INTERNATIONAL BUSINESS MANAGEMENT-MCQs

1. Accounting Standards are the key mandatory and regulatory mechanisms for training on financial reports and
succeeding audit of the same. (True/False)
Ans. True

2. ___ and ___ are the two indices created based on the differences between IAS and DAS.
Ans. Absence, divergence

3. GAAP stands for generally accepted accounting principle. (True/False)

Ans. True

4. Information in ___ is planned for decision makers and who are not involved in the daily management of the
organisation.
Ans. Financial accounting

5. Cost accounting information is planned for ___.

Ans. Managers

6. Customer is the most important participant in a business who should be given importance by the
administration. (True/False)
Ans. True

7. The European Commission sets directives which are orders to member countries to bring their laws in-line
with EU needs within some transition period. (True/False)
Ans. True

8. ___considers the matters from the perspective of economically developed countries.

Ans. OECD

9. The International Federation of Accountants was founded in the year ___.

Ans. 1977

10. Accrual basis is one of the underlying assumptions of ___.

Ans. IFRS

11. Equity is the outstanding concentration on the assets of the enterprise after subtracting all the liabilities
under the historical cost accounting model. (True/ False)
Ans. True

12. Which among the following is not an element of financial statements?

a) Asset.
b) Liability.
c) Equity.
d) Accountability.
Ans. Accountability

13. For a firm to be successful internationally, it is not necessary to be successful locally. (true/false)
Ans. False

14. Culture of a country influences the marketing strategy of the firm. (true/false)
Ans. True

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15. ___ involves a firm, shipping goods directly to a foreign market.
Ans. Exporting

16. Direct investment involves ___ in the overseas market.

Ans. Manufacturing

17. A joint venture is an understanding between

a. Two or more firms.
b. Two or more countries.
c. The firm and its subsidiary.
d. two or more parties.
Ans. a) two or more firms

18. Firms that serve global markets cannot be segregated into several clusters based on their similarities.
(True/False)
Ans. False

19. Advertising is a paid form of ___ communication about an organisation or its products.
Ans. Non-personal

20. Promotional mix is a blend of advertising, personal selling, sales promotion and ___.
Ans. Public relations

21. Globalised advertising is associated with the use of the same ___ name across the world.
Ans. Brand

22. Transfer pricing is considered to be a relatively simple method of moving goods and services among the
overall corporate family. (true/false)
Ans. True

23. ___ is the process of ascertaining the value for the product or service.
Ans. Pricing

24. Brand value builds customer confidence and loyalty. (true/false)

Ans. True

25. International branding is all about differentiating between being global and being local. (true/false)
Ans. False

26. The task of building a brand is:

A) Complicated.
B) Easy.
C) Critical.
D) Moderate.
Ans. A) Complicated

27. The nature of ___ plays a vital role in the international business world.
Ans. Strategic management.

28. The strategic objectives should be measurable, appropriate, realistic, specific, and timely. (True/False)
Ans. True.

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29. ___ is a way of attaining a functional service for the company.
Ans. Outsourcing.

30. A ___ is a simple tool that helps the planning team identify methods to close the performance gaps that has
been identified.
Ans. GAP analysis.

31. Top-down planning encourages team work. (True/False)

Ans. False.

32. ___ are responsible for the successful completion of the project.
Ans. Project managers.

33. The ___ process is a way businesses build strategies that help firms respond quickly to new challenges.
Ans. Strategic management.

34. The kind of strategy concerned with broad decisions about the total organisation's scope and direction is
___.
a) Business level strategy
b) Corporate level strategy
c) Functional strategy
d) Competitive strategy
Ans. b) Corporate level strategy.

35. One of the phases of strategic management process which includes decision making with respect to strategy
and organisational structure; develop budgets and motivational systems is ___.
Ans. Strategy implementation.

36. The three factors governing ethical values are ___, ___, and ___.
Ans. Law, religion, and culture

37. ___ is the collective experience that people have passed on through the hunting and gathering phase,
agriculture phase, and the industrial phase.
Ans. Civilisation

38. A company can maximise its profits by being ethical. (True/False)

Ans. True

39. ___ is an example of whistle-blowing in corporations.

Ans. Xerox

40. In an international business, ___ and ___ are the prominent ethical issues
Ans. Bribery and corruption and worker compensation

41. ___ is an important element that differentiates free market and command market.
Ans. Competition

42. Ethical business practice in one country might differ from another country in practice. (True/False)
Ans. True

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43. ___ and ___ are the two models of negotiating.
Ans. Linear and encompassing model

44. ___ is defined as the practice of a uniform system of ethical codes in different countries that are culturally
and socially different.
Ans. Ethical convergence

45. Utilitarian, moral rights, universalism, and cost-benefit are approaches to ___.
Ans. Ethical decision making

46. Social responsibility is an integral part of business ethics. (True/False)

Ans. True

47. Respecting human rights is not a basic ethical requirement for an MNC. (True/False)
Ans. False

48. Corporate ___ rests solely with Board of Directors.

Ans. Governance

49. A well designed ___ facilitates efficient communication in an organisation.

Ans. Organisational structure.

50. Technology and the environment are factors that influence organisational structure. (True/false)
Ans. True.

51. ___ is the most complex form of organisational structure.

a) Product division structure
b) Functional structure
c) International matrix structure
d) Foreign subsidiary structure
Ans. c) International matrix structure.

52. Planning, recruiting, and termination are some of the functions of the ___ management.
Ans. Human resource.

53. The expat’s underperformance and failure is not a matter of concern for the multinational companies.
(True/False)
Ans. False. The expat’s underperformance and failure has been a matter of concern for the multinational
companies.

54. HRM activities need to be designed to utilise the employee’s potential to the maximum. (True/False)
Ans. True.

55. Which one of the following is not an important activity involved in HRM?
a. Human resource planning.
b. Recruitment and selection.
c. Remuneration.
d. Project planning.
Ans. d) Project planning.

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56. The workforce of a multinational are of three types – parent country nationals, host country nationals,
and___.
Ans. Third country.

57. Ethnocentric and polycentric approaches are examples of ___ policies.

Ans. Staffing.

58. Remuneration is one of the key staffing policies in an international business. (True/False)
Ans. False. Remuneration is not one of the key staffing policies in an international business.

59. The nationality of the employees is not taken in to account while hiring for the company in geocentric
approach. (True/False)
Ans. True.

60. Which of the following is not an approach under staffing policy?

a) Geocentric approach.
b) Biometric approach.
c) Polycentric approach.
d) Ethnocentric approach.
Ans. b) Biometric approach.

61. The letter of credit is a letter that is benefial for both buyer and seller. (True/False)
Ans. True

62. The ___ transaction involves the shipping and delivery of goods in advance.
a) Open account.
b) Draft.
c) Cash-in-advance.
d) Letter of credit.
Ans. a. Open account

63. The legal document, given by the shipping company for the merchandises shipped from one place to another
is called as ___.
Ans. Bill of lading

64. The ___ document is required when you are exporting the goods to other countries.
Ans. Consular invoice

65. Which of the following document certifies that the goods that are transported are insured under an open
policy?
a) Consular invoice
b) Insurance certificate
c) Commercial invoice
d) Bill of lading
Ans. b. Insurance certificate

66. The ___is the credit instrument that is developed by the non financial firm.
Ans. bankers acceptance

67. The term factoring is the financial transaction in which the business sells its accounts receivable at a
discount. (True/False)
Ans. True

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68. In which of the following technique the buyer is known as the forfaiter?
a) Banker’s acceptance.
b) Factoring.
c) Forfaiting.
d) Commercial invoice.
Ans. c. Forfaiting

69. The ___ helps in identification of the product and market.

Ans. export promotion scheme

70. The imports of second hand goods that have the minimum residual life of six years are allowed free of
licensee. (True/False)
Ans. False

71. Which of the following scheme aims at import of goods for free of cost?
a) Export Promotion Capital Goods Scheme
b) Software Technology Parks
c) Electronic Hardware Technology Parks
d) Duty exemption scheme
Ans. d. Duty exemption scheme

72. The ___ credit is mainly used for production, processing and packaging.
Ans. Pre-shipment

73. Name the credit that is provided by the EXIM bank and the commercial banks that are again financed by the
IDBI?
Ans. Long term

74. EXIM bank is a private owned body. (True/False)

Ans. False

75. Firms outsource as it enables them for faster turnaround time in their business operations.
(True/ False)
Ans. True.

76. Manufacturing costs vary from country to country. (True/ False)

Ans. True.

77. Low wages and salary are the prime motivators for US companies to outsource to India.
(True/ False) Ans. True.

78. Which of the following is not a reason for India’s outsourcing attractiveness?
a) Cost Restructuring. b) Better Capacity Management.
c) Focus on Core Business. d) Polite People.
Ans. Polite people.

79. IT/ITes outsourcing has brought some ill will/bad publicity towards Indians. (True/False)
Ans. True.

80. Outsourcing helps the firm with increased managerial control over all functions. (True/False)
Ans. False.