Mgt 510 midterm and final exam – strayer new

MGT 510 Midterm and Final Exam – Strayer NEW
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Chapters 1 Through 15
Chapter 1 Multinational Management in a Changing World
MULTIPLE CHOICE
1. Businesses of all sizes are increasingly looking for global opportunities because
a. Trade barriers are falling.
b. Money is flowing more freely across countries.
c. The world is becoming one interconnected economy.
d. All of the above.
AACSB Analytic, Strategy
PTS: 1
2. Globalization is
a. The trend of businesses expanding beyond their domestic boundaries.
b. Increasing average temperature over the globe.
c. The increased use of global satellite communication systems.
d. A strategy of developing unique products for each nation in the world.
AACSB Reflective thinking, Environmental influence
PTS: 1
3. Which of the following would not be considered a basic source of globalization?
a. Similar customer needs
b. Falling of trade barriers
c. Advances in communication technology
d. Differentiation among countries
AACSB Reflective Thinking, Environmental influence
PTS: 1

4. Multinational management is
a. A strategy of developing similar strategies for different countries.
b. The trend of business expanding beyond local boundaries.
c. The formulation and design of management systems to successfully take
advantage of international opportunities and respond to international threats.
d. None of the above
AACSB Reflective thinking, Strategy
PTS: 1
5. According to the text, the multinational company
a. Is required to be a public corporation.
b. Is any company that engages in any business function across borders.
c. Must sell overseas to be a true multinational.
d. Must be large.
PTS: 1
6. Which of the following is not a classification of economic systems noted in the text?
a. Domestic economies
b. Transition economies
c. LDCs
d. Emerging markets
PTS: 1
7. Transition economies are
a. Mature economies with substantial per capita GDP and international trade.
b. Led by Hong Kong, Singapore, South Korea, and Taiwan.
c. Countries changing from government-controlled or communistic economies to a
more free market capitalism.
PTS: 1

8. Emerging markets include
a. OECD countries.
b. Brazil, China, Russia, India.
c. Korea, Japan and USA.
d. Hungary, Poland, Slovakia.
PTS: 1
9. Developing economies are
a. Mature economies with substantial per capita GDP and international trade.
b. Hong Kong, Singapore, and Taiwan.
c. Countries in the process of changing their economies from government-controlled
to a more free market capitalism.
PTS: 1
10. Emerging markets are defined as those that are:
a. Growing rapidly.
b. Transitioning from a communist-controlled economy to capitalism.
c. Seen to have impact only sporadically.
d. Enjoying a mature economy.
PTS: 1
11. Major regional trade agreements include all of the following EXCEPT
a. EU.
b. NAFTA.
c. APEC.
d. PROTEC.
AACSB Reflective thinking, Legal responsibilities
PTS: 1

12. The economic agreement that links the US, Canada, and Mexico in an economic bloc
that allows freer exchange of goods and services is known as the
a. EU.
b. OPEC.
c. APEC.
PTS: 1
13. The World Trade Organization:
a. Is a major trading company.
b. Succeeded the GATT agreements.
c. Collects duties for member countries.
d. Is a consulting group for companies who wish to engage in international trade.
PTS: 1
14. Examples of developed economies would include:
a. The U.S. and Japan.
b. Hungary and Poland.
c. Argentina and Brazil.
d. Hong Kong and Singapore.
AACSB Reflective thinking, Creation of value
PTS: 1
15. According to your text, FDI means
a. Foreign development initiatives.
b. Various investment policies of the U.S. government.
c. A foreign company has an ownership position in a company in another country.
d. A type of international negotiation strategy.
PTS: 1
16. The two forms of risk discussed in the text include

a. Exchange rate risk and corruption risk.
b. Business risk and social risk.
c. Sales risk and employment risk.
d. Economic and political risk.
PTS: 1
17. Economic risks discussed in the text include
a. Anything a government might do or not do that might adversely affect a company.
b. The likelihood of losing money if one invests in stocks.
c. Exchange and interest rates.
d. Expropriating of foreign firms by the local government without any
compensation.
PTS: 1
18. Anything that a government might do to affect a multinational adversely is known as
a. Exchange rate risk.
b. Business risk.
c. Sales risk.
d. Political risk.
AACSB Reflective thinking, Leadership
PTS: 1
19.. A global product or service is
a. Adapted for each country's unique needs.
b. A similar product or service for all customers throughout the world.
c. A product or service that requires bilingual customers.
d. Products developed for use outside the country.
PTS: 1
20. Which of the following statements about the Internet and Information Technology is
true?

a. The Internet is benefiting companies worldwide.
b. Electronic communications does not allow companies to communicate with
locations around the world.
c. Information technology is not encouraging a borderless financial market.
d. Information technology does not allow the sharing of information around the
world.
AACSB Technology, Information technology
PTS: 1
21. The free market reforms in emerging countries are creating a potential group of
a. new competitors.
b. old competitors.
c. subsidized firms.
d. government companies.
AACSB Analytic, Environmental influence
PTS: 1
22. Which of the following statements is true about privatization?
a. Developing nations have the highest rate of privatization.
b. The leading privatizers in the world do not face competition.
c. Privatization is the sale of private business to government investors.
d. Privatization is absent in transition economies.
AACSB Analytic, Legal responsibilities
PTS: 1
23. Global customers:
a. Search for government-controlled enterprises.
b. Provide reduced government trade protection.
c. Search the world for their supplies without regard to national boundaries.
d. Encourage large firms to sell to them.
PTS: 1
24. Global trade has this important effect on developing new competitors.

a. It facilitates the transfer of technology, allowing former assemblers to become
creators.
b. It facilitates the transfer of knowledge, allowing former builders to become
assemblers.
c. It reduces competition.
d. It reduces rivalry.
PTS: 1
25. Global standards for products
a. Are virtually impossible in technical industries.
b. Refer to having one product standard for all countries.
c. Puts companies at a strategic disadvantage.
d. All of the above
PTS: 1
26. According to the experts cited in your text, the next generation of global managers
will need all of the following, EXCEPT:
a. Emotional intelligence
b. The ability to work with people from different cultural backgrounds
c. Poor negotiation skills
d. A local mindset
PTS: 1
27. A global mindset requires managers to think globally but
a. act locally.
b. have emotional intelligence.
c. understand national cultures.
d. need accomplished negotiation skills.
PTS: 1

28. The strategic approach to multinational management
a. Involves the development of one strategy for all countries.
b. Focuses on the skills and aptitudes that the next generation of global managers
will need.
c. Is concerned with developing strategies that deal with operating in more than one
country and culture.
PTS: 1
29. Which of the following statements about globalization is false?
a. Globalization is a simple evolutionary process.
b. Not all economies of the world are benefiting equally from globalization.
c. Terrorism, wars and SARS has limited and even reversed the effects of
globalization.
d. All of the above statements are false.
PTS: 1
30. Aggressive multinational companies from emerging markets are
a. expanding beyond their own borders.
b. staying within their own national borders.
c. help transition from a communist to a capitalist system.
d. unable to compete with western companies.
PTS: 1
31. The set of technical standards developed by the International Organization for
Standardization are known as
a. ISO 92.
b. ISO 14000.
c. ISO 9001: 2000.

PTS: 1
32. One of the major reasons why global companies seek to develop standard products is
because
a. A standard product allows the company to save money because the same product
can be sold anywhere.
b. A company can be more responsive to local cultural conditions.
c. It allows the company to invest more in research and development.
d. All of the above
PTS: 1
33. Emerging markets are
a. Located mostly in Africa and South America.
b. Similar to developed economies.
c. Those countries between developed and developing countries that present
tremendous opportunities.
d. have free trade areas.
PTS: 1
34. Which of the following statements regarding the European Union is true?
a. The European Union no longer exists.
b. The European Union includes Venezuela.
c. The European Union has a common currency.
d. All of the above are true.
PTS: 1
35. Future trends indicate that _____ matters more than size of the company.
a. location
b. price
c. flexibility
d. a high standard

PTS: 1
36. According to the text, all of the following includes factors that will shape the future
business environment EXCEPT
a. Blurring of industry barriers.
b. Finding your niche.
c. Ability to find cheap labor.
d. Emphasis on innovation and the learning organization.
PTS: 1
37. The best definition of multinational management includes which of these factors:
a. The formulation of strategies and management systems.
b. Designed to take advantage of international opportunities.
c. And to respond to international threats.
d. All of the above.
PTS: 1
38. Multinational companies are defined by all of these factors EXCEPT:
a. Engaging in business beyond its domestic borders.
b. They may be of any size.
c. They may be corporations.
d. They must be public corporations.
PTS: 1
39. The largest company in the world is:
a. Wal-Mart Stores.
b. BP.
c. Royal Dutch Shell.
d. Chevron.

PTS: 1
40. The European Union consists of:
a. 25 member nations, with the 26th scheduled to become a member in 2013.
b. 26 member nations, with the 27th scheduled to become a member in 2013.
c. 27 member nations, with the 28th scheduled to become a member in 2013.
d. 25 member nations, with no others scheduled to become a member in 2013.
PTS: 1
ESSAY
1. Discuss how any company can become a multinational company. What are some of
the options available to companies that allow them to use international markets and
locations competitively?
2. Discuss some reasons why reductions in world trade barriers are driving the world
toward a global economy.
3. Discuss at least two major forces that are driving the world toward a global economy.
4. How is the Internet and Information technology helping companies deal with a global
economy? How is the Internet and Information technology helping small companies
and even companies from poorer nations?
5. What is corporate social responsibility? Why are firms trying to become socially
responsible?
6. Discuss the differences between foreign trade and foreign direct investment.
7. What are some of the reasons why globalization and free trade are being criticized?
Do you think that free trade is helping all countries? Why or why not?
8. Look at the information on the world’s leading exporters discussed in the text. Do you
think these trends will continue in the future? Why?

9. Discuss the characteristics of a next generation of multinational managers. How can
you develop those characteristics through education and experience?
10. Why should multinational management be studied? What are some of the elements of
a strategic approach to multinational management?
Chapter 2 Culture and Multinational Management
MULTIPLE CHOICE
1. All the following is true about culture EXCEPT
a. Culture is the shared belief, norms, and values that guide everyday life of a group.
b. Culture is passed from generation to generation through norms, values, and
beliefs.
c. Culture is always directly observable.
d. Culture is very pervasive in societies.
AACSB Reflective thinking, Individual dynamics
PTS: 1
2. The correct definitions of the levels of culture include all of these EXCEPT:
a. The national culture, dominant within the political boundaries of a nation-state.
b. The business culture, unique to each business.
c. The organizational culture, shared by members of an organization.
d. The occupational culture, shared by those in the same occupation.
AACSB Analytic, Individual dynamics
PTS: 1
3. Cultural values:
a. Represent our understandings about what is true.
b. Prescribe and proscribe behavior.
c. Tell us what is good and beautiful and what are legitimate goals in life.
d. Provide solutions to problems of adaptation to the environment.
PTS: 1

4. All of the following are dimensions of Hofstede’s Model of National Culture
EXCEPT:
a. Power avoidance.
b. Uncertainty avoidance.
c. Masculinity.
d. Long-term orientation.
PTS: 1
5. International management may be influenced by which of the following levels of
culture?
a. National
b. Business
c. Organization
d. All of the above
PTS: 1
6. Aspects of the business culture in China include all of these EXCEPT:
a. Business moves more slowly.
b. One should respect Chinese business etiquette.
c. It is important to praise individuals who excelled.
d. The Chinese value harmony and order.
PTS: 1
7. Organizational culture refers to the
a. Set of important understandings that members of an organization share.
b. Expected ways of behaving for people in the same occupational group.
c. Values and beliefs pertaining to doing business with a specific company.
PTS: 1

8. Occupational cultures
a. Are the norms, values, beliefs, and expected ways of behaving for people in the
same occupational group.
b. Are the set of important understandings that members of an organization share.
c. Are norms, values, and beliefs that pertain to all aspects of doing business in a
country.
d. Are the dominant cultures within a country.
PTS: 1
9. Some people believe that the norms, values, and beliefs of their own culture represent
the only correct ways of dealing with the world. This is called
a. High power distance.
b. Stereotyping.
c. Androgyny.
d. Ethnocentrism.
PTS: 1
10. Cultural relativism represents
a. The belief that all cultures are valid and ethical responses to the problems of
living.
b. The belief that some cultures are relatively better than others.
c. The belief that your own culture is the best.
d. The degree of similarity between business and national cultures.
PTS: 1
11. A new expatriate manager located in India reports to you that all of her subordinate
local managers lack initiative and will only do what she tells them to do. You realize
that most Indian managers expect superiors to tell them what to do. You advise her of
this, but also caution the new manager to avoid:
a. Rationalization.
b. Stereotyping.
c. Uncertainty avoidance.
d. Ethnocentrism.

PTS: 1
12. On which of Hofstede's value dimensions does the U.S. rank highest?
a. Masculinity
b. Individualism
c. Patriotism
d. Power distance
PTS: 1
13. High power distance countries have norms, values, and beliefs such as
a. It is best to exercise power privately.
b. Everyone has a place, some are high and some are low.
c. A leader should develop his or her subordinates.
d. Leaders are made and not born.
AACSB Reflective thinking, Leadership principles
PTS: 1
14. Countries high on uncertainty avoidance have norms, values, and beliefs such as
a. Debates help you find the truth.
b. Deviant people should be tolerated.
c. Lack of rules in the workplace is good.
d. Experts and authorities are usually correct.
PTS: 1
15. Which of the following best describes U.S. culture with regard to individualism?
a. Lower than many European nations
b. Highest observed so far
c. About the same as Japan
d. Slightly above average

PTS: 1
16. An emphasis on leadership styles that appeal to duty and commitment to group goals
are found primarily in countries with
a. Low masculinity.
b. Low uncertainty avoidance.
c. Short term orientations.
d. High collectivisim (low individualism).
AACSB Reflective thinking, Leadership principles
PTS: 1
17. Training for conformity and obedience, with valuations based on compliance and
trustworthiness characterize countries with
a. Low power distance.
b. High power distance.
c. High individualism.
d. Short term orientations.
PTS: 1
18. Cultures with high power distance values probably have
a. Participative leadership.
b. Decentralized decision making.
c. Large wage differences between management and workers.
d. Managers selected by educational achievement.
PTS: 1
19. Seniority tends to dominate evaluation and promotion in
a. Short term oriented cultures.
b. Cultures high on uncertainty avoidance and low on individualism.
c. Ethnocentric cultures.
d. Doing rather than being cultures.

PTS: 1
20. People from ________ countries would probably feel most comfortable with an
autocratic (theory X) task- directed style of leadership.
a. High masculinity
b. High power distance
c. High uncertainty avoidance
d. All of the above
PTS: 1
21. A culture which has dominant values of success, money, and material things is
probably
a. Low on power distance.
b. Low on individualism.
c. High on masculinity.
d. High on long term orientation.
PTS: 1
22. In countries that rank high on Hofstede's masculinity index
a. People prefer a short working day to get home to their families.
b. People feel more comfortable in small organizations.
c. Theory X management is rejected strongly.
d. Work is central to life and job recognition is very important.
PTS: 1
23. In a universalistic culture, the right way to treat people is based on
a. Personal relationships.
b. Principles of harmony within the group.
c. Abstract principles such as rules of law and religion.
d. Accepting the use of emotions.

PTS: 1
24. Which of the 7d cultural dimensions represents the extent to which an individual's
personal life is involved in his/her work relationships?
a. Neutral versus affective
b. Achievement versus ascription
c. Time orientation
d. Specific versus diffuse
PTS: 1
25. The achievement versus ascription dimension addresses
a. The extent to which an individual's life is involved with work.
b. The manner by which a society gives status.
c. The way a culture deals with the past, present, and future.
d. The belief people have in controlling their fate.
PTS: 1
26. Expressions of anger, laughter, gesturing, and emotional outbursts are considered
acceptable in
a. Specific cultures.
b. Diffuse cultures.
c. Neutral cultures.
d. Affective cultures.
PTS: 1
27. Which of the following statements is true regarding a future oriented society?
a. Managers and workers do not necessarily believe that hard work can lead to future
success.
b. People believe they can control nature.
c. Organizational change is considered necessary and beneficial.
d. Individuals cannot influence the future.

PTS: 1
28. In countries where it is believed that nature dominates people,
a. Managers are less likely to be fatalistic.
b. Managers emphasize planning and scheduling.
c. Managers actively try to change situations.
d. Managers believe that they must accept situations rather than changing them.
PTS: 1
29. The ability to interact effectively in multiple cultures is known as
a. Trustworthiness.
b. Cultural intelligence.
c. Cultural relativism.
PTS: 1
30. Discussing cultural paradoxes, the text indicates that although the US scores very high
on individualism, it also has the highest percentage of
a. unmotivated population.
b. uncaring seniors.
c. homeless people.
d. charity giving in the world.
PTS: 1
31. A cultural paradox is defined as:
a. Group situations define cultural prescriptions.
b. Individual situations define cultural prescriptions.
c. Group situations contradict cultural prescriptions.
d. Individual situations contradict cultural prescriptions.

PTS: 1
32. When hiring for managerial jobs in high power distance countries, preference is
generally given to individuals
a. having a high social class or a degree from an elite university.
b. from all social classes.
c. based on their qualifications and skills.
d. All of the above
PTS: 1
33. The range of feelings outwardly expressed in society refers to the cultural dimension
of ________.
a. Uncertainty avoidance
b. Universalism vs. particularism
c. Neutral vs. affective
d. Diffuse vs. specific
PTS: 1
34. Preference for involvement in multiple areas of personal and work life
simultaneously are more likely in
a. Specific cultures.
b. Diffuse cultures.
c. Neutral cultures.
d. Affective cultures.
PTS: 1
35. Which of the following cultural dimensions is NOT included in Hofstede's model of
national culture?
a. Power distance
b. Individualism
c. Masculinity
d. Neutrality

PTS: 1
36. US firms often outsource customer service to workers in a foreign country. To
minimize difficulties, such workers receive cross-cultural training which may include:
a. Training workers to reduce or eliminate an accent.
b. Educating workers regarding US culture.
c. Requiring workers to speak only English while on duty.
d. All of the above
PTS: 1
37. Which of the following cultural dimension represents the extent to which individuals
are expected to be fair, altruistic, caring and generous?
a. Performance orientation
b. Individualism
c. Humane orientation
d. Power distance
PTS: 1
38. According to the text, which of the following two dimensions are not considered by
Hofstede and is unique to the GLOBE cultural dimensions framework?
a. Power distance and humane orientation
b. Long-term orientation and uncertainty avoidance
c. Masculinity and Individualism
d. Humane orientation and performance orientation
PTS: 1
39. Cultural paradoxes represent
a. Cases where situations in reality seem to contradict cultural prescriptions.
b. The assumption that all people within a culture behave, feel and act the same.
c. The belief that a person’s culture is superior.
d. The belief that one’s culture is inferior.

PTS: 1
40. According to research discussed in the text, which of the following may help
managers become more culturally intelligent?
a. Exposure to new cultural experiences in other countries
b. Learning to trust each people from individualistic cultures
c. Having a short term orientation
d. All of the above are true
PTS: 1
ESSAY
1. Define national culture, business culture, occupational, and organizational culture.
2. Describe three management implications of high individualism versus collectivism
(low individualism).
3. What are country clusters? Explain with an example.
4. What are cultural paradoxes? Give one example.
5. Describe some characteristics of cultures high on power distance. Compare the
management implications with cultures low on power distance.
6. Describe some characteristics of cultures high on collectivism. Compare the
management implications with cultures low on collectivism.
7. Describe some characteristics of cultures high on masculinity. Compare the
management implications with cultures low on masculinity.
8. Discuss four of the 7d cultural dimensions. What are some implications of these
dimensions for international management?

9. Why do the rankings on some cultural dimensions such as individualism differ
between the 7d and Hofstede models?
10. Discuss the GLOBE cultural framework. How is this cultural framework different
from Hofstede’s framework?
Chapter 3 The Institutional Context of Multinational Management
MULTIPLE CHOICE
1. The national context of a society is made up of
a. The national and business cultures of that society.
b. The social institutions of that society.
c. The national cultures and social institutions of that society.
d. The national cultures of that society.
PTS: 1
2. A complex of positions, roles, norms, and values organizing relatively stable patterns
of human resources to sustain viable social structures refers to which of the
following?
a. Entrepreneurship
b. Social institutions
c. Comparative advantage
d. Strategy of the multinational company
PTS: 1
3. According to the model discussed in the text, the national context does which of the
following?
a. Creates a resource pool
b. Influences the business environment and helps create induced factor conditions
c. Does not influence the business environment
d. Does not help create induced factor conditions

PTS: 1
4. An economic system where production activities are decentralized to private owners
who carry out these activities to make a profit is known as a
a. Capitalist economy.
b. Command economy.
c. Socialist economy.
d. Mixed economy.
PTS: 1
5. Which of the following statements is NOT TRUE regarding the experiences countries
go through as they undertake market transitions from socialism to a more market
based economy?
a. Drastic measures have to be taken to turn around formerly inefficient companies.
b. Managers' thinking have to be changed so that they can understand management
functions.
c. Financial systems have to be left unregulated to accurately reflect market prices.
d. More workers have to be hired as companies find that they are understaffed.
PTS: 1
6. A society that is characterized by dominance of the manufacturing or secondary
sectors is a/an
a. Industrial society.
b. Pre-industrial society.
c. Post-industrial society.
d. Market society.
PTS: 1
7. Which of the following statements is TRUE regarding post-industrial societies?
a. Post-industrial societies are characterized by the dominance of manufacturing
sectors.
b. Post-industrial societies tend to favor economic achievement.
c. Post-industrial societies tend to emphasize quality of life over economic
achievement.

PTS: 1
8. Which of the following are key social institutions that are the most likely to influence
the business environment of a country?
a. Economic system
b. Level of industrialization
c. Religion
d. All of the above
PTS: 1
9. Which of the following systems encourage the pursuit of collective goals such as
social equality and solidarity?
a. Economic system
b. Market economy
c. Command economy
d. Capitalist economy
PTS: 1
10. According to the text, which of the following statements regarding workers in
formerly socialist economies is NOT TRUE?
a. Workers in formerly socialist economies are very trusting of each other
b. Workers in formerly socialist economies are generally reluctant to cooperate and
work with each other
c. Workers in formerly socialist economies tend to favor personal relationships as
key to success as opposed to their work performance
PTS: 1
11. Which of the following societies tend to determine occupations based on ascription
(family background) and social status?

a. Industrial societies
b. Postindustrial societies
c. Socialist societies
d. Pre industrial societies
PTS: 1
12. Which of the following four religions are practiced by 71% of the world's population?
a. Jainism, Hinduism, Islam and Christianity
b. Hinduism, Christianity, Islam, and Sikhism
c. Christianity, Hinduism, Islam and Buddhism
d. Judaism, Christianity, Buddhism, and Islam
PTS: 1
13. Which of the following religions is most practiced around the world?
a. Christianity
b. Buddhism
c. Hinduism
d. Islam
PTS: 1
14. Which of the following religions has strict gender roles and also prohibits
multinationals from paying or receiving interest on transactions?
a. Islam
b. Buddhism
c. Christianity
d. Jainism
PTS: 1
15. Which religion is considered to be timeless and eternal as it not based on a single
founder or event?

a. Jainism
b. Christianity
c. Hinduism
PTS: 1
16. Which of the following religions is based on the idea that craving and desires produce
suffering but that it also possible to reach a stage where there is no longer any
suffering?
a. Christianity
b. Judaism
c. Hinduism
d. Buddhism
PTS: 1
17. The cultural and economic changes that occur because of how production is organized
and distributed in society refers to which concept?
a. religion
b. education
c. industrialization
d. dominant economic type
PTS: 1
18. In industrial societies, occupational placement is based on universalistic criteria such
as
a. Age.
b. Religion.
c. Ascription.
d. Achievement.
PTS: 1

19. A multinational manager carefully considers the list of festivals that are celebrated in
a country in order to allow for holidays for his/her employees. Which social
institution is most likely being considered here?
a. Industrialization
b. Market transition
c. Education
d. Religion
PTS: 1
20. Pre industrial societies tend to have
a. Poor infrastructure and support.
b. Adequate infrastructure.
c. Favorable business conditions.
d. Government support.
PTS: 1
21. An increased emphasis on quality of life over achievement oriented norms is typical
of
a. Pre-industrial societies.
b. Industrial societies.
c. Post-industrial societies.
PTS: 1
22. A multinational Human Resource Manager's decision to promote an individual results
in wide discontent in the foreign subsidiary. The manager finds that although the
promoted individual's performance is exemplary, most employees feel that the
promotion should have gone to another individual who comes from an important
family. The foreign subsidiary is most likely located in a/an
a. Industrial society.
b. Pre-industrial society.
c. Capitalist society.
d. Post-industrial society.

PTS: 1
23. In which of the following societies would people most likely prefer non-monetary
incentives?
a. Industrial society
b. Pre-industrial society
c. Post-industrial society
AACSB Reflective thinking, Motivation concepts
PTS: 1
24. High rankings on the materialist index of some countries (e.g., Hungary, India, Brazil)
suggest that individuals in these countries are
a. Favor non material incentives.
b. Achievement oriented.
c. Motivated by non-monetary rewards.
d. Hinduism.
PTS: 1
25. When industrialization is inwardly oriented, local industries are promoted to satisfy
the
a. Need to export.
b. Local population.
c. Requirements of multinational companies.
d. Domestic market and preserve foreign exchange.
PTS: 1
26. When industrialization is outward oriented, foreign exchange is
a. Encouraged and exporting is promoted.
b. Discouraged and exporting is not favored.
c. Not welcomed.
d. Used to fund governments in power.

PTS: 1
27. The famous German Sociologist, Max Weber, argued that the Protestant work ethic
a. Led to the emergence of capitalism in Western Europe.
b. Led to the decline of capitalism in Western Europe.
c. Led to an acute distaste for the accumulation of wealth.
d. Led to the rise of socialism in Eastern Europe.
PTS: 1
28. One important issue relevant to multinationals, is the extent to which educational
systems encourage students to
a. Be innovative and creative.
b. To expect a more ethical atmosphere.
c. Passively accept what is taught.
PTS: 1
29. When multinationals pay low wages or use child labor, they often receive
a. Support and praise.
b. Imprisonment.
c. Negative publicity.
d. Social responsibility.
PTS: 1
30. According to the text, all of the following statements regarding education and
educational systems around the world are TRUE except
a. Universal education enrolment is a goal of most countries.
b. Educational levels give an indication of the skill and productivity in any society.
c. The focus of educational systems around the world are fairly similar in terms of
whether these systems emphasize academic or vocational aspects.

d. All of the above statements are true.
PTS: 1
31. The educational attainment scores
a. Are fairly similar for most countries.
b. Give an idea of the abundance of engineers for research and development
purposes.
c. Reflect the mean years of schooling of people in any society.
d. All of the above are true of educational attainment scores.
PTS: 1
32. Which of the following is not an implication of educational systems as they apply to
multinationals?
a. Educational level gives an indication of the skill and productivity of workers in
any society.
b. Educational systems have implications for how labor force issues are approached
and policies implemented.
c. Educational levels can be gauged to give an idea of what multinationals can
expect.
PTS: 1
33. In societies with high social inequality, resources are controlled by
a. A majority of people.
b. Very few people.
c. The Government.
d. Religious institutions.
PTS: 1

34. When a society expects that while men should work outside, and women ideally stay
at home, this exhibits which of the following features?
a. Need for domestic products
b. Open societies
c. Growing levels of industrialization and economic development
d. Strict division of society by gender
PTS: 1
35. Postindustrial societies are typically characterized by the dominance of
a. Service and manufacturing sectors.
b. Service sectors.
c. Manufacturing sectors.
d. Agricultural sectors.
PTS: 1
36. The degree to which people have privileged access to resources and positions within
societies is
a. An indication of social inequality.
b. The same around the world.
c. Has no implications for multinationals.
d. All of the above
PTS: 1
37. Which of the following statements about the GINI index is FALSE?
a. The GINI index represents the extent of inequality in people’s income within a
society
b. Ranges from 0 to 100
c. Is scaled so that 0 represents no inequality while 100 represents perfect inequality
d. Is scaled so that 100 represents no inequality while 0 represents perfect inequality
PTS: 1

38. The movement from a socialist economy to a free market economy is also known as
which of the following?
a. Market transition
b. Dominant economic type
c. Rapid industrialization
d. Government regulation
PTS: 1
39. The index of economic freedom may be used by multinationals to understand the
nature of
a. market transitions
b. national culture
c. national context
d. governmental intervention
PTS: 1
40. Which of the following has important implications for multinationals?
a. Religion
b. Education and economic systems
c. Industrialization and inequality
d. All of the above
PTS: 1
ESSAY
1. Define social institutions. How do social institutions affect individuals and
organizations?
2. Define national context. Explain how national context influences organizations.
3. What are the three major types of economic systems? What are the effects of
economic systems on how organizations are structured in societies?

4. What are some implications of the market transitions that many formerly communist
societies are experiencing? What are some major challenges facing multinationals as
they try to motivate workers in these transition economies?
5. Compare and contrast pre-industrial, industrial and post-industrial societies. Discuss
the implications for multinationals of any one of these three types of economies.
6. What are some major philosophies of each of the world's major religions? Pick two
religions and discuss how they affect the business environment.
7. How does the educational system influence the business environment in any country?
8. What is social inequality? What implications does social inequality have for
multinationals?
Chapter 4
Managing Ethical and Social Responsibility Challenges in Multinational Companies
MULTIPLE CHOICE
1. International business ethics
a. Present problems similar to domestic business ethics.
b. Pertain to the rules and values that determine actions that companies should
follow when dealing with other companies.
c. Pertain to those unique ethical problems faced by managers conducting business
across countries.
AACSB Ethics, Ethical responsibilities in organizations and societies
PTS: 1
2. Which of the following statements is NOT TRUE regarding social responsibility?
a. Social responsibility is not linked with business ethics.
b. Refers to the idea that businesses have certain responsibilities to society beyond
making profits.
c. Means that a company has to take into consideration various stakeholders when
making decisions.
d. Is concerned with the ethical consequences of policies and procedures of the
company as an organization.

PTS: 1
3. The ethical philosophies that consider actions as good or bad regardless of their
outcomes are
a. The teleological ethical theories.
b. Utilitarianism.
c. Deontological theories of ethics.
PTS: 1
4. Utilitarianism, as a form of ethical philosophy,
a. Argues that what is good or moral comes from acts that produce the greatest good
for the greatest number of people.
b. Argues that actions by themselves have a good or bad morality regardless of their
consequences.
c. Is one form of deontological ethical theory.
d. Is a moral language proposed by Donaldson.
PTS: 1
5. Which of the following statements are true about teleological ethical theories?
a. The morality of an act comes from its consequences.
b. Utilitarianism is one of the most popular teleological theory.
c. Actions by themselves have a good or bad morality regardless of their
consequences.
PTS: 1
6. Stealing a loaf of bread to feed a hungry family can be justified by which ethical
theory?
a. Social responsibility ethical theory
b. Deontological ethical theory

c. Moral languages
d. Utilitarianism
PTS: 1
7. Moral languages
a. Are a form of deontological ethical theory.
b. Focus on the consequences of actions rather than their worth.
c. Describe the ways people think about general issues.
d. Are used to explain ethical choices.
PTS: 1
8. Moral languages include all of the following EXCEPT
a. Virtue and vice.
b. Self-control.
c. Avoiding harm.
d. Being ethical.
PTS: 1
9. Multinationals that provide fair wages to their local employees are following which
type of moral language?
a. Avoiding harm
b. Ethical behavior
c. Rights and duties
d. Social contract
PTS: 1
10. According to the text, the United Nations Declaration of Human Rights is an example
of which of the following?
a. Convenient imperialism
b. Transnational ethics

c. European codes
d. Moral language
PTS: 1
11. Written ethical codes may include which of the following?
a. Contracts
b. International laws
c. Laws of a country
d. All of the above
PTS: 1
12. Which of the following statements about bribes or questionable payments are true?
a. Bribes to expedite government actions or to gain business advantages are common
in international business.
b. Most countries have formal laws forbidding bribes or questionable payments.
c. Enforceability of ethics varies in different countries.
d. All of the above
PTS: 1
13. The reason to know provisions of the FCPA is that it
a. Is the easiest to enforce and observe.
b. Probably encourages foreign bribery.
c. Is a tricky component for US companies.
d. Emphasizes the reasonable person concept.
PTS: 1
14. According to the FCPA, U.S. managers are criminally liable
a. Only for bribes that they pay directly to a foreign official.
b. Only for bribes paid in the U.S. and not in other countries where it is common
practice in business dealings.

c. For all bribes by employees or agents of the U.S. company even if the U.S.
managers do not know about them.
d. For bribes paid by foreign agents, if managers know about them.
PTS: 1
15. Which of the following payments would the Foreign Corrupt Practices Act allow?
a. Payments made under duress to avoid injury or violence
b. Small payments to encourage officials to do their legitimate and routine jobs
c. Payments that are considered lawful in the country
d. All of the above are allowed
PTS: 1
16. Ethical dilemmas are usually
a. Easy to resolve.
b. Clear and unambiguous.
c. Unclear and ambiguous.
d. Removed with a formal code of ethics.
PTS: 1
17. Proscriptive rules in codes of conduct:
a. Tell multinational companies or managers what they should do.
b. Are forms of moral language.
c. Tell multinational companies or managers what they cannot do.
d. All of the above
PTS: 1
18. Ethical convergence
a. Is similar to ethical relativism.
b. Refers to basic universal moral principles.
c. Is a form of ethical universalism.

d. Refers to the growing pressures for multinational companies to follow the same
rules in managing ethical behavior and social responsibility.
PTS: 1
19. Pressures for ethical convergence include all of the following EXCEPT
a. The growth of international trade and trading blocs.
b. Increased interaction between foreign trading partners.
c. The need to have unique norms and values to manage their employees differently.
PTS: 1
20. Prescriptive rules in codes of conduct
a. Tell multinational companies or managers what they should do.
b. Are forms of moral language.
c. Tell multinational companies or managers what they cannot do.
d. All of the above
PTS: 1
21. Ethical relativism
a. Argues that one should impose the home country's ethical system everywhere.
b. Implies that ethics are relative to the type of philosophy used.
c. Means that each society's view of ethics must be considered legitimate.
d. Means that the same ethical principles are universal.
PTS: 1
22. The argument that there are basic moral principles that transcend cultural and national
boundaries is supported by
a. Ethical relativism.
b. Moral languages.
c. Ethical universalism.

PTS: 1
23. When companies use the logic of ethical relativism to behave any way they please,
this is known as
a. Prescriptive ethical management.
b. Proscriptive ethical management.
c. Convenient relativism.
d. Universal ethics applications.
PTS: 1
24. When companies use the logic of moral universalism and impose their views on the
rest of the world, ________________ occurs.
a. Ethical divergence
b. Ethical convenience
c. Cultural imperialism
PTS: 1
25. The form of analysis where the prime interest is what is the best decision for a
company's profit is
a. Legal analysis.
b. Ethical analysis.
c. Social responsibility analysis.
PTS: 1
26. In an economic analysis
a. The manager considers the best decision for a company's profits.
b. The manager focuses on meeting the laws of a country.

c. The manager goes beyond profits and analyzes the ethical consequences of
decisions.
PTS: 1
27. When facing an ethical question, the manager who uses legal analysis criteria
a. Is primarily interested in the decision that is best for the company's profits.
b. Focuses on only meeting the laws of the country in which the company is
operating.
c. Focuses on meeting the needs of other constituents beyond stakeholders.
d. Focuses on doing the right things.
PTS: 1
28. In an ethical analysis of a problem, a manager must
a. Focus on meeting the laws of the country in which the company is operating.
b. Focus on what is the best decision for a company's profits.
c. Focus on the decisions with the best consequences.
PTS: 1
29. The first duty of a multinational manager faced with a decision is
a. To consider whether the decision makes business sense.
b. To consider whether the decision meets the legal standard in the country.
c. To consider whether the decision is ethical.
d. To refer to the written codes of ethics.
PTS: 1
30. Ethical decision making of multinational managers preferably should
a. Be based solely on home country ethical principles.
b. Go beyond legal constraints and respect the local cultural norms.

c. Be primarily profitable for the multinational.
PTS: 1
31. A multinational manager decides that it would be unethical to close a foreign plant as
employees in that plant are not being treated with dignity. Which ethical theory is the
manager using to reach that conclusion?
a. Teleological ethical theory
b. Utilitarian ethical theory
c. Deontological ethical theory
PTS: 1
32. A multinational manager decides to allow hiring of children for a foreign plant as
such practices are accepted in the country. Which ethical principle is she basing her
decision on?
a. Ethical universalism
b. Convenient ethical universalism
c. Ethical relativism
PTS: 1
33. A multinational manager is considering closing a plant in China as wages have
increased considerably in China. The manager considers the implications of laying off
people and closing the plant on the profits of the company. Which form of analysis is
the manager doing?
a. Legal analysis
b. Profit making analysis
c. Ethical analysis

PTS: 1
34. Which act was proposed by the Securities Exchange Commission in reaction to the
accounting scandals at companies like Enron and Worldcom?
a. Sarbanes-Oxley
b. WTO
c. Corruption Perception Index
d. The Ethisphere Institute
PTS: 1
35. Which of the following statements regarding the Foreign Corrupt Practices Act
(FCPA) is NOT TRUE?
a. Bribes or payments made under duress to avoid injury or violence are acceptable.
b. Small payments to encourage officials to do their legitimate and routine jobs are
acceptable.
c. Payments or gifts to foreign government officials for the sake of gaining or
retaining business are acceptable.
d. In an unstable political environment, payments made to local officials to avoid
harassment of employees are acceptable.
PTS: 1
36. Which of the following statements is TRUE regarding cultural relativism as an
approach in international business ethics?
a. What is right or wrong depends on the culture.
b. A guide for what is legal and appropriate is the local culture.
c. Companies should follow the moral norms of the local culture.
d. All of the above statements are true.
PTS: 1
37. Deontological ethical theories
a. Argue that the morality of an act comes from this consequences.
b. Would provide justification for closing a plant and laying off workers to reduce
costs.
c. Is most typically represented by cost and benefit analyses.
d. Argue that actions by themselves have a good or bad morality irrespective of the

consequences.
PTS: 1
38. According to the text, which of the following is NOTa consequence of corruption?
a. Companies typically make up the bribe by increasing the contract price.
b. Companies use poorer quality materials to make up for the bribe.
c. Companies devote some of the bribe to socially responsible causes.
d. Corruption can also result in collusions among firms.
PTS: 1
39. The world seems to be moving towards transnational ethics because:
a. Globalization dramatically increases contact among people from different ethical
and cultural systems.
b. This contact creates pressure for the development of new transnational agreements
regarding business practices.
c. International trade and trading blocs such as the EU and NAFTA are growing.
d. All of these reasons.
PTS: 1
40. Which of the following ethical dilemmas is addressed by the Sarbanes Oxley Act?
a. Competition
b. Auditor responsibility and independence
c. Sourcing of cheap labor
d. Company strategy
PTS: 1
ESSAY
1. Discuss some of the issues that make international business ethics more complex than
domestic business ethics.

2. Do laws always reflect a community’s ethics? Give an example to explain your
answer.
3. Discuss the difference between teleological and deontological theories of ethics. Give
examples of how an international manager might appeal to either type of theory when
faced with the opportunity to offer a bribe.
4. How do social institutions and culture affect the practice of business ethics in
different countries?
5. Compare and contrast ethical relativism and ethical universalism. What are some of
the dangers of adopting either ethical relativism or ethical universalism when making
decisions?
6. Describe the U.S. FCPA, what makes it challenging for U.S. firms, and how they deal
with that challenge.
7. What are moral languages? How can moral languages help multinational become
more ethical?
8. Discuss some of the pressures for ethical convergence. What are some implications
for multinational management?
9. Compare and contrast prescriptive codes of ethics with proscriptive codes.
Chapter 5
Strategic Management in the Multinational Company: Content and Formulation
MULTIPLE CHOICE
1. Generic strategies
a. Occur when a company can outmatch its rivals in attracting and maintaining its
customers.
b. Represent basic ways that domestic and multinational companies keep and
achieve competitive advantage.
c. Are all based on finding ways to provide superior value to the customer.

PTS: 1
2. Which of the following is a primary generic strategy?
a. Cross country subsidizing
b. Low Cost
c. Competitive pricing
d. Critical success factors
PTS: 1
3. Differentiation leads to higher profits by
a. Charging a higher price than competitors.
b. Offering the customer better value.
c. Offering a product with more features and quality.
d. All of the above
PTS: 1
4. A low cost strategy leads to higher profits by
a. Charging a higher price than competitors.
b. Offering the customer products with more features.
c. The cost savings that firms achieve.
d. Adding unique features to products.
PTS: 1
5. __________ strategies achieve higher profits by charging higher prices.
a. Low cost
b. Differentiation
c. Competitive advantage
d. Generic

PTS: 1
6. The value chain
a. Represents a generic strategy.
b. Represents all the activities that a firm uses to market and deliver its products.
c. Represents all the activities that a firm uses to design, produce, market, deliver,
and support its products.
PTS: 1
7. Upstream activities in the value chain are concerned, in part, with
a. The primary activities.
b. The support activities.
c. Input logistics.
d. After market service.
PTS: 1
8. Support activities include
a. Research and development.
b. Service repair.
c. Output logistics.
PTS: 1
9. Sales and dealing with distribution channels refer to _________ activities in the value
chain.
a. Upstream
b. Support
c. Secondary
d. Downstream

PTS: 1
10. Capabilities that lead to competitive advantage must be
a. Valuable, rare, and easy to copy.
b. Fairly substitutable.
c. Valuable, rare, and hard to copy.
PTS: 1
11. Competitive strategies
a. Are examples of basic generic strategies.
b. Are moves multinationals and other companies use to defeat competitors.
c. Can be low cost or differentiation.
d. All of the above
PTS: 1
12. Offensive strategies
a. Are examples of basic generic strategies.
b. Are direct targeting/attacking of rivals.
c. Are attempts to reduce the risk of being attacked.
d. Are used to convince other firms to seek other targets.
PTS: 1
13. Defensive strategies include
a. Direct attacks, end-run offensive, and acquisitions.
b. The generic strategies.
c. Counter-parries.
PTS: 1

14. Strategies used to attempt to reduce the risk of being attacked are
a. Defensive competitive strategies.
b. Offensive competitive strategies.
c. Generic strategies.
PTS: 1
15. Counter-parry
a. Is an example of an offensive strategy.
b. Is an example of a generic strategy.
c. Is fending off a competitor's attack in one country by attacking the competitor in
another country.
PTS: 1
16. Corporate level strategies
a. Are similar to the generic strategies.
b. Pertain to the operation of corporate divisions.
c. Are concerned with how single business companies choose strategies.
d. Are concerned with how companies choose their mixtures of different businesses.
PTS: 1
17. Business level strategies
a. Include only the generic strategies.
b. Pertain to the operation of multiple businesses.
c. Are concerned with how single business companies choose strategies.
d. Are concerned with how companies choose their mixtures of different businesses.
PTS: 1

18. In related diversification
a. Companies acquire businesses in any country.
b. Companies acquire businesses in any industry.
c. Companies acquire businesses that are similar in some way to their core business.
PTS: 1
19. Acquisition of mixtures of businesses in any industry is
a. Low cost strategy.
b. Unrelated diversification.
c. Related diversification.
d. A business level strategy.
PTS: 1
20. This is considered to be a popular and controversial way to address internal cost
inefficiencies.
a. Insourcing
b. Outsourcing
c. Related diversification
d. Unrelated diversification
PTS: 1
21. Market size, ease of entry and exit, and economies of scale are all examples of
a. Defensive strategies.
b. Key success factors.
c. Dominant economic characteristics.
d. Differentiation.
PTS: 1
22. Key success factors are

a. Examples of defensive strategies.
b. Important characteristics of a company or its product that lead to success in an
industry.
c. Similar to generic strategies.
d. The economic characteristics of countries that lead to success.
PTS: 1
23. The acronym SWOT stands for
a. Strategies with organizational timelines.
b. Selection, withdrawal, opportunities, and timeliness.
c. Strengths, weakness, opportunities, and threats.
d. Strategies, winning, organizations, and tender offers.
PTS: 1
24. A strength is
a. A favorable condition in a company's environment.
b. Distinctive capability, resource, skill, or other advantage that a company has vis-
à-vis its competitors.
c. Represented by changes in the economic conditions in an industry.
PTS: 1
25. Weaknesses are
a. Lack of distinctive capabilities, resource, and skills that leads to competitive
disadvantage compared to competitors.
b. Unfavorable conditions in a firm's environment.
c. Relevant to both the internal and external environment of companies.
d. All of the above
PTS: 1

26. BMW and Mercedes view their Japanese rivals moves into the upscale car market as
a/an
a. Strength.
b. Weakness.
c. Opportunity.
d. Threat.
PTS: 1
27. Matrix analyses
a. Help assess business portfolios.
b. Divide businesses into successes and failures.
c. Are less complicated for the multinational company.
d. All of the above
PTS: 1
28. In the BCG Matrix, cash cows are
a. Businesses in a slow-growth industry where the company has a strong market
share position.
b. Businesses in a fast growing industry where the company has a strong market
share position.
c. Businesses in a slow-growth industry where the company has a weak market share
position.
d. Businesses in a fast growing industry where the company has a weak market share
position.
PTS: 1
29. In the BCG matrix, the appropriate strategy for dogs should be
a. Invest and Expand.
b. Defend and Harvest.
c. Divest.

PTS: 1
30. In the BCG Matrix, Defend and Harvest are the most popular strategies for
a. Stars.
b. Dogs.
c. Cash cows.
d. Problem children.
PTS: 1
31. Competitive advantage
a. Represent the basic ways that companies can provide superior value to customers.
b. Is one of the basic strategies.
c. Occurs when a company can outmatch its rivals in attracting and maintaining its
customers.
d. Is best achieved using a low cost strategy.
PTS: 1
32. The GE Portfolio matrix
a. Is the same as the Boston Consulting Group matrix.
b. Contains four cells based on industry and business strength.
c. Can be used to assess business level strategies.
d. Contains nine cells based on industry strength and business competitive position.
PTS: 1
33. Capabilities
a. Are the inputs into a company's production or service processes.
b. Are early activities in the value chain such as R&D and dealing with suppliers.
c. Are similar to distinctive competencies.
d. Represent the ability of companies to assemble and coordinate their resources in
ways that lead to lower costs of differentiated outputs.

PTS: 1
34. Favorable conditions in a firm's external environment are known as
a. Strengths.
b. Capabilities.
c. Opportunities.
d. Distinctive competencies.
PTS: 1
35. Which of the following more likely represents a threat to a multinational company
like Toyota?
a. Higher prices charged by Toyota's competitors.
b. Lower interest rates around the world that makes cars more affordable.
c. Toyota's bad image among teenagers.
d. Kia and Hyundai's entry in markets traditionally dominated by Toyota.
PTS: 1
36. A company that has a limited product range, and sells to certain buyers in some
geographical areas is said to have which of the following?
a. Broad competitive scope
b. Narrow competitive scope
c. Lack of competition
PTS: 1
37. Porter’s five forces help a multinational manager understand
a. The key success factors in an industry.
b. How to assess the attractiveness of the industries a company is involved in.
c. How to assess its unrelated diversification efforts.
d. The trends in its industry.

PTS: 1
38. Which of the following forces is NOT one of the forces considered in Porter’s five
forces analysis?
a. Degree of competition among existing competitors
b. Degree of governmental regulation in the industry
c. Threat of new entrants in the industry
d. Bargaining power of buyers in the industry
PTS: 1
39. The degree to which competitors are confronted with alternatives for their products is
referred to as which force in Porter’s five forces?
a. Threat of new entrants
b. Bargaining power of buyers
c. Degree of competition
PTS: 1
40. The national context affects strategy through which of the following processes?
a. Encourage or discourage certain forms of businesses and strategies in each
country
b. Factor conditions play a role in shaping each country’s unique resource base
c. Determine which resources are used, how they are used and which are developed
d. All of the above
PTS: 1
ESSAY
1. Describe the low cost strategy as compared to the differentiation strategy.
2. Regarding low cost and differentiation strategies, when is each strategy appropriate?

3. Compare and contrast defensive and offensive strategies. Discuss when a
multinational can use offensive strategies in one country and defensive strategies in
another.
4. What is the value chain? How can an understanding of the value chain help a
company be more successful in its generic strategy?
5. What is related diversification? When would you expect related diversification to be
more profitable than unrelated diversification?
6. What is sustainable competitive advantage? What are some essential characteristics of
company capabilities that can lead to sustainable competitive advantage?
7. Describe the SWOT analysis. Why is a SWOT analysis more complex for a
multinational than for a domestic company?
8. Discuss some of the major issues a multinational manager needs to take into
consideration when conducting an industry analysis.
9. What are key success factors? Discuss some KSFs that are most likely to vary by
national context.
10. Discuss each of Porter’s five forces model. What information can a multinational
obtain from Porter’s five forces industry analysis?
Chapter 6 Multinational and Entry-Mode Strategies: Content and Formulation
MULTIPLE CHOICE
1. According to the text, a fundamental dilemma faced by all multinationals is
a. The form of competitive strategy they should use.
b. How much they emphasize responding to differences in all the markets they
operate.
c. How to fight their rivals.
PTS: 1

2. Responding to differences in the markets in all the countries in which a company
operates is
a. The global-local dilemma.
b. The best strategy for success for a multinational.
c. The local-responsiveness solution.
d. The global solution.
PTS: 1
3. The global solution to the global-local dilemma refers to
a. Conducting business similarly around the world.
b. Responding to differences in the global markets in which a company operates.
c. Customization of products to regional but not country differences.
PTS: 1
4. Conducting business similarly throughout the world, and locating company units
wherever there is high quality and low cost is
b. The global integration solution.
c. The local responsiveness solution.
d. The multidomestic solution.
PTS: 1
5. A multidomestic company gives strategic priority to
a. Providing a low cost product to local customers.
b. Adapting a product or service to local needs.
c. Having multiple locations for sources its raw materials.
d. Controlling the strategic options of local companies.
PTS: 1

6. Which strategy attempts to balance advantages from three other multinational
strategies?
a. Regional
b. Multidomestic
c. Transnational
d. International
PTS: 1
7. Dispersing value-chain activities anywhere in the world where the company can do
them best or cheapest refers to seeking
b. Comparative advantage of nations.
c. Competitive advantage of firms.
d. Locations advantages.
PTS: 1
8. Comparative advantage is
a. Similar to competitive advantage.
b. A local responsiveness solution.
c. Where the company can produce the cheapest.
d. Advantages of nations over other nations.
PTS: 1
9. Comparative advantages are
a. Cost or quality advantages particular to a nation.
b. Similar to competitive advantages.
c. Emphasized through multidomestic strategies.
PTS: 1

10. Selling global products and using similar marketing techniques worldwide is an
example of a
a. Transnational strategy.
b. International strategy.
c. Multidomestic strategy.
d. Regional strategy.
PTS: 1
11. A regional strategy refers to
a. Managing raw-material sourcing, production, marketing, and support activities
within a particular region.
b. Selling global products and using similar marketing techniques worldwide.
c. Dispersing value-chain activities anywhere in the world where the company can
do them best or cheapest.
PTS: 1
12. Global companies usually seek to
a. Provide unique products for all countries of the world.
b. Take advantage of different factor costs among countries.
c. Manufacture their products in every country.
d. Focus only on downstream activities in the value chain.
PTS: 1
13. Common customer needs, global sources of raw material, and favorable trade policies
all lead to
a. An increased focus on local markets.
b. More use of the multidomestic strategy.
c. More use of the local solution to the global-local dilemma.
d. A greater likelihood that companies select global strategies.

PTS: 1
14. Having one set of products for North American countries and another set of products
for Europe illustrates which strategy?
a. Multidomestic
b. Regional
c. Transnational
d. Global
PTS: 1
15. Globalization drivers
a. Fall into four categories: market, costs, governments, and competition.
b. Are conditions in an industry that favor transnational or international strategies
over multidomestic or regional strategies.
c. Indicate the degree of globalization of an industry.
d. All of the above
PTS: 1
16. Asking diagnostic questions such as are there economies of scale, are there cheaper
sources of raw materials, are there global sources of low-cost raw materials provide
information regarding which globalization driver?
a. Global markets
b. Costs
c. Competition
d. Governments
PTS: 1
17. Entry-mode strategies
a. Include multidomestic and transnational strategies.
b. Are options multinationals have to enter foreign markets and countries.
c. Are only processes by which firms fill overseas orders like domestic orders.

PTS: 1
18. Using intermediaries or go-between firms to provide the knowledge and contacts
necessary to sell overseas is usually associated with
a. Direct exporting.
b. Franchising.
c. Indirect exporting.
d. Licensing.
PTS: 1
19. A company that treats and fills overseas orders like domestic orders is an example of
a
a. Indirect exporter.
b. Export management company.
c. Aggressive exporter.
d. Passive exporter.
PTS: 1
20. International franchising
a. Is a comprehensive licensing agreement where the franchisor grants to the
franchisee the use of a whole business operation.
b. When multinationals make a project fully operational and train local managers
and workers before the owner takes control.
c. The use of intermediaries or go-between firms to provide the knowledge and
contacts necessary to sell overseas is.
PTS: 1
21. When multinationals make a project fully operational and train local managers and
workers before the owner takes control, they are using which entry-mode strategy?
a. Licensing
b. Franchising

c. Turnkey
d. Direct export
PTS: 1
22. When a firm from another country has an equity (or ownership) position in a separate
company, it is engaging in
a. An international cooperative alliance.
b. A turnkey operation.
c. A contract manufacturer.
d. FDI.
PTS: 1
23. Foreign direct investment
a. Is an entry-mode strategy.
b. Means that a multinational owns, in part or in whole, an operation in another
country.
c. Symbolizes the highest rate of internationalization.
d. All of the above
PTS: 1
24. Major drawbacks of licensing include
a. The risk of losing the capital investment.
b. The risk of the local government changing international trade policies.
c. The loss of control and the possibility of creating a new competitor.
d. All of the above
PTS: 1
25. Companies should license if
a. They want to control all aspects of operation.
b. Their product is older or a soon-to-be replaced technology.

c. They have the necessary resources to export or invest directly.
d. There are no tariffs or quotas.
PTS: 1
26. If a company seeks a strategic alliance with another firm, it is a
b. Franchising agreement.
c. Competitive agreement.
d. Cooperative agreement.
PTS: 1
27. Advantages of foreign direct investment include
a. Increased capital investment.
b. Greater control of product and marketing strategy.
c. Greater exposure to financial risks.
d. The lower costs of using expatriates managers.
PTS: 1
28. If management believes that it must control foreign sales, customer credit, and the
eventual sale of the product, then the company should choose which of the following
entry-mode strategies?
a. Indirect exporting
b. Licensing
c. Direct exporting
d. Franchising
PTS: 1
29. When deciding on an entry-mode strategy, cultural distance is
a. The physical distance between two countries.
b. Not the distance between an organization's culture and the local national culture.

c. Similar to the geographic distance.
PTS: 1
30. As entry-mode strategies, direct and indirect exporting have
a. High levels of control and low levels of risk.
b. Similar levels of risk and control as FDI.
c. Low levels of risk and control.
d. Are among the most risky.
PTS: 1
31. Which of the following strategies gives top priority to seeking location advantages
and to gaining operation efficiencies from worldwide operation?
a. Multidomestic strategy
b. Regional strategy
c. Transnational strategy
d. International strategy
PTS: 1
32. If strategists in a firm believe that centralizing key activities such as R&D is
necessary to reduce coordination costs and to achieve economies of scale, they are
more likely to choose
a. An international strategy.
b. A transnational strategy.
c. A local strategy.
PTS: 1
33. What dictates the choice of a multinational entry-mode strategy?
a. Strategic competition

b. Strategic reason to be in the market
c. Companies want to share risks and costs of developing technology
d. Companies want to achieve economies of scale
PTS: 1
34. If a company believes that it needs to control foreign sales, customer credit, and sale
of product to the customer, it is more likely to choose
a. Indirect exporting.
b. Rely on foreign intermediaries for export purposes.
c. Direct exporting.
PTS: 1
35. To deal with political risk, various private and government agencies offer
a. Insurance.
b. Assurance.
c. Investment.
PTS: 1
36. A company pursuing a regional strategy
a. Has worldwide products and a worldwide value chain.
b. Sells the same product using only minor modification in marketing and product
offerings.
c. Is similar to a company pursuing an international strategy.
d. Attempt to gain location advantages of more global transnational combined with
some of the local-adaptation advantages of the multidomestic company.
PTS: 1
37. Which of the following statements regarding exporting is FALSE?

a. Exporting is the easiest of entry-mode strategies.
b. Export can be of the passive form where overseas orders are treated like domestic
orders.
c. Export can be indirect where companies rely on intermediaries to sell overseas.
d. Because it is the easiest form of going international, exports are not as important
to the US economy.
PTS: 1
38. Foreign direct investment
a. Exists when two or more firms have an ownership position in a separate company.
b. Requires at least three separate companies to combine resources.
c. Exists when two or more companies agree to cooperate in any value-chain
activity.
d. The above statements are all true for equity international joint ventures.
PTS: 1
39. Which of the following refers to the negative impact of political decisions or events
on a multinational’s profitability?
a. Economic risk
b. Local government risk
c. Political risk
d. Control risk
PTS: 1
40. Which of the following is NOT a factor considered when assessing political risk?
a. The durability of the political system
b. The role of the government, unions and the media in political stability
c. The profitability
d. The reliability of the rule of law
PTS: 1

ESSAY
1. Describe the global-local dilemma. When is each solution most appropriate?
2. What are globalization drivers?
3. Discuss the conditions when a transnational or international firm is likely to
outcompete a multidomestic or regional strategist. Contrast this with the opposite
situation where the multidomestic is most likely to be successful.
4. Contrast the transnational and international strategies in their approach to location
advantages.
5. You work for a small company that has an innovative low-cost production method for
laser disks. A Japanese firm approaches your CEO to license the technology. The
CEO asks you to write a report detailing the risks and potential benefits of this deal.
What will you include in the report and why?
6. You work for a small company that has an innovative low-cost production method for
laser disks that allow it to produce at very low cost. A Belgian firm approaches your
CEO and offers to export your disks to Belgium for a commission. The CEO asks you
to write a report detailing the risks and potential benefits of this deal. What will you
include in your report and why
7. Under what conditions would a regional strategy be best for a multinational? Explain.
8. Discuss some key issues to consider when choosing an entry-mode strategy.
9. Discuss some general strategic considerations regarding multinational strategy when
choosing a entry-mode strategy.
10. What is political risk? Discuss some of the aspects of political risk assessment. How
can multinationals use political risk assessment?
Chapter 7 Small Businesses and International Entrepreneurship:
Overcoming Barriers and Finding Opportunities
MULTIPLE CHOICE

1. Small businesses differ from large businesses when going international primarily in
a. The available participation strategies.
b. The strategies they can use to go international.
c. Their founder's or entrepreneur's influence.
d. The available multinational strategies.
PTS: 1
2. Definitions of small businesses discussed in the text include the following EXCEPT
a. Number of employees.
b. Sales revenue.
c. Industry.
d. Type of product or service.
PTS: 1
3. An entrepreneur
a. Creates new ventures that seek profit and growth.
b. Is seldom the primary force behind a company's decision to go international.
c. Can accurately predict the risks and uncertainties of his/her ventures.
d. Faces less uncertainty than a multinational.
PTS: 1
4. When a company sets up a sales branch in a foreign country, it is at what stage of the
internationalization of the small entrepreneurial business?
a. Stage 1
b. Stage 2
c. Stage 3
d. Stage 4
PTS: 1

5. During the second stage (Export Management) of the small business model of
internationalization, the company
a. Fills international orders only.
b. Specifically seeks export sales.
c. Seeks increased sales from licensing.
d. Sets up a local sales office in another country.
PTS: 1
6. A global start-up is
a. A company that goes global from day one of its life.
b. A company that starts a global strategy after exporting.
c. A company that skips the first stage of the Small Business Model of
Internationalization.
PTS: 1
7. One of the major advantages of being involved in Stage 5 (Production Abroad) of the
stages of internationalization for small businesses is that it
a. Allows the company to cut the costs of direct investment.
b. Allows the company to avoid developing a globally integrated network.
c. Allows the company to gain local advantages such as product adaptation or
production effectiveness.
d. Almost insures that the company will survive and prosper.
PTS: 1
8. Global start-ups occur when
a. Companies have consistent licensing agreements.
b. Companies start exporting as soon as they receive their first order.
c. Companies begin as multinationals.
d. Companies move rapidly through the stages of internationalization.

PTS: 1
9. Which of the following has helped to level the playing field for small businesses
wanting to go international?
a. Technology and e-commerce
b. Sources of venture capital
c. Having a headquarters located near a major customer
d. The existence of trade shows
PTS: 1
10. The liabilities of size for small businesses imply that
a. Small businesses can grow as a result of going international.
b. Being small often means it may be more difficult to obtain necessary resources.
c. Small size creates only limited liability.
d. Small and new businesses can only succeed by exporting.
PTS: 1
11. Small business barriers to internationalization include all of the following EXCEPT
a. Small size means limited financial and personnel resources for international
operations.
b. Top managers with limited international experience.
c. Positive attitudes of top managers about becoming multinationals.
d. Lack of sufficient scale to produce goods or services as efficiently as large
companies.
PTS: 1
12. Although large businesses have more resources, small businesses have the advantage
of:
a. size.
b. time.
c. speed.
d. a global culture.

PTS: 1
13. A small business global culture occurs when
a. Small businesses face global competition.
b. Key decision makers view competition as more domestic than global.
c. Organizations have managerial and worker values that view strategic
opportunities as global and not just domestic.
d. Managers give priority to the relevance of national boundaries when conducting
international business.
PTS: 1
14. The development of a global culture is affected by all of the following characteristics
of the key decision makers EXCEPT
a. Ability to perform well at the domestic level.
b. International experience.
c. Perceived psychological distance to foreign markets.
d. Overall attitudes toward international strategies.
PTS: 1
15. All of the following are true about small business CEOs EXCEPT
a. Opening new markets is often the personal responsibility of the CEO.
b. They want to take a break from the daily management of their businesses by going
overseas.
c. New international ventures may threaten their family life.
d. Their attitudes towards internationalization is a major factor in international
success.
PTS: 1
16. Small businesses can potentially have more advantages than larger businesses in the
global economy because
a. Small companies can change quickly to take advantage of opportunities in new
markets.
b. Larger companies have more slack resources to absorb risk.

c. Small companies require a lot of travel from their CEOs.
d. Small companies have more access to resources.
PTS: 1
17. The small business advantage refers to
a. The energy and creativity entrepreneurs can put in their multinational operations.
b. The ease by which small companies can become global start-ups.
c. The speed by which entrepreneurs can react to changing conditions and capture
significant sales before larger companies can react.
d. The number of venture capitalists willing to invest in successful small businesses.
PTS: 1
18. It is now easier to overcome the barriers to small business internationalization
because of all of the following reasons EXCEPT
a. There are more government programs that support small business exporting and
sales.
b. Trade agreements (such as NAFTA) are making international trade less complex.
c. Larger organizations are increasingly more willing to share their global expertise
with smaller ones.
d. There is a wealth of information regarding international opportunities such as
those available on the World Wide Web.
PTS: 1
19. Which of the following is not one of the questions to consider when a small business
decides to go international?
a. Do we have a global product or service?
b. Do we have partners with which to go international?
c. Do we have the managerial, organizational, and financial resources to go
international?
d. Is there a profitable market for our products or service?

PTS: 1
20. A strategic competitive advantage for breaking into the established pattern of
commercial activity is a/an
b. Differentiation Strategy.
c. Entry wedge.
d. Participation strategy.
PTS: 1
21. According to the text, which of the following participation strategies do small
businesses emphasize?
a. Importing
b. Licensing
c. Foreign direct investment
d. Exporting
PTS: 1
22. The more common techniques of making international contacts used by small
businesses include all of the following EXCEPT
a. Trade shows.
b. Seeking advice from foreign companies.
c. Government sponsored trade missions.
d. Catalogue expositions.
PTS: 1
23. An entry wedge is
a. A strategic competitive advantage for breaking into the established pattern of
commercial activity.
b. A competitive opening in an industry.
c. A strategy used by only new companies.

PTS: 1
24. First mover advantages occur when
a. A company can begin business as a global start-up.
b. A company adopts global strategies faster than competitors.
c. Company moves quickly into a new venture and establishes the business before
other firms can react.
d. A company changes production technology.
PTS: 1
25. Technological leadership, as a source of first mover advantage refers to
a. A company beginning business as a global start-up.
b. A company that adopts global strategies faster than competitors.
c. A company that moves quickly into a new venture.
d. A company that is the first to use a new technology.
PTS: 1
26. First mover advantage includes all of the following EXCEPT
a. Technological leadership.
b. First access to natural and other resources.
c. Better ability to forecast market conditions.
d. Switching costs.
PTS: 1
27. Copycat businesses
a. Follow the “me too” strategy.
b. Adapt existing products or services to attract customers.
c. Find a niche or slight innovation to gain market share from existing businesses.
d. All of the above

PTS: 1
28. Successful strategies for copy cats include all of the following EXCEPT
a. Being the first to change to a new standard.
b. Transferring the location.
c. Seeking abandoned or ignored market.
d. Selling products at a global level.
PTS: 1
29. Future Tech International sells high tech products in Latin America, a market
traditionally ignored by many high tech companies. What successful copycat strategy
does this move represent?
a. Acquiring existing businesses
b. Becoming a dedicated distributor
c. Seeking abandoned or ignored markets
d. Being the first to change to a new standard
PTS: 1
30. Switching costs are
a. Expenses involved when a customer switches to a competitor's product.
b. Forms of copycat strategies.
c. The costs incurred by a company when adopting a global standard.
PTS: 1
31. The United Nations and Organization for Economic Cooperation and Development
a. Defines a small business as those having less than 500 employees.
b. Defines a small business as those with less than 100 employees.
c. Defines a small business based on industry and sales revenue.
d. All of the above

PTS: 1
32. When a small business uses significant resources to seek increased sales from
exporting, it is what stage of internationalization?
a. Stage 1 - Passive exporting
b. Stage 2 - Export management
c. Stage 3 - Export department
d. Stage 4 - Sales branch
PTS: 1
33. International sales intensity represents
a. A significant size barrier to internationalization.
b. The amount of international sales as a proportion of total sales.
c. The amount of local sales as a proportion of international sales.
d. Is more relevant for larger businesses.
PTS: 1
34. All of the following are first mover advantages EXCEPT
a. First mover advantages gives the company first access to natural resources.
b. First mover advantages gives the company first access to social resources.
c. First mover advantages reduce switching costs.
d. All of the above are first mover advantages.
PTS: 1
35. The discovery, evaluation and exploitation of market opportunities refers to which of
the following?
a. Entrepreneurship
b. International entrepreneurship
c. Small business
d. International opportunities

PTS: 1
36. Which of the following statements about small businesses in the US is FALSE?
a. Small businesses represent about 99.7% of all employing firms.
b. Small businesses generate about 15% of all new jobs annually.
c. Small businesses employ almost 41% of all high tech workers.
d. Small businesses represent almost 97% of identified exporters.
PTS: 1
37. When demand for a small business is so high in a foreign country that it justifies
setting up a local branch, which of the following stages of internationalization is the
small business at?
a. Export management
b. Passive exporting
c. Production abroad
PTS: 1
38. A multinational manager is studying the data on total entrepreneurial activity ratings
by country. She is most likely doing this in order to
a. Assess the level of entrepreneurship in a country.
b. Understand available industries.
c. Assess small business failure.
d. Understand opportunities for new ventures.
AACSB Analytic, Creation of value
PTS: 1
39. Many multinationals rely on the support and assistance provided by which of the
following when entering a new country?
a. Customers
b. Entrepreneurs and small businesses
c. World Bank
d. Trade Shows

PTS: 1
40. Which of the following is NOT a common customer contact technique used by small
firms to get find customers?
a. Trade shows
b. Industry advisory boards
c. Government sponsored trade missions
d. Catalog expositions
PTS: 1
ESSAY
1. Why are small businesses important for most economies?
2. What are the advantages of a small business going international through incremental
stages rather than as a global start-up?
3. Describe the Small Business Stage Model.
4. Discuss some of the advantages that the Internet can offer small businesses when
going international.
5. Identify two or three small business barriers to internationalization. If you were a
recently hired manager of a small business facing great opportunities in a foreign
market, how would you go about overcoming these barriers.
6. Imagine a small business manager asks you, a recent business college graduate, to
help her decide whether she should enter the export market. What questions would
you ask her and why?
7. How do small businesses and entrepreneurs affect national economic growth and
development? Explain why multinationals consider entrepreneurship levels in the
country when making their location choices.

8. Discuss ways that a small business manager can make the contacts necessary to
implement an exporting strategy.
9. Consider three of the suggested strategic moves for copycat businesses. Which of
these strategies might be most successful when expanding into the international
market as opposed to the domestic market?
10. What is the first mover advantage? What are the most common sources of first mover
advantages? How can a small business benefit from first mover advantage?
Chapter 8 Organizational Designfor Multinational Companies
MULTIPLE CHOICE
1. The manner in which organizations structure subunits and use coordination and
control mechanisms to achieve their strategic goals is the
a. Organizational structure.
b. Organizational culture.
c. Degree of formalization.
d. Organizational design.
PTS: 1
2. The functional structure is considered most efficient when
a. An organization gets too large.
b. When customers need special functions.
c. When the organization is in the mature phase of the life cycle.
d. When organizations have few products.
PTS: 1
3. All of the following statements are true about the functional structure EXCEPT
a. In the functional structure, departments perform separate business functions such
as marketing or manufacturing.
b. The functional structure is the simplest of organizations.
c. In small organizations, the functional structure is the least efficient of all
structures.
d. Because functional subunits are separated from each other, coordination among
the units can be difficult.

PTS: 1
4. One of the major reasons why companies choose a functional structure is because
a. It allows adapting products to country tastes.
b. It enables responding to the needs of different types of customers.
c. It helps balance the strategy with the organization design.
d. It helps achieve efficiency.
PTS: 1
5. All of the following statements are true about product structures EXCEPT
a. The product structure is the most efficient of all structures.
b. Product organizations must still perform some functional tasks of a business.
c. The structure builds a department or subunit around a product .
d. Managers choose product structures when they believe that a product or a group
of products is sufficiently unique to require focused efforts on one type of product
or service.
PTS: 1
6. The least efficient of the following structural options is
a. Product structure.
b. Functional structure.
c. Vertical structure.
d. Graphic structure.
PTS: 1
7. Organizations that are designed with mixtures of structures that are the best to
implement their strategies are
a. Product structures.
b. Geographic structures.
c. Hybrid structures.

Mgt 510 midterm and final exam – strayer new

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