Business has become a unified, global field as trade

barriers fall, communication becomes faster and cheaper,

and consumer tastes converge.
true
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.
False
The global stage of corporate international development
is also referred to as the stateless stage.
True
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.
False
The criterion traditionally used to classify countries as
developed or developing is per capita income.
True
Large international firms typically are called multinational
corporations.
True
The term top of the pyramid refers to the more than four
billion people who earn the least, as defined by per capita
income.

Fasle
Fifteen member states of the EU have adopted the rupee,
as a single European currency.
Fasle
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
False
There are three components to cultural intelligence:
cognitive, emotional, and physical.
True
A tendency to regard their own culture as superior and to
downgrade other cultures reflects an attitude called
geocentric.
False
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.
True
With exporting, the corporation transfers its products for
sale and its production facilities in foreign countries
False
Seeking cheaper sources of materials or labor offshore is
called offshoring.
True

The least costly and least risky direct investment is called

a greenfield venture.
False
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.
True
Countertrade is the barter of products for products rather
than the sale of products for currency.
True
To deal with the marketing of products in several
countries individually, a company in the international
stage often uses an international division.
True
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.
False
When a company builds a subsidiary from scratch in a
foreign country it is called a greenfield venture.
True
One advantage to acquiring a wholly owned foreign
affiliate is that the company that acquires it would then
have complete control.
True
A form of direct investment is franchising.

False
The goal of the European Union is to create a powerful
single market system for Europe's millions of consumers.
True
The sub-divisions of the international environment are
the economic, the sociocultural, and the legal- political
environments.
True
The basic management functions of planning, organizing,
leading, and controlling are the same whether a company
operates domestically or internationally.
True
Because of cheap labor, most international business firms
are headquartered in the less developed countries of Asia
and South America.
False
A multinational corporation typically receives more than
25 percent of its total sales revenues from operations
inside the parent's home country.
False
An MNC is managed as an integrated worldwide business
system.
True
The primary emphasis of polycentric companies is on
their home countries.
False

Geocentric companies are truly world-oriented and favor

no specific country.
True
A country's physical facilities that support economic
activities make up its infrastructure.
True
The estimated 2010 misery index figures suggest
significantly less miser" for almost every country as
compared to figures at the beginning of the century.
False
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.
False
The countries experiencing political stability face the
greatest threat of violence.
False
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.
True
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.
False

The social value of uncertainty avoidance is evident in

countries like Japan which support beliefs that provide
stability and conformity among its citizenry.
True
Collectivism means a preference for a tightly knit social
framework in which individuals look (after one another
and organizations protect their members' interests
True
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.
True
According to the GLOBE Project, gender differentiation
refers to the e6tent to which a society maximizes gender
role differences.
True
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.
True
Social values greatly influence organizational functioning
and management styles.
True
According to the GLOBE Value Dimensions, Japan and
Russia both have very high performance orientation.
False

When an organization has a humanistic attitude, it values

employees as an end in themselves.
True
A high performance orientation means that a society
encourages toughness, assertiveness, and
competitiveness.
False
A low-context culture is a culture in which communication
is used to enhance personal relationships.
False
A high-context interaction requires more time because a
relationship has to be developed, and trust and friendship
must be established.
True
Ethnocentrism refers to a natural tendency of people to
regard their own culture as superior and to downgrade or
dismiss other cultural values.
True
Ethnocentrism refers to a natural tendency of people to
regard their own culture as inferior to other cultures.
False
German, Swiss, and North American cultures are among
the high-context cultures.
False

The extent to which trade and investments, information,

social and cultural ideas, and political cooperation flow
between countries is called _____.
a. standardization
b. industrialization
c. globalization(C)
d. internationalism
e. linguistic pluralism
Today's companies compete in a ____.
a. growingly domestic
b. low-context culture
c. high-context culture
d. Greenfield economy
e. borderless world(E)
____ is a concept that proposes that corporations can
alleviate poverty and other social ills by selling to the
world's poorest people.
a. Cream of the crop
b. Skimming the barrel
c. Bottom of the pyramid(C)
d. Top of the peak
e. Base hierarchy
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 strategy(A)
b. Skimming the barred strategy
c. Cream of the crop strategy

d. Top of the peak strategy

e. Base price strategy
Companies that think ____ have a competitive edge.
a. globally(A)
b. regionally
c. nationally
d. strategically
e. "customers first"
In which stage, market potential is limited to home
country, with all production and marketing facilities
located at home?
a. Domestic(A)
b. International
c. Global
d. Multinational
e. Stateless
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. Domestic(A)
b. regional
c. International
d. Multinational
e. Global
In the ____ stage a company usually adopts a
multidomestic approach.
a. Global
b. Multinational

c. Stateless
d. International(D)
e. Domestic
Global Dandelion, with marketing and production facilities
located in many countries, is participating at what stage in
the international arena?
a. International stage
b. Global stage
c. Domestic stage
d. Multinational stage(D)
e. Interdomestic stage
Quality-cast Telecom with an international division would
be participating in what stage of the international arena?
a. Domestic stage
b. International stage(B)
c. Multinational stage
d. Global stage
e. Binational stage
Stateless stage is also referred to as the ____ stage.
a. multinational
b. global(B)
c. multidomestic
d. international
e. domestic
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 stage(A)
b. Multinational stage

c. International stage
d. Domestic stage
e. Multidomestic stage
____ places an emphasis on a worldwide perspective.
a. Polycenric companies
b. Geocentric companies
c. Ethnocentric companies
d. Regiocentric companies
e. Domestic companies
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(D)
e. multinational stage
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. Franchising
b. Licensing
c. Market entry strategy
d. Outsourcing(D)
e. Activity
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(C)
d. franchising
e. none of these
Most firms begin With which strategy to enter foreign
markets?
a. Exporting(A)
b. Greenfield
c. Joint venture
d. Acquisition
e. Direct investment
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. Franchising
b. Licensing
c. Exporting(C)
d. Greenfield venture
e. Joint venture
What is exporting?
a. Countertrade
b. The barter of products for products, often used in
developing nations
c. Items produced in the home country for sale in foreign
markets
d. All of these
e. None of these
Go RVing, a U. S. company, built a subsidiary from scratch
in England. This is an example of:

a. franchising
b. greenfield(B)
c. joint venture
d. exporting
e. licensing
All of the following are components of cultural
intelligence, except _____.
a. physical
b. cognitive
c. emotional
d. analytical(D)
e. all of these
The Nissan plant in Mississippi is an example of a ____ .
a. greenfield venture(A)
b. joint venture
c. direct investment
d. foreign affiliate
e. direct acquisition
Exporting, licensing, and direct investing are called ____
strategies because they represent alternative ways to sell
products and services in foreign markets.
a. globalized
b. expansion
c. retrenchment
d. market entry(D)
e. concentrated business
As a first step into international business, which two
countries are most companies going to today?
a. Russian and Japan
b. Sweden and Germany

c. China and India(C)

d. Brazil and Philippines
e. Indonesia and Brazil
____ is the most widespread approach to international
involvement in China and India.
a. Importing
b. Exporting
c. Manufacturing
d. Outsourcing(D)
e. Greenfield venture
Heineken begins by exporting its product into new
markets, and then ____ to a local brewer to establish its
position in the market.
a. countertrades
b. licenses(B)
c. exports
d. franchises
e. markets
Which of the following is a form of franchising?
a. Direct investing
b. Licensing(B)
c. Exporting
d. Countertrade
e. Barter trade
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. 8uch a what type of direct investment?

a. Franchising
b. Joint Venture(B)
c. Wholly owned affiliate
d. Greenfield venture
e. Outsourcing
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 affiliate
b. A greenfield venture agreement
c. A franchise(C)
d. An export agreement
e. Barter trade
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/franchising
b. Wholly owned foreign affiliate/countertrade
c. Exporting/licensing
d. Franchising/licensing(D)
e. All of these
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.

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. Franchising
b. Exporting
c. Direct investing(C)
d. Barter agreement
e. Licensing
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 chaos
b. Civilization distress
c. Culture confusion
d. societal disorder
e. Culture shock(E)
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
____aspects of management do not change when doing
business internationally.
a. Planning
b. Organizing
c. Controlling

d. Leading
e. All of these(E)
Language, values, religion, and education all describe
which dimension in the international environment?
a. Economic
b. Legal
c. Political
d. Sociocultural(D)
e. Technological
In international operations, the economic environment
represents all of the following factors except:
a. infrastructure
b. resource and product markets
c. laws and regulations(C)
d. inflation
e. exchange rates
Resource development, infrastructure, and exchange rates
all describe which dimension in the international
environment?
a. Economic(A)
b. Legal
c. Political
d. Sociocultural
e. Technological
In international operations, the economic environment
includes:
a. shared knowledge, beliefs and values.
b. political risks.
c. social organizations.

d. infrastructure.(D)
e. tariffs, quotas, and taxes.
Which of the following is a sociocultural factor in the
international environment?
a. Language(A)
b. Exchange rates
c. Tariffs, taxes, and quotas
d. Percapita income
e. Infrastructure
____ is normally used to classify countries as developed or
developing
a. Exchange rates
b. Interest rates
c. Gross national product
d. Percapita income(D)
e. Inflation rates
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(B)
c. infrastructure
d. economy
e. power distance
____ generally are located in Asia, Africa and South
America.
a. MNCs
b. EUs
c. LDCs (C)

d. WTOs
e. MFNs
Exchange rates are included in which of the following
international environments?
a. The legal- political sector
b. The economic environment
c. The sociocultural environment
d. The barter system environment
e. The government sector
A form of exporting to less-developed countries called:
a. licensing
b. franchising
c. greenfield venture
d. joint venture
e. countertrade(E)
A country's physical facilities that support economic
activities make up its ____.
a. resource markets
b. infrastructure
c. physical markets
d. product markets
e. plants and equipment
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 among countries of the
b. Market demands differ for products and services

throughout
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 factors.
If you built a computer company in Africa and then found
that your product was having difficult" 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.
The legal-political environment, in international
operations, includes which of the following?
a. Shared knowledge, belief s and values
b. Political risks
c. Social organizations
d. Infrastructure
e. None of these
Political risk is defined as an organization's risk of
____due to politically based events or actions by host
governments.
a. loss of assets
b. managerial control
c. earning power
d. all of these
e. managerial control and earning power only

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(B)
c. tariffs
d. political instability
e. terrorism
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- political (A)
b. Sociocultural
c. Technological
d. Economic
e. Infrastructure
Which of the following is NOT a legal-political factor in
the international environment?
a. Laws and regulations
b. Language(B)
c. Tariffs, quotas, taxes
d. Political risk
e. Government takeovers
All of the following are considered emerging economies
EICEPT ____..
a. Brazil
b. Russia
c. India
d. China
e. Canada(E)

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.(C)
d. international law.
e. social risk.
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 instability(A)
b. Communist governments.
c. Economic instability.
d. Political risk
e. Financial risk
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 distance
b. culture (B)
c. masculinity
d. individualism
e. uncertainty avoidance
Which of the following companies place an emphasis on
their home countries?
a. Polycentric
b. Geocentric
c. Ethnocentric(C)

d. Global
e. Regiocentric
Cultural factors in foreign countries are ____ the political
and economic factors.
a. easier than
b. similar to
c. more perplexing than (C)
d. less important than
e. none of these
____ refers to the degree to which people accept
inequality in power among institutions, organizations, and
people.
a. Power distance(A)
b. Uncertainty
c. Individualism
d. Collectivism
e. Masculinity
Countries whose social values reflect low power distance:
a. are highly democratic
b. accept inequality in power among institutions.
c. expect equality in power
d. avoid uncertainty
e. none of these
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. Cognitive.
b Emotional

c. Physical(C)
d. Tangible
e. Intangible
When organization managers have a(n) ____attitude, they
treat employees as resources to be used
a. ethnocentric
b. humanishtic
c. instrumental (C)
d. pluralistic
e. performance
A loosely knit social framework in which individuals are
expected to take care of themselves is called:
a. culture
b. individualism(B)
c. ethnocentrism
d. masculinity
e. power distance
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
Collectivist values are represented in the social framework
of which of these?
a. The United States
b. Australia
c. Ecuador(C)

d. Great Britain
e. All of these
____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 distance
b. Uncertainty avoidance(B)
c. Certainty avoidance
d. Conformity seekers
e. None of these
Which of these reflects a cultural preference for
cooperation, group decision making, and quality of life?
a. Individualism
b. Collectivism
c. Masculinity
d. Femininity(D)
e. Power distance
Which of the following countries possesses a high
performance orientation?
a. Israel
b. Sweden
c. Taiwan(C)
d. Russia
e. Venezuela
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."
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). (C)
d. closing your eyes (boredom).
e. a pat on the back (congratulations).
Countries that use several languages:
a. are ethnocentric.
b. are geocentric.
c. Care likely to have high uncertainty avoidance.
d. have linguistic pluralism.
e. are polycentric
Austria's cultural preference is for achievement, heroism,
assertiveness, and material success. This would be
considered:(C)
a. power distance.
b. individualism.
c. masculinity.
d. ethnocentrism.
e. collectivism
One of Hofstede's social values that was developed later
is:(E)
a. power distance.
b. uncertainty avoidance.
c. masculinity.
d. collectivism.
e. long-term orientation

Recent research by the GLOBE project has extended

research and offered new insights for managers.
a. Hofstede's(A)
b. Walton's
c. Weber's
d. Fayol's
e. Gilbreth's
All of the following are cultural dimensions as defined by
the GLOBE Project, except ___.
a. assertiveness
b. gender differentiation
c. social collectivism
d. humane orientation
e. masculinity(E)
In countries where women are often in positions of high
status, the Globe Project would describe that culture as
high in .
a. assertiveness
b. uncertainty
avoidance
c. gender differentiation(C)
d. societal collectivism
e. performance orientation
A country that places emphasis on fairness and values
kindness would be described by the Globe Project as high
in ____ .
a. assertiveness
b. uncertainty
avoidance
c. gender differentiation

d. humane orientation(D)
e. societal collectivism
When organization managers have a(n) _______ attitude,
they value employees as an end in themselves.
a. ethnocentric
b. humanistic(B)
c. instrumental
d. pluralistic
e. performance
Which of the following countries possesses a high degree
of assertiveness?
a. Spain(A)
b. Sweden
c. Japan
d. Iceland
e. Switzerland
Which of the following countries possesses a low degree
of gender differentiation?
a. China
b. Brazil
c. Italy
d. South Korea
e. Denmark(E)
In a(n) ____, people use communication primarily to
exchange facts and information.(E)
a. power culture
b. informational culture
c. high-context culture
d. mid-context culture
e. low-context culture

A ___ interaction requires more time because a

relationship has to be developed, and trust and friendship
must be established.
a. high-context(A)
b. sales
c. business
d. low-context
e. personal
A cultural attitude marked by the tendency to regard one's
own culture as superior to others is called:
a. ethnocentrism.(A)
b. polycentrism.
c. geocentrism
e. technocentrism.
e. none of these
which of the following is defined as a culture in which
communication is used to enhance personal relationships?
a. Interpersonal culture
b. High-conte6t culture(B)
c. Power culture
d. Low-context culture
e. Family-oriented culture
How many nations signed on for negotiation when GATT
was created in 1947? (B)
a. 15
b. 23
c. 28
d. 40
e. 57

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-oriented
b. Passive
c. Assertive
d. Low-context
e. High-context(E)
The European Union has expanded to a ____ nation
alliance. (C)
a. 41
b. 12
c. 27
d. 16
e. 21
Which of these is a low-context culture? (A)
a. German
b. Chinese
c. Korean
d. Arab
e. Japanese
for the past several years, foreign companies have
invested more in business in ____ than in any other place
in the world. (C)
a. Brazil
b. India
c. China

d. United States
e. Russia
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. Laos
b. United States
c. Mexico
d. China(D)
e. Japan
With its large English-speaking population, ____has
numerous companies offering services such as call-center
operations, data-processing, computer programming, and
technical support.
a. Greenland
b. Russia
c. China
d. Mexico
e. India(E)
Which of the following has a goal to guide the nations of
the world toward free trade and open markets?
a. GATT
b. WTO(B)
c. GLOBE
d. EU
e. NAFTA
The ____ is a single European currency that replaced 12
national currencies and unify huge marketplace.
a. Mark
b. France

c. MFN
d. Euro(D)
e. Pound
Which organization originated and supports the idea of
small businesses operating on a global levelD?
a. GLOBE
b. EU
c. NAFTA(C)
d. ASEAN
e. GATT
Carrie's Car Care receives more than 25% of its total sales
revenues from operations outside of the United 8tates.
Carrie's would be considered a:
a. foreign national.
b. wealth company.
c. multinational corporation.(C)
d. globalization corporation.
e. None of these.
Which of the following characteristics distinguish a
multinational corporation? (D)
a. Top management perspective.
b. The corporation is controlled by a single management
authority
c. It is managed as an integrated worldwide business
system.
d. All of these
e. Top management is expected to take a global
perspective and single management authority only.
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 allexpenses 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.(B)
c. linguistic pluralism.
d. ethnocentrism.
e. geocentrism.
The degree of international involvement for the joint
venture is an example of:
a. outscoring
b. exporting
c. licensing
d. direct investing(D)
e. greenfield venture
The American firm joining in the joint venture:(A)
a. faces lower risk affiliate.
b .enjoys greater control than is it were using the whollyowned affiliate.
c. can anticipate a lower cost than a company that uses
global outscoring.
d. all of these.
e. none of these.

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.
international
MNCs that are oriented toward the markets of individual
foreign host countries are considered ____.
polycentric companies
MNCs that are truly world-oriented and favor no specific
country are considered ____.
geocentric companies
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.
multinational
A multinational corporation typically receives at least ____
% of its total sales revenues from outside the parent's
home country.
25
____ means engaging in the international division of labor
so that manufacturing can be done in countries with the
cheapest sources of labor and supplies.
Global outsourcing
____ is the barter of products for products rather than the
sale of products for currency.
Countertrade

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.
greenfield venture
____is the management of business operations conducted
in more than one country.
International management
When it comes to economic development, a currently
developing country is also called a(n) ____.
less-developed country (LDC)
____ is the criterion traditionally used to classify countries
as developed or developing.
Per capita income
____(objects, taboos, holidays) is a sociocultural factor in
the international environment.
Religion
The risk of loss due to actions by host country
governments is known as ____.
political risk
Riots, revolutions, civil disorders, and frequent changes in
government that affect the operations of an international
company shows ____ in a country
political instability
A country's physical facilities that support economic
activities make up its ____.
infrastructure

Companies need to be cautious of ____ and ____when

going international because they differ from country to
country.
laws; regulations
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.
culture
The degree to which people accept inequality in power
among institutions, organizations, and people is called
___.
power distance
____refers to a person's ability to use reasoning and
observation skills to interpret unfamiliar gestures and
situations and devise appropriate behavioral responses.
Cultural intelligence
A value characterized by people's intolerance for
uncertainty and ambiguity and resulting support for
beliefs that promise certainty and conformity refers to
____.
uncertainty avoidance
A preference for a loosely knit social framework in which
individuals are expected to take care of themselves is
called ____.
individualism

A preference for a tightly knit social framework in which

individuals loo( after one another and organizations
protect their members' interests refers to ____.
collectivism
____ stands for preference for achievement, heroism,
assertiveness, work centrality (with resultant high stress),
and material success.
Masculinity
____ reflects the values of relationships, cooperation,
group decision making, and quality of life.
Femininity
In countries where women are often in positions of high
status, the Globe Project would describe that culture as
high in ____.
gender differentiation
A country that places emphasis on fairness and values
kindness would be described by the Globe Project as high
in ____.
humane orientation
In a(n) ____, people use communication primarily to
exchange facts and information.
low-context culture
___ means that people have a tendency to regard their
own culture as superior to other cultures.
Ethnocentrism

An alliance begun in 1957 to improve economic and

social conditions among its members, it has evolved into
the 27-nation ____.
European Union
The ___ is the single European currency that has replaced
12 national currencies.
Euro
____ went into effect in early 1994, effectively creating a
megamarket among the U. S., Canada, and Mexico.
NAFTA
____ 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.
Culture shock
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 ____.
culture shock
List the four stages of globalization.
Domestic, international, multinational, and global/stateless
List three examples of a country's infrastructure.
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.
List the three examples of direct investing mentioned in
your text.

Joint venture, wholly owned foreign affiliate, and greenfield

venture.
List the three components of cultural intelligence
Physical, cognitive, and emotional
List the four dimensions of national value systems
identified by Hofstede.
Power distance, uncertainty avoidance,
individualism/collectivism, and masculinity/femininity.
List five of the countries that make up the European Union
(EU).
Choose any five of the following: Sweden, Finland,
Denmark, Ireland, United Kingdom, Luxembourg,
Netherlands, Germany, Belgium, France, Portugal, Spain,
Austria, Italy, and Greece.
Briefly describe the social characteristic of ethnocentrism
and explain how this can have an impact on the success
of an international manager.
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.
Briefly describe two personal challenges for global
managers.
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
What is global outsourcing? Identify a unique variation of
global outsourcing. 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
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.
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.
Identify and briefly explain at least two key factors in
economic, sociocultural and political-legal environments
that affect an organization.
Please refer to e6hibit 4-3 in the text
Briefly explain the difference between high power distance
and low power distance.
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
Describe GATT and the World Trade Organization
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.
Explain NAFTA
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,
manyU.S. groups have a number of reservations. These
include job loss to Mexico and weakened pollution
standards.
Bottom of the pyramid (BOP) concept
Proposes that corporations can alleviate poverty and other
social ills, as well as make significant profits, by selling to
the world's poor
In countries where women are often in positions of high
status, the Globe Project would describe that culture as
high in _____.
...
A country that places emphasis on fairness and values
kindness would be described be the Globe Project as high
in _____.
...
____ means that people have a tendency to regard their
own culture as superior to other cultures.
...
An alliance begun in 1957 to improve economic and
social conditions among its members, it has evolved into
the 27-nation _____.
...
The ___ is the single European currency that has replaced
12 national currencies.

...
____ went into effect in early 1994, effectively creating a
megamarket among the U. S. Canada, and Mexico.
...
____ 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.
...
In a(n) ____, people use communication primarily to
exchange facts and information.
...
List the four stages of globalization
...
List three examples of a country's infrastructure
...
List the three examples of direct investing mentioned in
your text.
...
List the three components of cultural intelligence
...
List the four dimensions of national value systems
identified by Hofstede.
...
List five of the countries that make up the European
Union(EU).

...
Briefly describe the social characteristic of ethnocentrism
and explain how this can have an impact on the success
of an international manager
...
Briefly describe two personal challenges for global
managers.
...
What is global outsourcing? Identify a unique variation of
global outsourcing.
...
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
...
Identify and briefly explain at least two key factors in
economic, sociocultural and political-legal environments
that affect an organization.
...
Briefly explain the difference between high power distance
and low power distance.
...
Describe GATT and the World Trade Organization.
...
Explain NAFTA.

...
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 ____.
...
Collectivism
A preference for a tightly knit social framework in which
individuals look after one another and organizations
protect their members' interests.
Direct investing
A market entry strategy in which the organization is
directly involved in managing its production facilities in a
foreign country.
Ethnocentrism
The natural tendency among people to regard their own
culture as superior to others.
Euro
A single European currency that has replaced the
currencies of 16 member nations of the European Union
(EU).
Exporting
A market entry strategy in which a company maintains
production facilities within its home country and transfers
products for sale in foreign countries.
Femininity
A cultural preference for relationships, cooperation, group
decision making, and quality of life.

Franchising
(1) A form of licensing in which a company provides its
foreign franchisees with a complete package of materials
and services. (2) An arrangement by which the owner of a
product or service allows others to purchase the right to
distribute a product or service with help from the owner.
Global mindset
The ability to appreciate and influence individuals, groups,
organizations, and systems that represent different social,
cultural, political, institutional, intellectual, and
psychological characteristics.
Global outsourcing
Engaging in the international division of labor so as to
obtain the cheapest sources of labor and supplies,
regardless of country. Sometimes called offshoring.
Globalization
The extent to which trade and investments, information,
ideas, and political cooperation flow between countries.
Greenfield venture
An investment in which a company builds a subsidiary from
scratch in a foreign country.
High-context culture
A culture in which people use communication to build
personal relationships.
Individualism
A preference for a loosely knit social framework in which
individuals are expected to take care of themselves.

Infrastructure
A country's physical facilities, such as highways, utilities,
and airports, that support economic activities.
International management
Managing business operations in more than one country.
Licensing
A strategy where a company in one country makes certain
resources available to companies in other countries to
participate in the production and sale of its products
abroad.
Long-term orientation
Reflects a greater concern for the future and a high value
on thrift and perseverance.
Low-context culture
A culture where people use communication primarily to
exchange facts and information.
Market entry strategy
A tactic that managers use to enter foreign markets.
Masculinity
A cultural preference for achievement, heroism,
assertiveness, work centrality, and material success.
Multinational corporation (MNC)
An organization that receives more than 25 percent of its
total sales revenues from operations outside the parent
company's home country and has a number of distinctive
managerial characteristics.

Political instability
Events such as riots, revolutions, or government upheavals
that can affect the operations of an international company.
Political risk
A company's risk of loss of assets, earning power, or
managerial control due to politically based events or
actions by host governments.
Power distance
The degree to which people accept inequality in power
among institutions, organizations, and people.
Short-term orientation
Reflects a concern with the past and present and a high
value on meeting current obligations.
Uncertainty avoidance
Characterized by people's intolerance for uncertainty and
ambiguity and resulting support for beliefs that promise
certainty and conformity.
Wholly owned foreign affiliate
A foreign subsidiary over which an organization has
complete control.