going international because they differ from country to country.________________________________________167.A nation's _____ includes the shared knowledge, beliefs, and values, as well as the common modes of behavior and ways of thinking, among members of a society.________________________________________168.The degree to which people accept inequality in power among institutions, organizations, and people is called _____.________________________________________169._____ refers to a person's ability to use reasoning and observation skills to interpret unfamiliar gestures and situations and devise appropriate behavioral responses.________________________________________170.A value characterized by people's intolerance for uncertainty and ambiguity and resulting support for beliefs that promise certainty and conformity refers to _____.________________________________________171.A preference for a loosely knit social framework in which individuals are expected to take care of themselves is called _____.________________________________________172.A preference for a tightly knit social framework in which individuals look after one another and organizations protect their members' interests refers to _____.________________________________________173._____ stands for preference for achievement, heroism, assertiveness, work centrality (with resultant high stress), and material success.________________________________________174._____ reflects the values of relationships, cooperation, group decision making, and quality of life.________________________________________175.In countries where women are often in positions of high status, the Globe Project would describe that culture as high in _____.________________________________________176.A country that places emphasis on fairness and values kindness would be described by the Globe Project as high in _____.________________________________________177.In a(n) _____, people use communication primarily to exchange facts and information.________________________________________178._____ means that people have a tendency to regard their own culture as superior to other cultures.________________________________________179.An alliance begun in 1957 to improve economic and social conditions among its members,it has evolved into the 27-nation _____.________________________________________180.The _____ is the single European currency that has replaced 12 national currencies.________________________________________181._____ went into effect in early 1994, effectively creating a megamarket among the U.S., Canada, and Mexico.________________________________________182._____ refers to the frustration and anxiety that result from constantly being subjected to strange and unfamiliar cues about what to do and how to do it.________________________________________183.The frustration and anxiety that results from constantly being subjected to strange and unfamiliar cues about what to do and how to do it is called _____.________________________________________184.List the four stages of globalization.

185.List three examples of a country's infrastructure.

186.List the three examples of direct investing mentioned in your text.

187.List the three components of cultural intelligence.

188.List the four dimensions of national value systems identified by Hofstede.

189.List five of the countries that make up the European Union (EU).

190.Briefly describe the social characteristic of ethnocentrism and explain how this can have an impact on the success of an international manager.

191.Briefly describe two personal challenges for global managers.

192.What is global outsourcing? Identify a unique variation of global outsourcing.

193.Direct investing means that the company is involved in managing the productive assets in a foreign country. There are three options for direct investing. Name and compare these three options.

194.Identify and briefly explain at least two key factors in economic, sociocultural and political-legal environments that affect an organization.

195.Briefly explain the difference between high power distance and low power distance.

196.Describe GATT and the World Trade Organization.

197.Explain NAFTA.

Chapter 4--Managing in a Global Environment Key1.TRUE2.FALSE3.TRUE4.FALSE5.TRUE6.TRUE7.FALSE8.FALSE9.FALSE10.TRUE11.FALSE12.TRUE13.FALSE14.TRUE15.FALSE16.TRUE17.TRUE18.TRUE19.FALSE20.TRUE21.TRUE22.FALSE23.TRUE24.TRUE25.TRUE26.FALSE27.FALSE28.TRUE29.FALSE30.TRUE31.TRUE32.FALSE33.FALSE34.FALSE35.TRUE36.FALSE37.TRUE38.TRUE39.TRUE40.TRUE41.TRUE42.TRUE43.FALSE44.TRUE45.FALSE46.FALSE47.TRUE48.TRUE49.FALSE50.FALSE51.C52.E53.C54.A55.A56.A57.A58.D59.D60.B61.B62.A63.B64.D65.D66.C67.A68.C69.D70.B71.D72.A73.D74.C75.D76.B77.B78.B79.C80.D81.D82.C83.E84.B85.E86.D87.C88.A89.D90.A91.D92.B93.C94.B95.E96.B97.D98.A99.B100.D101.B102.A103.B104.E105.C106.A107.B108.C109.C110.A111.C112.C113.C114.B115.B116.C117.B118.D119.C120.D121.C122.D123.C124.E125.A126.E127.C128.D129.B130.A131.E132.E133.A134.A135.B136.B137.E138.C139.A140.C141.D142.E143.B144.D145.C146.C147.D148.b149.d150.a151.international152.polycentric companies153.geocentric companies154.multinational155.25ortwenty-fiveortwenty five156.Global outsourcing157.Countertrade158.greenfield venture159.International management160.less-developed countryorless developed countryorLDC161.Per capita income162.Religion163.political risk164.political instability165.infrastructure166.laws; regulationsorregulations; laws167.culture168.power distance169.Cultural intelligence170.uncertainty avoidance171.individualism172.collectivism173.Masculinity174.Femininity175.gender differentiation176.humane orientation177.low-context culture178.Ethnocentrism179.European Union180.Euro181.NAFTA182.Culture shock183.culture shock184.Domestic, international, multinational, and global/stateless.185.Transportation facilities such as railroads and airports; energy-producing facilities such as utilities and power plants; and communication facilities such as telephone lines and radio stations.186.Joint venture, wholly owned foreign affiliate, and greenfield venture.187.Physical, cognitive, and emotional188.Power distance, uncertainty avoidance, individualism/collectivism, and masculinity/femininity.189.Choose any five of the following: Sweden, Finland, Denmark, Ireland, United Kingdom, Luxembourg, Netherlands, Germany, Belgium, France, Portugal, Spain, Austria, Italy, and Greece.190.Ethnocentrism is a cultural attitude marked by the tendency to regard one's own culture as superior to others. When an international manager has this characteristic, he or she is less likely to be successful, because he or she devalues the culture in which they are trying to do business. When the culture is devalued, relationships can be damaged, trust can be lost, and the willingness to maintain the business relationship can be broken.191.Managers will be most successful in foreign assignments if they are culturally flexible and if they can easily adapt to new situations. Thus, the two personal challenges that exist for global managers are overcoming ethnocentric tendencies and culture shock. Ethnocentrism is a cultural attitude marked by the tendency to regard one's own culture as superior to others. Culture shock refers to the frustration and stress that result from continually being exposed to new and different situations. Proper training and preparation of incoming global managers is crucial.192.Global outsourcing is engaging in the international division of labor so that manufacturing can be done in countries with the cheapest sources of labor and supplies.

Netgear, a Santa Clara, California-based company, makes networking equipment that is designed and marketed in the United States, engineered in Taiwan, and manufactured in China, helping the small company take advantage of the efficiencies it can gain in three different countries.193.The three options are joint ventures, wholly-owned foreign affiliates, and greenfield ventures. With a joint venture, a company shares costs and risks with another firm, typically in the host country. This is often the fastest, cheapest, and least risky way to enter a foreign market. In the second option with a wholly-owned affiliate, the company has full ownership with all of the costs and risks associated with ownership, and enjoys full control of the affiliate. The most costly and risky direct investment is called a greenfield venture. The company builds a subsidiary from scratch in a foreign country. While the risks and costs are high, so is the control and the potential payoff.194.Please refer to exhibit 4-3 in the text.195.Power distance is the degree to which people accept inequality in power among institutions, organizations, and people. With high power distance, this inequality is accepted. With low power distance, people expect equality with respect to power.196.GATT started as a set of rules to ensure nondiscrimination, clear procedures, dispute negotiation, and including lesser developed countries into international trade. GATT and WTO use tariff concessions as a tool to increase trade. Each of the 23 nations that signed GATT agree to limit tariff levels on imports from other members and to the most favored nation clause. GATT sponsored eight rounds of international trade negotiations aimed at reducing trade restrictions. WTO guides and urges nations worldwide toward free trade and open markets.197.Taking effect in early 1994, the North American Free Trade Agreement (NAFTA) united the U.S., Mexico, and Canada into a multi-trillion dollar market. Over a fifteen-year period, this agreement removes tariffs and trade restrictions on most manufactured and agricultural products. Potential advantages of NAFTA center on its expectations: it is expected to spur growth, increase exports, and create jobs in all three countries. Conversely, many U.S. groups have a number of reservations. These include job loss to Mexico and weakened pollution standards.