MGMT338, International Business, Test #1, June 22, 2015 T here are six pages of questions so be sure to answer all the questions. Be sure to read each question carefully. Be sure you understand what the question is asking. Answer only the questions ask, but in a thorough manner. The questions are graded on the quality of the content not the length of the answer. I. (6 pts) Leslie Igles is being sent to Guatemala as the new manager of a local subsidiary of a U.S. firm. She has a participatory management style and is known for her ability to relate to the workers by occasionally stepping in and working along side of them. Answer the following True and False questions using Hofstede’s Five Dimensions. T F 1. This management style will work well with Guatemala’s Power Distance rating. T F 2. Uncertainty Avoidance levels in Guatemala will make it difficult for Leslie to make changes. T F 3. The Individualism level in Guatemala is higher than in Sweden. II. (57 pts) Select the best answer. 1. The major globalization drivers include all of the following except: A) Competitive B) Social C) Technological D) Market E) None. All of the above are major kinds of globalization drivers 2. F oreign Direct Investment A) is the same as Portfolio Investment. B) involves management participation as does Portfolio Investment. C) from developing nations substantially increased from 1990 to 2009. D) has steadily increased since 2000. E) (B) and (D) above. 3. According to the theory of comparative advantage, A) a nation needs to have an absolute advantage in at least one good to gain from trade. B) nations can gain from trade if they are not equally efficient in producing two goods. C) a nation should produce the goods where its disadvantage is the greatest. D) only (B) and (C) above. E) only (A) and (B) above 4. The international business manager can choose to: A. transfer a management practice intact. B. transfer and adjust a management practice. C. not transfer a management practice at all. D. All of the above E. only (A) and (B) above. 5. From comparisons of income distribution studies over time, it appears that in early stages of development: A) the inequality in income between rich and poor nations increases when purchasing power parity data is used. B) income inequality has narrowed from globalization in most developing nations. C) the income inequality in China has widened. D) All of the above. E) only (B) and (C) above 6. The percentage of the population living in urban areas is: A) increasing in high-income nations, but decreasing in low- and middle-income nations. B) decreasing everywhere. C) increasing in low- and middle-income nations, but decreasing in high-income nations. D) becoming younger because older people retire to rural areas. E) None of the above 7. An organization with multicountry affiliates, each of which formulates its own busine.