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Modern Management, 13e (Certo/Certo

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Chapter 5 Managing in the Global Arena
1) International management is the performance of management activities across national
borders.
Answer: TRUE
Page Ref: 103
Learning Outcome: Identify the fundamental concepts and issues of international business and
management
Objective: 1
Difficulty: Easy
Classification: Conceptual
2) Establishing a formal partnership with a foreign company is a form of international
management.
Answer: TRUE
Page Ref: 103
Learning Outcome: Identify the fundamental concepts and issues of international business and
management
Objective: 1
Difficulty: Easy
Classification: Conceptual
3) One form of international management is fighting competition in foreign markets.
Answer: TRUE
Page Ref: 103
Learning Outcome: Identify the fundamental concepts and issues of international business and
management
Objective: 1
Difficulty: Easy
Classification: Conceptual
4) Transnational organizations have the least international involvement of all types of
organizations involved in the international arena.
Answer: FALSE
Page Ref: 118
Learning Outcome: Identify the fundamental concepts and issues of international business and
management
Objective: 2
Difficulty: Easy
Classification: Conceptual

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Copyright © 2014 Pearson Education, Inc.

5) Domestic organizations essentially operate within a single country.
Answer: TRUE
Page Ref: 105
Learning Outcome: Identify the fundamental concepts and issues of international business and
management
Objective: 2
Difficulty: Easy
Classification: Conceptual
6) In order to be classified as a domestic corporation, a corporation must acquire all resources
and sell all products within one country.
Answer: FALSE
Page Ref: 105
Learning Outcome: Identify the fundamental concepts and issues of international business and
management
Objective: 2
Difficulty: Easy
Classification: Conceptual
7) An international organization has a lower level of international involvement than a
multinational organization.
Answer: TRUE
Page Ref: 105
Learning Outcome: Identify the fundamental concepts and issues of international business and
management
Objective: 2
Difficulty: Easy
Classification: Conceptual
8) A multinational corporation is a company that is primarily based in one country but has
continuing transactions in other countries.
Answer: FALSE
Page Ref: 105-106
Learning Outcome: Identify the fundamental concepts and issues of international business and
management
Objective: 2
Difficulty: Easy
Classification: Conceptual

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Copyright © 2014 Pearson Education, Inc.

9) A company that merely exports products to a foreign country cannot be considered a
multinational corporation.
Answer: FALSE
Page Ref: 106
Learning Outcome: Identify the fundamental concepts and issues of international business and
management
Objective: 2
Difficulty: Easy
Classification: Conceptual
10) A company that exports products to a foreign country and establishes sales organizations
abroad is considered to be a domestic company.
Answer: FALSE
Page Ref: 106
Learning Outcome: Identify the fundamental concepts and issues of international business and
management
Objective: 2
Difficulty: Easy
Classification: Conceptual
11) The host company is the company investing in international operations.
Answer: FALSE
Page Ref: 107
Learning Outcome: Identify the fundamental concepts and issues of international business and
management
Objective: 3
Difficulty: Easy
Classification: Conceptual
12) Expatriates are organization members who live and work in a country in which they are not
citizens.
Answer: TRUE
Page Ref: 109
Learning Outcome: Identify the fundamental concepts and issues of international business and
management
Objective: 4
Difficulty: Easy
Classification: Conceptual

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Copyright © 2014 Pearson Education, Inc.

Answer: FALSE Page Ref: 109-110 Learning Outcome: Identify the fundamental concepts and issues of international business and management Objective: 4 Difficulty: Easy Classification: Conceptual 16) A license agreement is a right granted by one company to another to use its brand name and technology in the manufacture or sale of goods and services. . or tax laws of the country where the organization is doing business. Answer: TRUE Page Ref: 111 Learning Outcome: Identify the fundamental concepts and issues of international business and management Objective: 5 Difficulty: Easy Classification: Conceptual 17) The European Union is an example of an international market agreement. Answer: FALSE Page Ref: 109 Learning Outcome: Identify the fundamental concepts and issues of international business and management Objective: 4 Difficulty: Easy Classification: Conceptual 15) Repatriation is the process of ensuring the adjustment of a worker to a foreign country.13) Host-country nationals do not need to be relocated or undergo training in the culture. Inc. Answer: TRUE Page Ref: 112 Learning Outcome: Identify the fundamental concepts and issues of international business and management Objective: 5 Difficulty: Easy Classification: Conceptual 4 Copyright © 2014 Pearson Education. Answer: TRUE Page Ref: 109 Learning Outcome: Identify the fundamental concepts and issues of international business and management Objective: 4 Difficulty: Easy Classification: Conceptual 14) Third-country nationals are organization members who are citizens of the country in which the facility of a foreign-born organization is located. language.

. Answer: TRUE Page Ref: 114-115 Learning Outcome: Identify the fundamental concepts and issues of international business and management Objective: 5 Difficulty: Easy Classification: Conceptual 19) A polycentric attitude reflects the belief that multinational corporations should regard homecountry management practices as superior to foreign-country management practices. international. global D) transnational.18) Managers with an ethnocentric attitude are prone to stereotype foreign management practices as faulty and unreasonable. domestic. what are the different types of organizations involved in the international arena? A) domestic. Inc. international Answer: A Page Ref: 105 Learning Outcome: Identify the fundamental concepts and issues of international business and management Objective: 1 Difficulty: Easy Classification: Conceptual 5 Copyright © 2014 Pearson Education. multinational. Answer: FALSE Page Ref: 115 Learning Outcome: Identify the fundamental concepts and issues of international business and management Objective: 5 Difficulty: Easy Classification: Conceptual 20) Transnational organizations usually take one particular continent as their business arena. transnational. domestic E) domestic. transnational B) international. multinational. Answer: FALSE Page Ref: 118 Learning Outcome: Identify the fundamental concepts and issues of international business and management Objective: 6 Difficulty: Easy Classification: Conceptual 21) In ascending order. transnational. domestic. multinational C) multinational. international. multinational. transnational.

A) Multinational B) Transnational C) Global D) Domestic E) International Answer: D Page Ref: 105 Learning Outcome: Identify the fundamental concepts and issues of international business and management Objective: 1 Difficulty: Easy Classification: Conceptual 6 Copyright © 2014 Pearson Education.22) Which of the following categories of organizations generally has the lowest level of international involvement? A) global organizations B) domestic organizations C) international organizations D) multinational organizations E) transnational organizations Answer: B Page Ref: 105 Learning Outcome: Identify the fundamental concepts and issues of international business and management Objective: 1 Difficulty: Easy Classification: Conceptual 23) Which of the following types of organizations has the highest level of international involvement? A) regional organizations B) national organizations C) transnational organizations D) ethnocentric organizations E) domestic organizations Answer: C Page Ref: 105 Learning Outcome: Identify the fundamental concepts and issues of international business and management Objective: 1 Difficulty: Easy Classification: Conceptual 24) ________ organizations essentially operate within a single country. . Inc.

and takes pride in sourcing all its raw materials locally. A) transnational organization B) global organization C) multinational organization D) domestic organization E) international organization Answer: D Page Ref: 105 Learning Outcome: Identify the fundamental concepts and issues of international business and management Objective: 1 Difficulty: Moderate Classification: Application 26) Adam & Sons is a fifty-year-old watch company based in Alabama. According to the information.25) SNL manufactures and sells customized shoes for people with special needs. . The organization caters mostly to customers within the United States.S distributors for Japanese watch manufacturer TLC. Adam & Sons would therefore be classified as a(n) ________. though it occasionally sends products to overseas customers. A) international organization B) multinational organization C) transnational organization D) global organization E) domestic organization Answer: A Page Ref: 105 Learning Outcome: Identify the fundamental concepts and issues of international business and management Objective: 1 Difficulty: Moderate Classification: Application 7 Copyright © 2014 Pearson Education. Adam & Sons recently became the sole U. SNL is a(n) ________. Inc. The major bulk of its sales has always taken place within the United States. The organization is very eco-friendly.

Which of the following actions would make BLT a multinational company? A) if it begins stocking organic foods produced by local farms B) if it distributes artisanal chocolate produced by a South African firm C) if it licenses a fast-food chain in England to use its brand name D) if it diversifies its product lineup to include different types of foods E) if it begins selling cheeses imported from France Answer: C Page Ref: 105-106 Learning Outcome: Identify the fundamental concepts and issues of international business and management Objective: 2 Difficulty: Moderate Classification: Application 29) An organization that has significant operations in more than one country. A) global organization B) domestic organization C) international corporation D) multinational corporation E) transnational organization Answer: D Page Ref: 105-106 Learning Outcome: Identify the fundamental concepts and issues of international business and management Objective: 2 Difficulty: Easy Classification: Conceptual 8 Copyright © 2014 Pearson Education.27) Which of the following describes a company that is primarily based within one country but has continuing and meaningful transactions in other countries? A) domestic organization B) international organization C) multinational organization D) transnational organization E) global organization Answer: B Page Ref: 105 Learning Outcome: Identify the fundamental concepts and issues of international business and management Objective: 1 Difficulty: Easy Classification: Conceptual 28) BLT is a sandwich chain based in Boston. and is guided by a common strategy from a corporation center is a(n) ________. . Inc. disregards national boundaries. It gained popularity due to word-of-mouth publicity and it is now opening branches in New Jersey and Connecticut as well. The company sources all its raw materials locally and makes it a point to use sustainable practices.

Jacoby. which of the following is the first stage of multinationalization? A) establishing sales organizations abroad B) licensing the use of the organization's patents and know-how to foreign firms that make and sell the organization's product C) establishing foreign manufacturing facilities D) multinationalizing the organization's management from top to bottom E) exporting the organization's product to foreign countries Answer: E Page Ref: 106 Learning Outcome: Identify the fundamental concepts and issues of international business and management Objective: 2 Difficulty: Easy Classification: Conceptual 31) What is the most advanced stage in multinationalization of a company? A) licensing its brand names to foreign firms B) establishing foreign manufacturing facilities C) establishing sales organizations abroad D) exporting the organization's products to foreign countries E) multinationalizing ownership of the corporate stock Answer: E Page Ref: 106 Learning Outcome: Identify the fundamental concepts and issues of international business and management Objective: 2 Difficulty: Easy Classification: Conceptual 32) Which of the following is a characteristic of domestic management? A) widely disparate economic conditions B) national markets varying greatly in population and area C) different national sovereignties D) markets at different stages of the industrial revolution E) people living in similar value systems Answer: E Page Ref: 106 Learning Outcome: Identify the fundamental concepts and issues of international business and management Objective: 5 Difficulty: Easy Classification: Conceptual 9 Copyright © 2014 Pearson Education. Inc. .30) According to Neil H.

Inc. . A) quasi company B) parent company C) subsidiary company D) holding company E) host company Answer: B Page Ref: 107 Learning Outcome: Identify the fundamental concepts and issues of international business and management Objective: 3 Difficulty: Easy Classification: Conceptual 34) A country in which an investment is made by a foreign company is termed as a(n) ________. A) Expatriates B) Host-country nationals C) Naturalized citizens D) Repatriates E) Dual citizens Answer: A Page Ref: 109 Learning Outcome: Identify the fundamental concepts and issues of international business and management Objective: 4 Difficulty: Easy Classification: Conceptual 10 Copyright © 2014 Pearson Education.33) A company investing in international operations is known as the ________. A) host country B) parent country C) home country D) expatriate country E) native country Answer: A Page Ref: 107 Learning Outcome: Identify the fundamental concepts and issues of international business and management Objective: 3 Difficulty: Easy Classification: Conceptual 35) ________ are members of an organization who live and work in a country where they do not have citizenship.

He is considered to be a(n) ________. Inc. . He is a(n) ________.36) Joe is a citizen of Sri Lanka who lives and works for a company in Brazil. A) host-country national B) third-country national C) repatriate D) expatriate E) immigrant Answer: A Page Ref: 109 Learning Outcome: Identify the fundamental concepts and issues of international business and management Objective: 4 Difficulty: Moderate Classification: Application 11 Copyright © 2014 Pearson Education. A) dual citizen B) expatriate C) repatriate D) host-country national E) home-country national Answer: B Page Ref: 109 Learning Outcome: Identify the fundamental concepts and issues of international business and management Objective: 4 Difficulty: Moderate Classification: Application 37) Citizens of a country who work in a foreign-based organization located in their own country are known as ________. A) expatriates B) host-country nationals C) third-country nationals D) repatriates E) immigrants Answer: B Page Ref: 109 Learning Outcome: Identify the fundamental concepts and issues of international business and management Objective: 4 Difficulty: Easy Classification: Conceptual 38) Gary is a British citizen working for an American company situated in London.

A) third-country national B) host-country national C) home-country national D) dual citizen E) repatriate Answer: A Page Ref: 109 Learning Outcome: Identify the fundamental concepts and issues of international business and management Objective: 4 Difficulty: Moderate Classification: Application 41) Zac. A) expatriates B) host-country nationals C) third-country nationals D) repatriates E) naturalized citizens Answer: C Page Ref: 109 Learning Outcome: Identify the fundamental concepts and issues of international business and management Objective: 4 Difficulty: Easy Classification: Conceptual 40) Hugh is an American citizen currently living in Denmark. D) Ursula is a Finn but has been in Germany for the last four years.K-based company in Venice. Which of the following scenarios mirrors the situation Zac is in? A) Sandra is Polish and works for a U. B) Winston is a U.K. national but has been sent to Canada by his company to handle the operations there for the next two years. He is a ________. E) Nikolai works for an Irish company in Oslo and is a Norwegian by birth. Answer: B Page Ref: 109 Learning Outcome: Identify the fundamental concepts and issues of international business and management Objective: 4 Difficulty: Difficult Classification: Application 12 Copyright © 2014 Pearson Education. .39) Organization members who are citizens of one country and work in another country for an organization headquartered in still another country are known as ________. C) Vanessa is English and works in London for a company based in Denmark. has worked for a company in Berlin for the last five years. working for a company headquartered in Japan. an American citizen. Inc. He works for a company that has its headquarters in France.

D) A host-country national is an organization member who lives and works in a country where he or she does not have citizenship. A) repatriation B) expatriation C) immigration D) polycentrism E) emigration Answer: A Page Ref: 109-110 Learning Outcome: Identify the fundamental concepts and issues of international business and management Objective: 4 Difficulty: Easy Classification: Conceptual 13 Copyright © 2014 Pearson Education. B) A host-country national will face problems adjusting to the culture of the country in which he works. Inc.42) ________ are least expensive to employ for organizations that operate globally. E) Host-country nationals are usually the most expensive to employ. Answer: C Page Ref: 109 Learning Outcome: Identify the fundamental concepts and issues of international business and management Objective: 4 Difficulty: Easy Classification: Conceptual 44) The process of bringing individuals who have been working abroad back to their home country and reintegrating them into the organization's home-country operations is called ________. C) Expatriates and third-country nationals have to be relocated and undergo training. . A) Host-country nationals B) Expatriates C) Third-country nationals D) Repatriates E) Migrant workers Answer: A Page Ref: 109 Learning Outcome: Identify the fundamental concepts and issues of international business and management Objective: 4 Difficulty: Easy Classification: Conceptual 43) Which of the following is true for employees of multinational organizations? A) A third-country national works for a foreign organization in its home country.

Inc.-based computer manufacturer sells a shipment of 40 computers to a retailer in Germany. A) importing B) exporting C) developing a license agreement D) direct investing E) repatriating Answer: B Page Ref: 110 Learning Outcome: Identify the fundamental concepts and issues of international business and management Objective: 5 Difficulty: Moderate Classification: Application 47) If a company in the United States allows a company in England to use its brand name for a fee.S. A) planning B) organizing C) influencing D) controlling E) observing Answer: A Page Ref: 110 Learning Outcome: Identify the fundamental concepts and issues of international business and management Objective: 5 Difficulty: Easy Classification: Conceptual 46) When a U. . the computer manufacturer is engaged in the process of ________. the company is said to have entered into a(n) ________. A) license agreement B) direct investing agreement C) venture agreement D) export agreement E) import agreement Answer: A Page Ref: 111 Learning Outcome: Identify the fundamental concepts and issues of international business and management Objective: 5 Difficulty: Moderate Classification: Application 14 Copyright © 2014 Pearson Education.45) The ________ function of management involves determining how an organization will achieve its objectives.

A) international market agreement B) direct investment C) joint venture D) license agreement E) franchise agreement Answer: C Page Ref: 111 Learning Outcome: Identify the fundamental concepts and issues of international business and management Objective: 5 Difficulty: Easy Classification: Conceptual 15 Copyright © 2014 Pearson Education. Inc. This action is known as ________.48) An American clothing manufacturer has recently purchased a clothing factory in Taiwan. . A) importing B) exporting C) licensing D) direct investing E) franchising Answer: D Page Ref: 111 Learning Outcome: Identify the fundamental concepts and issues of international business and management Objective: 5 Difficulty: Moderate Classification: Application 49) In which of the following areas does international planning emphasize reaching organizational objectives through the purchase of the operating assets of another company in a foreign country? A) direct investing B) joint venture C) importing D) exporting E) license agreements Answer: A Page Ref: 111 Learning Outcome: Identify the fundamental concepts and issues of international business and management Objective: 5 Difficulty: Easy Classification: Conceptual 50) A partnership formed by a company in one country with a company in another country for the purpose of pursuing some mutually desirable business undertaking is known as a(n) ________.

Inc. . A) The Asian Union B) The American Union C) The European Union D) The Global Union E) The Pan-Asian Union Answer: C Page Ref: 112 Learning Outcome: Identify the fundamental concepts and issues of international business and management Objective: 5 Difficulty: Easy Classification: Conceptual 16 Copyright © 2014 Pearson Education.51) International plans that include ________ emphasize the attainment of organizational objectives through partnerships with foreign companies. A) joint ventures B) imports C) exports D) license agreements E) direct investing Answer: A Page Ref: 111 Learning Outcome: Identify the fundamental concepts and issues of international business and management Objective: 5 Difficulty: Easy Classification: Conceptual 52) An international market agreement is ________. A) a joint venture between two companies who want to enter markets in the other country B) an arrangement among a cluster of countries that facilitates a high level of trade among these countries C) an international import deal between two countries D) an agreement between an importer from one country and an exporter from another E) an agreement between a multinational company and its franchisees in a number of countries Answer: B Page Ref: 111-112 Learning Outcome: Identify the fundamental concepts and issues of international business and management AACSB: Dynamics of the Global Economy Objective: 5 Difficulty: Easy Classification: Conceptual 53) ________ is an international market agreement dedicated to facilitating trade among member nations.

Canada. A) international license B) international market C) international framework D) international import E) international export Answer: B Page Ref: 111-112 Learning Outcome: Identify the fundamental concepts and issues of international business and management AACSB: Dynamics of the Global Economy Objective: 5 Difficulty: Easy Classification: Conceptual 55) Which of the following statements is true about NAFTA? A) It aims at facilitating trade among the United States. including Canada. the United Kingdom. C) It is an international market agreement aimed at facilitating trade among African nations. Answer: A Page Ref: 113 Learning Outcome: Identify the fundamental concepts and issues of international business and management Objective: 5 Difficulty: Easy Classification: Conceptual 56) APEC was established in 1989 to further the economic growth and prosperity of the ________ community. D) It works to reduce tariffs and other trade barriers across the Asia-Pacific region. and Mexico. Indonesia. . and the United States. This agreement is an example of an ________ agreement. and the United States are all members of the Asian-Pacific Economic Cooperation. Portugal. the Netherlands. Indonesia. Belgium. A) North American B) Asia-Pacific C) Commonwealth D) European E) African Answer: B Page Ref: 113 Learning Outcome: Identify the fundamental concepts and issues of international business and management Objective: 5 Difficulty: Easy Classification: Conceptual 17 Copyright © 2014 Pearson Education. the People's Republic of China. B) Its members include Denmark. Inc. E) It has 21 members. the People's Republic of China.54) Canada.

Inc. A) establishes the organization's goals for the year B) is the graphic illustration of organization structure C) lists the organizational policies D) details the organization's plans for achieving its goals E) is the representation of the organization's financial system Answer: B Page Ref: 114 Learning Outcome: Identify the fundamental concepts and issues of international business and management AACSB: Dynamics of the Global Economy Objective: 5 Difficulty: Easy Classification: Conceptual 18 Copyright © 2014 Pearson Education.57) Which of the following countries is a member of the APEC? A) Germany B) Egypt C) Canada D) Argentina E) Brazil Answer: C Page Ref: 113 Learning Outcome: Identify the fundamental concepts and issues of international business and management Objective: 5 Difficulty: Easy Classification: Conceptual 58) ________ is the sum of all established relationships among resources within an organization. A) Organization structure B) Organization overview C) Organization mission D) Organization path E) Organization purpose Answer: A Page Ref: 114 Learning Outcome: Identify the fundamental concepts and issues of international business and management Objective: 5 Difficulty: Easy Classification: Conceptual 59) The organization chart ________. .

Inc.S. . A) ethnocentric attitude B) polycentric attitude C) geocentric attitude D) xenocentric attitude E) gynocentric attitude Answer: A Page Ref: 114-115 Learning Outcome: Identify the fundamental concepts and issues of international business and management Objective: 5 Difficulty: Moderate Classification: Application 61) A Canada-based shoe manufacturing company in Malaysia has hired a Malaysian manager to manage it. management practices are better than the management practices prevalent in New Zealand. management practices is best for its operations in New Zealand because U. This company is said to have a(n) ________.S.60) The manager of a multinational corporation in the United States thinks that following U. A) ethnocentric attitude B) polycentric attitude C) egocentric attitude D) geocentric attitude E) gynocentric attitude Answer: B Page Ref: 115 Learning Outcome: Identify the fundamental concepts and issues of international business and management Objective: 5 Difficulty: Moderate Classification: Application 19 Copyright © 2014 Pearson Education. This manager is said to have a(n) ________. because the company's CEO believes that the manager will understand the situation and manage the plant better than any foreign manager.

Inc. they understand them better. should determine the acceptability of management practices used to guide multinational corporations. A) ethnocentric B) polycentric C) geocentric D) xenocentric E) gynocentric Answer: C Page Ref: 115 Learning Outcome: Identify the fundamental concepts and issues of international business and management AACSB: Dynamics of the Global Economy Objective: 5 Difficulty: Moderate Classification: Conceptual 64) A Belgium-based multinational company hires the best managers for its operations.62) The ________ attitude reflects the belief that because foreign managers are closer to foreign organizational units. This company is said to have a(n) ________. A) ethnocentric attitude B) polycentric attitude C) egocentric attitude D) geocentric attitude E) gynocentric attitude Answer: D Page Ref: 115 Learning Outcome: Identify the fundamental concepts and issues of international business and management Objective: 5 Difficulty: Moderate Classification: Application 20 Copyright © 2014 Pearson Education. and therefore foreign management practices are more insightful than home-country management practices. regardless of the location of those managers. A) ethnocentric B) polycentric C) egocentric D) geocentric E) gynocentric Answer: B Page Ref: 115 Learning Outcome: Identify the fundamental concepts and issues of international business and management Objective: 5 Difficulty: Moderate Classification: Application 63) Managers with a(n) ________ attitude believe that the overall quality of management recommendations. . rather than the location of managers.

.65) Which of the following statements is true for the various management attitudes? A) An organization characterized by the geocentric attitude incurs high travel and training expenses. they understand them better. E) Managers with a geocentric attitude stereotype home-country management practices as sound and reasonable and foreign management practices as faulty and unreasonable. Inc. B) The ethnocentric attitude reflects the belief that because foreign managers are closer to foreign organizational units. C) The ethnocentric attitude is generally thought to be the most appropriate for managers in multinational corporations. Answer: A Page Ref: 115 Learning Outcome: Identify the fundamental concepts and issues of international business and management AACSB: Dynamics of the Global Economy Objective: 5 Difficulty: Easy Classification: Conceptual 66) Which of the following attitudes is generally thought to be the most appropriate for managers in multinational corporations? A) geocentric B) ethnocentric C) polycentric D) egocentric E) regiocentric Answer: A Page Ref: 115 Learning Outcome: Identify the fundamental concepts and issues of international business and management Objective: 5 Difficulty: Easy Classification: Conceptual 21 Copyright © 2014 Pearson Education. D) The polycentric attitude often causes resentment toward the home country within the foreign society.

A) Culture B) Politics C) Laws D) Attitude E) Ethics Answer: A Page Ref: 115 Learning Outcome: Identify the fundamental concepts and issues of international business and management Objective: 5 Difficulty: Easy Classification: Conceptual 68) Countries that highly promote ________ have citizenry that tends to emphasize. which culture favors low individualism and high power distance D) India. but will require a culture that is very similar to its home culture: open to experimentation and risk and not authoritarian. Inc. which has a long-term orientation and high uncertainty avoidance E) France. expect. values. which has low power distance and low uncertainty avoidance C) Japanese. and accept more autocratic than democratic leadership. education and religion. . Which of the following countries is the best option for March Hare? A) Germany. which has low uncertainty avoidance and high power distance Answer: B Page Ref: 116-117 Learning Outcome: Identify the fundamental concepts and issues of international business and management Objective: 5 Difficulty: Moderate Classification: Conceptual 22 Copyright © 2014 Pearson Education. A) short-term orientation B) individualism C) power distance D) masculinity E) collectivism Answer: C Page Ref: 116 Learning Outcome: Identify the fundamental concepts and issues of international business and management AACSB: Dynamics of the Global Economy Objective: 5 Difficulty: Moderate Classification: Conceptual 69) March Hare Entertainment is a media company in London that specializes in bizarre and sometimes shocking campaigns. habits. which has high power distance and collectivism B) Denmark.67) ________ is the set of characteristics of a given group of people and their environment and includes components like norms. The firm is looking to expand into other countries.

C) France is a country with high power distance. . They like to be informed about every situation they are likely to face. They do not question the authority of their managers. Which of the following statements can be deduced from this information? A) France has a culture that promotes masculinity. Answer: C Page Ref: 116-117 Learning Outcome: Identify the fundamental concepts and issues of international business and management Objective: 5 Difficulty: Moderate Classification: Application 71) In Jonovia. A) feminine values B) long-term orientation C) low power distance D) high uncertainty avoidance E) high individualism Answer: D Page Ref: 116-117 Learning Outcome: Identify the fundamental concepts and issues of international business and management Objective: 5 Difficulty: Moderate Classification: Application 23 Copyright © 2014 Pearson Education. It can be deduced that Jonovia is a society that has ________. employees do not like to be in a situation they know nothing about.70) France is a country where employees tend to follow whatever their managers say. E) French society promotes individualism. Inc. B) France is a country where short-term orientation is prevalent. D) France is a society with low uncertainty avoidance.

and accept more autocratic than democratic leadership. assertiveness. E) Countries with low uncertainty avoidance deemphasize short-run success to achieve long-run success.72) Which of the following is true according to Hofstede's method of describing culture? A) Countries with low power distance tend to emphasize. A) Uncertainty avoidance B) Power distance C) Collectivism D) Masculinity E) Feminity Answer: C Page Ref: 116 Learning Outcome: Identify the fundamental concepts and issues of international business and management Objective: 5 Difficulty: Moderate Classification: Conceptual 24 Copyright © 2014 Pearson Education. D) Countries that are high in uncertainty avoidance prefer being in more defined and predictable situations. and wealth. B) Highly feminine countries place a high worth on factors like competitiveness. . C) Power distance is the extent to which a society feels threatened by uncertain or unpredictable situations. Answer: D Page Ref: 116-117 Learning Outcome: Identify the fundamental concepts and issues of international business and management Objective: 5 Difficulty: Moderate Classification: Conceptual 73) ________ is the degree to which people in a society operate primarily as individuals or within groups. expect. success. Inc.

Inc. B) South Korea has high power distance. E) South Korea is a collectivist culture. What can be deduced from this? A) South Korean society has a long-term orientation.74) In South Korean society. The managers also prefer maintaining a dayto-day perspective. A) emphasizes masculine values B) has short-term orientations C) has high power distance D) is low on uncertainty avoidance E) emphasizes collectivism Answer: A Page Ref: 116 Learning Outcome: Identify the fundamental concepts and issues of international business and management Objective: 5 Difficulty: Moderate Classification: Application 76) Organizations headquartered in Pakistan train their employees in order to enable them to tackle the job that has to be performed immediately. Japan is said to have a society that ________. business success is pursued through people who work as a team. A) highly individualistic society B) highly feminine society C) short-term oriented society D) low power distance society E) low uncertainty avoidance society Answer: C Page Ref: 116-117 Learning Outcome: Identify the fundamental concepts and issues of international business and management Objective: 5 Difficulty: Moderate Classification: Application 25 Copyright © 2014 Pearson Education. Answer: E Page Ref: 116 Learning Outcome: Identify the fundamental concepts and issues of international business and management Objective: 5 Difficulty: Moderate Classification: Conceptual 75) Japan has a society that values competitiveness and assertiveness over nurturing others and improving their quality of life. The people believe that success and wealth are very important. . Pakistan is a good example of a ________. D) South Korea has strong masculine values. Managers believe that good interpersonal relationships among the members of a team are a must for success. C) South Korea is low on uncertainty avoidance.

. Which of the following management functions is being performed here? A) planning B) influencing C) controlling D) organizing E) leading Answer: C Page Ref: 117 Learning Outcome: Identify the fundamental concepts and issues of international business and management Objective: 5 Difficulty: Easy Classification: Conceptual 78) ________ in multinational corporations requires that standards be set. A) global corporations B) multinational corporations C) international corporations D) domestic corporations E) pan-national corporations Answer: A Page Ref: 118 Learning Outcome: Identify the fundamental concepts and issues of international business and management Objective: 6 Difficulty: Easy Classification: Conceptual 26 Copyright © 2014 Pearson Education.77) The management of a company decides to take corrective action in the way they have been comparing profits generated by organizational units located in different countries and decides to represent it in terms of different currencies. Inc. and corrective action be taken if necessary. A) Planning B) Organizing C) Leading D) Controlling E) Influencing Answer: D Page Ref: 117 Learning Outcome: Identify the fundamental concepts and issues of international business and management Objective: 5 Difficulty: Easy Classification: Conceptual 79) Transnational organizations are also called ________. performance be measured and compared to standards.

and management being from many different countries. with ownership. A) pan-national B) transnational C) multinational D) international E) domestic Answer: B Page Ref: 118 Learning Outcome: Identify the fundamental concepts and issues of international business and management Objective: 6 Difficulty: Easy Classification: Conceptual 27 Copyright © 2014 Pearson Education. and management being from many different countries.80) A(n) ________ organization considers national borders to be inconsequential to its operations. control. . control. A) international B) regional C) pan-national D) transnational E) domestic Answer: D Page Ref: 118 Learning Outcome: Identify the fundamental concepts and issues of international business and management Objective: 6 Difficulty: Easy Classification: Conceptual 81) The ________ organization transcends any single home country. with ownership. Inc.

saying that it was a custom of the country to give business associates gifts. Since the transfer was a hurried one.82) Evelyn has worked for the Boston branch of Clarity Systems for the past ten years. She is being transferred to head the Madrid office of her company. Evelyn had to conduct negotiations for the renewal of several supplier contracts. Evelyn is unsure whether she should accept the gift as it seems like a bribe. As soon as she arrived in Madrid. . A) logistical information B) cultural application C) cultural adaptation D) cultural profiling E) repatriation Answer: C Page Ref: 120 Learning Outcome: Identify the fundamental concepts and issues of international business and management Objective: 7 Difficulty: Easy Classification: Conceptual 28 Copyright © 2014 Pearson Education. Which of the following ethical guidelines will help Evelyn determine whether or not to accept the gift? A) respecting core human rights B) respecting local traditions C) determining right from wrong by examining context D) using ethnocentrism E) increasing power distance Answer: C Page Ref: 119 Learning Outcome: Identify the fundamental concepts and issues of international business and management Objective: 7 Difficulty: Moderate Classification: Application 83) When a company provides an expatriate with information on how to survive the difficulties of adjusting to a new culture. Inc. One of the suppliers gave her an expensive watch. the company is providing training in ________. there was no time to train Evelyn in the specifics of doing business in Spanish culture.

and how to write a check. such as personal safety.84) When a company provides an expatriate with basic information about life in a foreign country. A) cultural profiling B) cultural adaptation C) cultural application D) logistical information E) repatriation Answer: D Page Ref: 120 Learning Outcome: Identify the fundamental concepts and issues of international business and management Objective: 7 Difficulty: Easy Classification: Conceptual 85) During ________ training. Inc. who to call in an emergency. A) application B) logistical information C) cultural adaptation D) cultural profiling E) repatriation Answer: A Page Ref: 120 Learning Outcome: Identify the fundamental concepts and issues of international business and management AACSB: Dynamics of the Global Economy Objective: 7 Difficulty: Easy Classification: Conceptual 29 Copyright © 2014 Pearson Education. . the company is providing training in ________. the expatriates learn about the specific organizational roles that they are required to perform in the foreign country.

Inc. international organizations. It transcends any single home country. . These organizations normally not only acquire necessary resources within a single country but also sell their goods or services within that same country. with domestic organizations representing the least and transnational organizations the most international involvement. These categories are domestic organizations. The multinational organization. This categorization format actually describes a continuum of international involvement. and management being from many different countries. takes the entire world as its business arena. represents the third level of international involvement. International organizations are organizations that are based primarily within a single country but have continuing. commonly called the multinational corporation (MNC). These organizations are more extensively involved in the international arena than are domestic organizations. but less so than either multinational or transnational organizations. A transnational organization.86) Define the different categories of organizations by extent of international involvement. multinational organizations. also called a global organization. It is a company that has significant operations in more than one country. meaningful international transactions in other countries. Domestic organizations are organizations that essentially operate within a single country. and transnational or global organizations. control. with ownership. Answer: A number of different categories have evolved to describe the extent to which organizations are involved in the international arena. Page Ref: 105-106 Learning Outcome: Identify the fundamental concepts and issues of international business and management Objective: 2 Difficulty: Moderate Classification: Conceptual 30 Copyright © 2014 Pearson Education.

c.It multinationalizes its management from top to bottom. Allow participation in the rapid expansion of a market abroad. Page Ref: 106 Learning Outcome: Identify the fundamental concepts and issues of international business and management Objective: 3 Difficulty: Moderate Classification: Conceptual 31 Copyright © 2014 Pearson Education. political complications involving the parent company (the company investing in the international operations) and various factions within the host country (the country in which the investment is made) could prevent the parent company from realizing the desirable outcomes.87) What are the six stages of multinationalization? What activities does a company perform at each stage? Answer: Usually. Stage 3 . b. Unfortunately.It exports its products to foreign countries. Stage 4 .It multinationalizes ownership of the corporate stock. and marketing skills. For example. a company goes through the following six phases of multinationalization: Stage 1 . managers who make foreign investments expect that such investments will accomplish the following: a. Stage 5 . Stage 2 . design. . d.It establishes sales organizations abroad. Stage 6 .It establishes foreign manufacturing facilities. Earn higher profits. Reduce or eliminate high transportation costs. Inc. Provide foreign technical. many managers decide to internationalize their companies without having an accurate understanding of the risks involved in making such a decision.It licenses use of its patents and know-how to foreign firms that make and sell its products. Page Ref: 106 Learning Outcome: Identify the fundamental concepts and issues of international business and management Objective: 2 Difficulty: Moderate Classification: Conceptual 88) Why do managers make foreign investments? What are the risks involved in this? Answer: Normally.

tax laws.89) Discuss the three types of organizational members found in multinational corporations. Answer: Workers in multinationals can be categorized as expatriates. Expatriates are organization members who live and work in a country where they do not have citizenship. Page Ref: 106 Learning Outcome: Identify the fundamental concepts and issues of international business and management Objective: 4 Difficulty: Moderate Classification: Conceptual 32 Copyright © 2014 Pearson Education. Host-country nationals are organization members who are citizens of the country in which the facility of the foreign-based organization is located. host-country nationals. and third-country nationals. . and basic lifestyle of the culture in the host country. language. Organizations that operate globally may employ all three types of organization members. Both expatriates and third-country nationals require relocation and training in the culture. Inc. Third-country nationals are organization members who are citizens of one country and who work in another country for an organization headquartered in still another country.

c. . cultures that focus more on short-run success emphasize training to enable one to do a job now. Cultures that focus more on long-run success emphasize activities like planning. and wealth. success. rewarding short-run results.It is the extent to which a culture emphasizes traditional masculine or feminine values. expect. Inc. Uncertainty Avoidance . and maintaining a day-to-day perspective. Masculinity and Femininity . People in this situation tend to be self-reliant and succeed by competing with others. Countries that highly promote power distance have citizenry that tends to emphasize. Traditional feminine values place a high worth on factors like caring for and nurturing others and increasing the quality of life.It is the extent to which a society feels threatened by uncertain or unpredictable situations. Traditional masculine values place a high worth on factors like competitiveness. Individualism and Collectivism . d. Conversely.It is the degree to which a culture deemphasizes short-run success to achieve long-run success. b. Short-Term and Long-Term Orientation .90) According to Hofstede. Countries that are high in uncertainty avoidance prefer being in more defined and predictable situations.It is the degree to which a society promotes an unequal distribution of power. On the other hand. assertiveness.It is the degree to which people in a society operate primarily as individuals or within groups. and accept more autocratic than democratic leadership. Page Ref: 116-117 Learning Outcome: Identify the fundamental concepts and issues of international business and management Objective: 5 Difficulty: Moderate Classification: Conceptual 33 Copyright © 2014 Pearson Education. what are the five basic dimensions of culture? Answer: According to Hofstede's research. national cultural values vary on five basic dimensions: a. Power Distance . education. and keeping a future oriented perspective. People operating as individuals tend to focus on meeting their own needs. people who operate collectively tend to build relationships among others and downplay individualism. rewarding long-run results. e.