Chapter 17: Global Human Resource Management

True / False Questions

 

1. The human resource management function can help a firm achieve its primary strategic goals
of reducing the costs of value creation and adding value by better serving customer needs. 
 
True    False
 
2. An expatriate manager is a citizen of one country who is working abroad in one of the firm’s
subsidiaries. 
 
True    False
 
3. For a firm to outperform its rivals in the global marketplace, the performance appraisal
systems it uses must measure the perceptions that it wants to encourage. 
 
True    False
 
4. Organizational architecture refers to an organization's norms and value systems. 
 
True    False
 
5. It is believed that a firm attains higher performance when its employees are predisposed
toward its value systems by their personality type. 
 
True    False
 
6. In international businesses, a geocentric staffing policy is one in which all key management
positions are filled by parent-country nationals. 
 
True    False
 
7. In international businesses, firms pursue a polycentric staffing policy because they see it as
the best way to maintain a unified corporate culture. 
 
True    False
 
8. In international businesses, a disadvantage of an ethnocentric staffing policy is that it
produces resentment in host-country nationals. 
 
True    False
 
9. An international firm that adopts a polycentric staffing policy is more likely to suffer
from cultural myopia. 
 
True    False
 
10. In international businesses, a polycentric staffing policy increases the costs of value
creation. 
 
True    False
 
11. International firms pursuing an ethnocentric staffing policy may be better able to create value
from the pursuit of experience curve and location economies than firms pursuing other
staffing policies. 
 
True    False
 
12. The major drawback with a polycentric staffing policy is the gap that can form between host-
country managers and parent-country managers due to language barriers. 
 
True    False
 
13. A polycentric staffing approach is effective only for international firms pursuing a
transnational strategy and inappropriate for other strategies. 
 
True    False
 
14. The fact that many countries want foreign subsidiaries to employ their citizens limits a firm's
ability to pursue a geocentric policy. 
 
True    False
 
15. For international firms, an ethnocentric staffing approach is compatible with a localization
strategy. 
 
True    False
 
16. International firms that have a broad geographic scope are the most likely to have a
geocentric mind-set. 
 
True    False
 
17. Citizens of a foreign country working in the home country of their multinational employer
are known as repatriates. 
 
True    False
 
18. Expatriate failure represents the failure of a firm's selection policies to identify individuals
who will not thrive abroad. 
 
True    False
 
19. According to a study by R.L. Tung, the most important reason for expatriate failure among
U.S. multinationals is difficulty coping with a new environment. 
 
True    False
 
20. According to Mendenhall and Oddou, human resource managers must equate domestic
performance with overseas performance potential. 
 
True    False
 
21. Expatriate managers who lack others-orientation tend to treat foreign nationals as if they
were home-country nationals. 
 
True    False
 
22. According to Mendenhall and Oddou, expatriates with perceptual ability tend to be
judgmental and evaluative in interpreting the behavior of host-country nationals. 
 
True    False
 
23. Historically, most international businesses have been more concerned with management
development than with training. 
 
True    False
 
24. It is important that the spouse of an expatriate manager, and perhaps the whole family, be
included in cultural training programs. 
 
True    False
 
25. Transnational firm managers need not be able to detect pressures for local responsiveness
because it is not part of their skill set. 
 
True    False
 
26. Bringing managers together in one location for extended periods and rotating them through
different jobs in several countries help the firm build an informal management network. 
 
True    False
 
27. Unintentional bias makes it easy to evaluate the performance of expatriate managers
objectively. 
 
True    False
 
28. Home-office managers are unbiased while evaluating the performance of expatriate
managers. 
 
True    False
 
29. From a strategic perspective, a compensation system must reward managers for taking
actions that are consistent with the strategy of the enterprise. 
 
True    False
 
30. In terms of expatriate pay, the income statement approach equalizes purchasing power across
countries so employees can enjoy the same living standard in their foreign posting that they
enjoyed at home. 
 
True    False
 
31. An expatriate's base salary is normally lower than the base salary for a similar position in the
home country. 
 
True    False
 
32. Unless a host country has a reciprocal tax treaty with the expatriate's home country, an
expatriate must pay income tax to both the home- and host-country governments. 
 
True    False
 
33. A concern of organized labor is that an international business keeps highly skilled tasks in its
home country and farm out low-skilled tasks to foreign plants. 
 
True    False
 
34. An impediment to cooperation between national unions is the wide variation in union
structure. 
 
True    False
 
35. Historically, most international businesses have centralized international labor relations
activities. 
 
True    False
 
 

Multiple Choice Questions

 
36. A(n) expatriate manager refers to:  
 

A. a citizen of one country who is working abroad in one of the firm's subsidiaries.

B. a parent-country national who works in the parent country.

C. a host-country national who works in the host country.

D. any person who lives in a foreign country.

E. a person willing to work in different departments of a foreign

firm.
 
37. Megan, a U.S. citizen, is the operations manager at the Middle East office of HS
Constructions Inc., an American firm. In this situation, she is an example of a(n) _____
manager.  
 

A. immigrant

B. host-country

C. inpatriate

D. expatriate

E. virtual
 
38. Firms that pursue a localization strategy try to create value by:  
 

A. emphasizing local responsiveness.

B. encouraging a global staffing approach.

C. emphasizing transnational strategies.

D. building an informal management network.

E. transferring products and competencies overseas.

 
39. International firms try to create value by:  
 

A. transferring products and competencies overseas.

B. following a local staffing policy.

C. focusing on local responsiveness.

D. emphasizing a localization strategy.

E. adopting an ethnocentric staffing approach.

 
40. Firms that emphasize global standardization try to create value by:  
 

A. retaining products and competencies within the parent country.

B. realizing experience curve and location economies.

C. focusing on local responsiveness.

D. emphasizing localization.

E. adopting an ethnocentric staffing approach.

 
41. _____ refers to a strategy that is concerned with the selection of employees for particular
jobs.  
 

A. Compensation policy

B. Staffing policy

C. Performance appraisal policy

D. Training policy

E. Management development policy

 
42. The norms and value systems of an organization constitute its _____.  
 

A. corporate social responsibility

B. cultural toughness

C. cultural sensitivity

D. corporate culture

E. perceptual ability
 
43. A(n) _____ staffing policy is one in which all key management positions are filled by parent-
country nationals.  
 

A. ethnocentric

B. global

C. polycentric

D. geocentric

E. transnational
 
44. In the Swiss firm Terabithia Systems AG, all the important positions in its international
operations are held by Swiss nationals. Terabithia follows a(n) _____ staffing policy.  
 

A. eurocentric

B. ethnocentric

C. polycentric

D. geocentric

E. transnational
 
45. Which of the following is a characteristic feature of an ethnocentric staffing policy?  
 

A. It requires host-country nationals to be recruited to manage subsidiaries.

B. It is used when a firm places a low value on its corporate culture.

C. It increases advancement opportunities for host-country nationals.

D. It seeks the best people for key jobs throughout the organization, regardless of nationality.

E. It places parent-country nationals in key management positions.

 
46. Which of the following is an advantage of an ethnocentric staffing policy?  
 

A. It alleviates cultural myopia.

B. It is inexpensive to implement.

C. It helps build strong informal management networks.

D. It helps transfer core competencies to a foreign operation.

E. It uses human resources efficiently.

 
47. A firm pursues an ethnocentric staffing policy because it:  
 

A. believes in providing growth opportunities to host-country nationals.

B. wants to avoid cultural myopia.

C. believes the host country lacks qualified individuals for senior management positions.

D. wants to keep all core competencies within the home country.

E. wants to build strong cultural and informal management networks in all its subsidiaries.
 
48. Firms that use an ethnocentric staffing policy consider it to be:  
 

A. a way to reduce the costs of value creation.

B. inappropriate for a localization strategy.

C. the best way to maintain a unified corporate culture.

D. the most inexpensive staffing approach.

E. the only approach to reduce cultural myopia.

 
49. If a firm tries to create value by transferring core competencies to a foreign operation and,
therefore, transfers parent-country nationals who have knowledge of that competency to the
foreign operation, it pursues a(n) _____ staffing policy.  
 

A. ethnocentric

B. polycentric

C. geocentric

D. eurocentric

E. transnational
 
50. Which of the following is a disadvantage of an ethnocentric staffing policy?  
 

A. It leads to resentment in the host country.

B. It isolates the headquarters from foreign subsidiaries.

C. It does not allow transfer of core competencies.

D. It leads to a dearth of qualified managers in the host nation.

E. It diversifies corporate culture.

 
51. A(n) _____ staffing policy limits advancement opportunities for host-country nationals.  
 

A. transnational

B. polycentric

C. geocentric

D. ethical

E. ethnocentric
 
52. A firm's failure to understand host-country cultural differences that require different
approaches to marketing and management is referred to as _____. 
 

A. cultural parity

B. cultural myopia

C. power distance

D. cultural toughness

E. cultural polarization
 
53. A(n) _____ staffing policy requires host-country nationals to be recruited to manage
subsidiaries, while parent-country nationals occupy key positions at corporate headquarters.  
 

A. geocentric

B. polycentric

C. ethnocentric

D. global

E. transnational
 
54. A firm that adopts a polycentric staffing policy is less likely to:  
 

A. isolate foreign subsidiaries from corporate headquarters.

B. implement an expensive staffing policy.

C. be controlled by corporate headquarters.

D. suffer from cultural myopia.

E. provide growth opportunities.

 
55. Which of the following is true of a polycentric staffing policy?  
 

A. It is expensive to implement.

B. It leads to cultural myopia.

C. It prevents mistakes arising from cultural misunderstandings.

D. It bridges the gap between the headquarters and its foreign subsidiaries.

E. It gives unlimited advancement opportunities for host-country nationals.

 
56. Which of the following is an advantage of adopting a polycentric staffing approach?  
 

A. It is less expensive to implement as compared to other staffing approaches.

B. It gives host-country nationals unlimited opportunities to gain experience outside their
own country.

C. It increases career mobility.

D. It increases interaction between the headquarters of a firm and its foreign subsidiaries.

E. It bridges the gap between host-country managers and parent-country managers.
 
57. Which of the following is a drawback of adopting a polycentric staffing approach? 
 

A. It is expensive to implement.

B. It leads host-country managers to make mistakes due to cultural misunderstandings.

C. It limits advancement opportunities for host-country nationals.

D. It invariably makes a firm suffer from cultural myopia.

E. It bridges the gap between the headquarters of a firm and its foreign subsidiaries.
 
58. The major drawback with a(n) _____ staffing policy is the gap that can form between host-
country managers and parent-country managers.  
 

A. global

B. geocentric

C. polycentric

D. ethnocentric

E. transnational
 
59. A polycentric staffing approach is effective for firms pursuing a(n) _____ strategy. 
 

A. international

B. localization

C. global

D. transnational

E. regional
 
60. A(n) _____ approach to staffing has the following disadvantages: it limits career mobility
and it isolates headquarters from foreign subsidiaries.  
 

A. polycentric

B. transnational

C. geocentric

D. ethnocentric

E. global
 
61. A(n) _____ staffing policy seeks the best people for key jobs throughout the organization,
regardless of nationality.  
 

A. global

B. ethnocentric

C. geocentric

D. polycentric

E. transnational
 
62. How is a geocentric staffing policy beneficial to a firm?  
 

A. It requires the firm to provide little or no documentation to hire a foreign national.

B. It is inexpensive to implement.

C. It helps the firm follow a localization strategy.

D. It allows all key management positions to be filled by parent-country nationals.

E. It enables the firm to make the best use of its human resources.
 
63. What is the advantage of a geocentric staffing policy?  
 

A. It requires firms to provide little or no documentation to hire a foreign national.

B. It enables firms to build a cadre of international executives who feel at home working in a
number of cultures.

C. It is inexpensive to implement the policy in a firm.

D. It allows all key management positions of the firms and their subsidiaries to be filled by
parent-country nationals.

E. It helps firms to follow a localization strategy.

 
64. Firms pursuing a(n) _____ staffing policy may be better able to create value from the pursuit
of experience curve and location economies than firms pursuing other staffing policies.  
 

A. domestic

B. eurocentric

C. ethnocentric

D. geocentric

E. local
 
65. Which of the following is an advantage of adopting a geocentric staffing approach?  
 

A. It tends to reduce cultural myopia and enhance local responsiveness.

B. It is inexpensive to implement.

C. It reduces the costs of value creation.

D. It allows all key management positions of a firm and its subsidiaries to be filled by parent-
country nationals.

E. It requires minimal documentation for hiring foreign nationals.

 
66. Most countries require extensive documentation if they wish to hire a foreign national
instead of a local national. This is a disadvantage of the _____ staffing approach.  
 

A. polycentric

B. geocentric

C. transnational

D. ethnocentric

E. local
 
67. Which of the following is an advantage of a geocentric approach to staffing for international
businesses? 
 

A. It requires minimal documentation.

B. It is inexpensive to implement.

C. It helps build a strong culture and informal management networks.

D. It helps transfer core competencies to foreign operations.

E. It requires less management personnel to implement this staffing policy.

 
68. Which of the following is a disadvantage of adopting a geocentric staffing approach?  
 

A. Cultural myopia negatively influences effective management control.

B. Training and relocation costs increase when transferring managers from country to
country.

C. Host-country nationals cannot progress beyond senior positions in their own subsidiary.

D. A gap forms between host-country managers and parent-country managers.

E. The lack of management transfers leads to a lack of integration between corporate

headquarters and foreign subsidiaries.
 
69. Broadly speaking, a(n) _____ staffing approach is compatible with an international strategy. 
 

A. ethnocentric

B. geocentric

C. polycentric

D. transnational

E. ethical
 
70. Which of the following strategies is compatible with a geocentric staffing policy?  
 

A. Global standardization strategy 

B. Localization strategy 

C. International strategy 

D. Ethical strategy

E. Global strategy
 
71. Firms that have a broad geographic scope are most likely to have a(n) _____ mind-set.  
 

A. ethnocentric

B. polycentric

C. transnational

D. geocentric

E. localized
 
72. Which of the following staffing policies relies extensively on the use of expatriate
managers? 
 

A. Global staffing policy

B. Polycentric staffing policy

C. Transnational staffing policy

D. Ethnocentric staffing policy

E. Localized staffing policy

 
73. _____ refers to a subset of expatriates who are citizens of a foreign country working in the
home country of their multinational employer. 
 

A. Virtual expatriates

B. Inpatriates

C. Third-country nationals

D. Host-country nationals

E. Parent-country nationals
 
74. _____ refers to the premature return of an expatriate manager to his or her home country.  
 

A. Expatriate relief

B. Expatriate failure

C. Expatriate rotation

D. Expatriate timing

E. Repatriation
 
75. Yuriko, a citizen of Japan, was working as a manager in the Japanese branch of an American
firm. Due to her efficiency, she was assigned a temporary posting at the headquarters of the
firm in America. In this situation, she is known as a(n) _____.  
 

A. repatriate

B. inpatriate

C. third-country national

D. beneficiary

E. parent-country national
 
76. With a(n) _____ staffing policy, the expatriates are all home-country nationals who are
transferred abroad. 
 

A. geocentric

B. ethnocentric

C. polycentric

D. international

E. domestic
 
77. According to R. L. Tung's study, which of the following is the most important reason for
expatriate failures for U.S. multinationals?  
 

A. Inability of the spouse to adjust

B. Difficulties with the new environment

C. Insufficient pay

D. Personal or emotional problems

E. Lack of technical competence

 
78. According to the results of a seminal study by R. L. Tung, what was the major reason for
expatriate failure among European expatriates? 
 

A. Personal or emotional problems

B. Inability to cope with overseas responsibilities

C. Poor pay

D. Inability of spouse to adjust to a new environment

E. Lack of technical competence

 
79. According to the results of a seminal study by R. L. Tung, the top reason that Japanese
expatriate managers fail is:  
 

A. the inability of their spouses to adjust.

B. their lack of technical competence.

C. personal or emotional problems.

D. the inability to cope with larger overseas responsibilities.

E. their inability to deal with difficulties in the new environment.

 
80. According to Mendenhall and Oddou, what is the major problem in the selection of
appropriate candidates for overseas assignments in many firms?  
 

A. Lack of technical abilities

B. Equating domestic performance with overseas performance potential

C. Lack of communication between line managers and HR managers

D. A geocentric staffing policy

E. A polycentric staffing policy

 
81. According to Mendenhall and Oddou, which of the following dimensions that predicts
success in a foreign posting strengthens an expatriate's self-esteem, self-confidence, and
mental well-being? 
 

A. Cultural toughness

B. Others-orientation

C. Perceptual ability

D. Self-orientation

E. Empathy
 
82. Mendenhall and Oddou identified that expatriates with _____, a dimension that predicts
success, were able to adapt their interests in food, sport, and music.  
 

A. perceptual ability

B. self-orientation

C. others-orientation

D. cultural toughness

E. empathy
 
83. According to Mendenhall and Oddou, which of the following is a dimension that seems to
predict success in a foreign posting?  
 

A. Others-orientation

B. Learning effects

C. Dynamic capabilities

D. Eclectic paradigm

E. Factor endowments
 
84. According to Mendenhall and Oddou's dimensions that predict success in a foreign posting,
relationship development refers to:  
 

A. an expatriate's willingness to use the host-country language.

B. the ability to understand why people of other countries behave the way they do.

C. the ability to empathize with foreign nationals.

D. the relationship between the country of assignment and how well an expatriate adjusts to a
particular posting.

E. the ability to develop long-lasting friendships with host-country nationals.

 
85. In a review of the research on expatriate selection, _____ state(s) that a major problem in
many firms is that human resource managers tend to equate domestic performance with
overseas performance potential.  
 

A. R.L. Tung

B. Medenhall and Oddou

C. Towers Perrin

D. Prahalad and Doz

E. Christopher Bartlett and Sumantra Ghoshal

 
86. According to Mendenhall and Oddou's dimensions that predict success in a foreign posting,
which of the following is a result of the attribute of others-orientation?  
 

A. The expatriate has high self-esteem.

B. The expatriate empathizes with the host-country nationals.

C. The expatriate speaks to the host-country nationals in the local language.

D. The expatriate adjusts to the inhospitable climate of the host country.

E. The expatriate is comfortable working in a male-dominated environment.

 
87. According to Mendenhall and Oddou, relationship development and willingness to
communicate are two important factors of the dimension of _____.  
 

A. self-orientation

B. perceptual ability

C. cultural toughness

D. others-orientation

E. personal interest
 
88. According to Mendenhall and Oddou, the attribute of _____ provides an expatriate the ability
to understand why people of other countries behave the way they do.  
 

A. cultural toughness

B. perceptual ability

C. self-orientation

D. others-orientation

E. willingness to communicate
 
89. According to Mendenhall and Oddou, perceptual ability refers to: 
 

A. an expatriate's willingness to use the host-country language.

B. an expatriate's ability to strengthen his or her self-esteem.

C. an expatriate's ability to empathize.

D. the relationship between the country of assignment and how well an expatriate adjusts to a
particular posting.

E. the ability to develop long-lasting friendships with host-country nationals.

 
90. According to Mendenhall and Oddou, expatriate managers who lack the dimension of _____
tend to treat foreign nationals as if they were home-country nationals.  
 

A. cultural toughness

B. self-orientation

C. others-orientation

D. perceptual ability

E. willingness to communicate
 
91. According to Mendenhall and Oddou, the dimension of _____ refers to the relationship
between the country of assignment and how well an expatriate adjusts to a particular posting.

A. self-orientation

B. perceptual ability

C. cultural toughness

D. others-orientation

E. willingness to communicate
 
92. Amanda, an American manager, is successfully adjusting in a country where the culture is
extremely male-dominated. According to Mendenhall and Oddou, which of the following
dimensions that predict success in foreign postings is involved in this situation? 
 

A. Perceptual ability

B. Others-orientation

C. Cultural toughness

D. Self-orientation

E. Empathy
 
93. Poor health care and housing standards and inhospitable climate make it difficult for
expatriates to adjust to a particular posting. According to Mendenhall and Oddou's four
dimensions that predict success in a foreign posting, which of the following is required in
this situation? 
 

A. Perceptual ability

B. Cultural toughness

C. Self-orientation

D. Others-orientation

E. Self-confidence
 
94. Which of the following is an additional and difficult dimension to the long-standing problem
of expatriate failure due to the inability of the spouse to adjust? 
 

A. Formal training

B. Dual-career families

C. Cultural diversity

D. Single parenting

E. Cultural toughness
 
95. Which of the following is intended to build a manager's skills over his or her career with the
firm?  
 

A. Ethnocentrism

B. Cultural toughness

C. Total Quality Management

D. Management development

E. Learning effects
 
96. For expatriate managers, an exclusive reliance on English:  
 

A. increases their effectiveness in dealing with host-country nationals.

B. eases culture shock.

C. diminishes their ability to interact with host-country nationals.

D. helps them adjust to the day-to-day life in the host country.

E. helps them build rapport with local employees.

 
97. In terms of training and management development, _____ is aimed at helping the expatriate
manager and family ease themselves into day-to-day life in the host country.  
 

A. cognitive training

B. practical training

C. house training

D. cultural training

E. perceptual ability training

 
98. Repatriation refers to:  
 

A. sending expatriate managers to a new host country.

B. training expatriate managers to adjust to the new environment of the host country.

C. reentry of expatriate managers into their home-country organization.

D. helping expatriate managers build rapport with local employees.

E. the process of increasing expatriate managers' effectiveness in dealing with host-country

nationals.
 
99. International businesses pursuing a(n) _____ strategy are increasingly using management
development as a strategic tool as they need a strong unifying corporate culture and informal
management networks to assist in coordination and control.  
 

A. localization

B. international

C. transnational

D. global standardization

E. ethnocentric
 
100 During performance appraisals, two groups evaluate the performance of expatriate managers
. —host-nation managers and home-office managers. This is aimed at avoiding the problem of
_____.  
 

A. cultural conflict

B. unintentional bias

C. operational errors

D. central tendency

E. culture shock
 
101 Home-country managers' performance appraisals may be biased by:  
.  

A. distance and by their own lack of experience of working abroad.

B. poor networking skills.

C. lack of technological know-how.

D. learning effects.

E. taking hard variables as well as soft variables into consideration.

 
102 Which of the following steps is true of bias in performance evaluations?  
.  

A. More weight should be given to an off-site manager's appraisal than an on-site manager's
appraisal.

B. Cultural bias increases when the on-site manager is of the same nationality as the
expatriate.

C. Home-office managers should write performance evaluations without consulting on-site

managers to avoid bias.

D. Due to proximity, an on-site manager is more likely to evaluate the soft variables that are
important aspects of an expatriate’s performance.

E. A performance appraisal is invalid when the on-site manager is of the same nationality as
the expatriate manager.
 
103 According to the survey undertaken by Towers Perrin, which of the following countries
. provides the highest pay to HR executives?  
 

A. Switzerland

B. The United States

C. Japan

D. Australia

E. Argentina
 
104 In firms following a(n) _____ staffing policy, the issue of compensation can be reduced to
. that of how much home-country expatriates should be paid. 
 

A. polycentric

B. ethnocentric

C. geocentric

D. international

E. global
 
105 In firms following a(n) _____ staffing policy, the lack of managers' mobility among national
. operations implies that the pay for expatriates should be kept country specific.  
 

A. regiocentric

B. ethnocentric

C. geocentric

D. polycentric

E. international
 
106 One aspect of a(n) _____ staffing policy is the need for a cadre of international managers
. that may include many different nationalities.  
 

A. polycentric

B. geocentric

C. ethnocentric

D. regiocentric

E. localized
 
107 In a firm with a(n) _____ staffing policy, considerable resentment is caused among foreign
. nationals who are members of the international cadre and work with U.S. nationals, if pay is
not equalized.  
 

A. polycentric

B. geocentric

C. ethnocentric

D. regiocentric

E. localized
 
108 Which of the following is the most common approach to expatriate pay which equalizes
. purchasing power across countries so employees can enjoy the same living standard in their
foreign posting that they enjoyed at home?  
 

A. Merit approach

B. Correspondence approach

C. Balance sheet approach

D. Parity approach

E. Perceptual approach
 
109 In the context of expatriate compensation, what is the role of a balance sheet approach?  
.  

A. It equalizes purchasing power across countries so employees can enjoy the same living
standard in their foreign posting that they enjoyed at home.

B. It helps expatriate managers and their families to adjust to the day-to-day life of the host
country.

C. It rewards expatriates on the basis of merit and performance.

D. It helps expatriates to come to terms with the standard of living of the host country.

E. It is offered as an inducement to accept foreign postings and live away from family.
 
110 In the context of approaches to expatriate pay, which of the following is true of a balance
. sheet approach?  
 

A. It helps expatriate managers and their families to adjust to the day-to-day life of the host
country.

B. It rewards expatriates on the basis of merit and performance.

C. It is offered as an inducement to accept foreign postings and stay away from family in
unfamiliar country.

D. It provides financial incentives to offset qualitative differences between assignment

locations.

E. It reduces the amount of tax that the expatriates have to pay while on the foreign
assignment.
 
111 A firm's ability to reduce its use of expatriates may be limited, particularly if it is pursuing
. a(n) _____ staffing policy.  
 

A. geocentric

B. polycentric

C. transnational

D. regiocentric

E. neocentric
 
112 A(n) _____ refers to extra pay the expatriate receives for working outside his or her country
. of origin.  
 

A. parity adjustment

B. special bonus

C. foreign service premium

D. expat allowance

E. benefit
 
113 Which of the following is true of a foreign service premium? 
.  

A. It helps to evaluate expatriates' performance without any unintentional bias.

B. It is offered to expatriates as an inducement to accept foreign postings.

C. It allows a firm to pay expatriates' income tax in the host country.

D. It ensures that expatriates' children receive adequate schooling.

E. It ensures that expatriates are prepared for reentry into their home-country organization.
 
114 In terms of expatriate pay, which of the following is a characteristic of a foreign service
. premium?  
 

A. It allows a firm to pay expatriates' income tax in the host country.

B. It ensures that expatriates' children receive adequate schooling.

C. It helps to evaluate expatriates' performance without any unintentional bias.

D. It ensures that expatriates are prepared for reentry into their home-country organization.

E. It compensates expatriates for having to live in an unfamiliar country.

 
115 In terms of expatriate pay, which of the following is true of a foreign service premium? 
.  

A. It ensures that expatriates' children receive adequate schooling.

B. It helps to evaluate expatriates' performance without any unintentional bias.

C. It ensures that expatriates are prepared for reentry into their home-country organization.

D. It is paid as a percentage of base salary, with 16 percent being the average premium.

E. It allows a firm to pay expatriates' income tax in the host country.
 
116 With regard to the types of allowances often included in an expatriate's compensation
. package, a(n) _____ allowance is paid when the expatriate is being sent to a difficult
location.  
 

A. education

B. housing

C. hardship

D. cost-of-living

E. reciprocal
 
117 Which of the following allowances ensures that an expatriate will enjoy the same standard of
. living in the foreign posting as at home? 
 

A. Hardship allowance

B. Base salary allowance

C. Cost-of-living allowance

D. Quality-of-life allowance

E. Housing allowance
 
118 In the absence of a reciprocal tax treaty, the expatriate: 
.  

A. may have to pay income tax to both the home- and host-country governments.

B. may not have to pay any tax.

C. may not have to pay income tax only to the host-country government.

D. may not have to pay income tax the home-country government.

E. may have to pay 50 percent less tax to the host-country government.

 
119 In terms of expatriate pay, what does a firm typically do when a reciprocal tax treaty is not
. in force?  
 

A. The firm requires the expatriate to pay one-third of the income tax to the host-country
government.

B. The firm requires the expatriate to pay 50 percent of the income tax to the host-country
government.

C. The firm pays the expatriate's income tax to the host-country government.

D. The firm requires the expatriate to pay the income tax both to the host-country and the
home-country government.

E. The firm pays the expatriate's income tax to the home-country government.

 
120 The _____ function of an international business is typically responsible for international
. labor relations.  
 

A. public relations

B. human resource management

C. finance and accounting

D. legal

E. logistics
 
121 From a strategic perspective, the key issue in international labor relations is:  
.  

A. dealing with multiple business units.

B. the degree to which organized labor can limit the choices of an international business.

C. whether to hire parent-country nationals, host-country nationals, or third-country

nationals.

D. helping expatriates cope with new role demands.

E. the extent to which a reciprocal tax treaty can be brought into effect.
 
122 In the context of international labor relations, which of the following is true of organized
. labor? 
 

A. It supports the pursuit of a transnational standardization strategy.

B. It supports the pursuit of a global standardization strategy.

C. It increases unintentional bias in evaluating the performance of expatriate managers.

D. It limits a firm's ability to integrate and consolidate its global operations.

E. It reduces a firm's ability to understand host-country cultural differences that require
different approaches to marketing.
 
123 A principal concern of domestic unions about multinational firms is that the company can
. counter its bargaining power with:  
 

A. work schedules tied to global rather than domestic standards.

B. wage rates tied to global rather than domestic standards.

C. the power to import labor from abroad.

D. the power to move production to another country.

E. the retention of low-skilled tasks in home country.

 
124 In the context of international labor relations, which of the following is a concern of
. organized labor?  
 

A. An international business increases the bargaining power of organized labor.

B. An international business keeps highly skilled tasks in its home country and farms out
only low-skilled tasks to foreign plants.

C. An international business faces difficulty in switching production from one location to
another.

D. An international business does not import employment practices and contractual
agreements from its home country.

E. An international business signs a reciprocal tax treaty with the host country.
 
125 In the context of international labor relations, a labor union concern arises when an
. international business:  
 

A. keeps low-skilled tasks in its home country.

B. signs a reciprocal tax treaty with the host country.

C. increases the bargaining power of organized labor.

D. faces difficulty in switching production from one location to another.

E. attempts to import employment practices and contractual agreements from its home
country.
 
126 In the context of international labor relations, one of the reasons for a decline in union
. influence is the:  
 

A. introduction of a reciprocal tax treaty.

B. retention of low-skilled tasks in an international firm's home country.

C. importing of employment practices and contractual agreements that are alien to the host
country.

D. increased bargaining power of organized labor.

E. their increased ability to threaten to disrupt production, either by a strike or some other
form of work protest.
 
127 Organized labor responds to the increased bargaining power of multinational corporations
. by:  
 

A. trying to impose regulations on multinationals through organizations such as GATT.

B. trying to achieve international regulations on multinationals through the United Nations.

C. trying to establish regional boards.

D. lobbying for multinational corporations to restrict their global reach to three or fewer

foreign countries.

E. trying to develop a local trade forum.

 
128 In the 1960s, organized labor began to establish _____ to provide worldwide links for
. national unions in particular industries.  
 

A. HR watchdog groups

B. international trade secretariats

C. unorganized labor organizations

D. international orientation resources

E. reciprocal tax treaties

 
129 The long-term goal for organized labor to establish international trade secretariats was to:  
.  

A. import employment practices and contractual agreements from the home country of the
multinational firm.

B. retain low-skilled tasks in the host country.

C. prevent multinational firms from switching production from one location to another as
economic conditions warrant.

D. introduce a reciprocal tax treaty.

E. be able to bargain transnationally with multinational firms.

 
130 In the 1960s, organized labor believed that by coordinating union action across countries
. through an international trade secretariat, it could counter the power of a multinational
corporation by: 
 

A. threatening to disrupt production on an international scale.

B. introducing a reciprocal tax treaty.

C. trying to farm out highly skilled tasks back to the home country of the firm.

D. increasing its bargaining power.

E. lobbying for importing employment practices from the home country of the firm.
 
131 International trade secretariats have been less successful because of the:  
.  

A. similarity in the structure of unions on a global level.

B. common perception unions have about multinational companies.

C. reciprocal tax treaty.

D. competition between national unions to attract investment from international businesses.

E. retention of highly skilled tasks in the host country.

 
132 Which of the following is an impediment to cooperation between national unions?  
.  

A. The retention of highly skilled tasks in the host country

B. The reciprocal tax treaty

C. The wide variation in the structure and ideology of unions

D. The common perception unions have about multinational companies

E. The decreasing bargaining power of multinational companies

 
133 Which of the following is true of organizations like the International Labor Organization and
. the Organization for Economic Cooperation and Development in terms of their role in
international labor relations?  
 

A. They have been highly successful in uniting unions of different countries.

B. They have significantly reduced competition between national unions.

C. They have adopted codes of conduct for multinational firms to follow in labor relations.

D. They are responsible for the import of employment practices from the home country of
the firm.

E. They have increased the bargaining power of multinational firms.

 
134 International businesses differ in terms of their approaches to international labor relations,
. mainly in the degree to which:  
 

A. labor relations activities are centralized or decentralized.

B. labor relations are formal or informal.

C. labor relations are given a high priority or a low priority.

D. labor relations are internally or externally managed.

E. firms follow a polycentric or geocentric staffing policy.

 
135 International businesses differ markedly in their approaches to international labor relations.
. The trend now is toward _____ that reflect(s) international firms’ attempts to rationalize
their global operations.  
 

A. decentralized labor activities

B. greater centralized control

C. autonomy

D. lateral relationships

E. national legislation