Management – Chapter 4

Today’s companies compete in a ____.
borderless world
Companies that think ____ have a competitive edge.
globally
In which stage, market potential is limited to home country, with all production and marketing facilities located at home?
Domestic
In the ____ stage a company usually adopts a multidomestic approach.
International
Global Dandelion, with marketing and production facilities located in many countries, is participating at what stage in the international arena?
Multinational stage
Quality-cast Telecom with an international division would be participating in what stage of the international arena?
International stage
The process of globalization typically passes through all of the following stages EXCEPT
interdomestic stage.
Stateless stage is also referred to as the ____ stage.
global
Color Copiers operates in a true global fashion, making sales and acquiring resources in whatever country offers the best opportunities and lowest cost, what stage of international development is it in?
Stateless stage
Which of the following refers to engaging in the international division of labor so as to obtain the cheapest sources of labor and supplies regardless of country?
Outsourcing
The Maquiladora industry along the Texas-Mexico border on the Mexico side uses cheap labor for assembling products. This lowers the price for U.S. consumers and is an example of
outsourcing
Most firms begin with which strategy to enter foreign markets?
Exporting
Which of the following is an entry strategy in which the organization maintains its production facilities within its home country and transfers its products for sale in foreign markets?
Exporting
What is exporting?
All of these
A form of exporting to less-developed countries is called
countertrade
Heineken begins by exporting its product into new markets, and then ____ to a local brewer to establish its position in the market.
licenses
Which of the following is a form of franchising?
Licensing
Your company is interested in producing and marketing a line of coffee that will penetrate the Chinese market. Your firm is willing to supply the equipment, products, product ingredients, trademark, and standardized operating system. What type of strategy are you going to use?
A franchise
Which of the following pairs of alternatives closely resemble each other in the amount of ownership, control and risk obtained in operating international businesses?
Franchising/licensing
A foreign subsidiary over which an organization has complete control is called a
wholly owned foreign affiliate.
The Write Pens, Inc. wants to reduce transferring costs by producing closer to the consumer in a foreign country. This will also help in reducing transportation and storage costs. Which strategy would be the best to use given the circumstances?
Direct investing
Go RVing, a U.S. company, built a subsidiary from scratch in England. This is an example of
greenfield venture.
The Nissan plant in Mississippi is an example of a ____.
greenfield venture
As a first step into international business, which two countries are most companies going to today?
China and India
_____ is the most widespread approach to international involvement in China and India
Outsourcing
The management of business operations conducted in more than one country is called
international management.
______ aspects of management do not change when doing business internationally.
All of these
Language, values, religion, and education all describe which dimension in the international environment?
Sociocultural
In international operations, the economic environment represents all of the following factors EXCEPT
laws and regulations.
Resource development, infrastructure, and exchange rates all describe which dimension in the international environment?
Economic
In international operations, the economic environment includes
infrastructure
Which of the following is a sociocultural factor in the international environment?
Language
______ is normally used to classify countries as developed or developing.
Per capita income
____ generally are located in Asia, Africa and South America.
LDCs
A country’s physical facilities that support economic activities make up its ____.
infrastructure
If you built a computer company in Africa and then found that your product was having difficulty being distributed to customers because of the road system, your problem would be related to
an inadequate infrastructure.
Your grocery store in India is having trouble getting the local farmers to supply you with the proper produce. This is a problem with India’s
resource market.
Exchange rates are included in which of the following international environments?
The economic environment
The legal-political environment, in international operations, includes which of the following?
Political risks
Political risk is defined as an organization’s risk of ____ due to politically based events or actions by host governments.
all of these
A company’s risk of loss of assets, earning power, or managerial control due to politically based events or action by host government is referred to as
political risk.
Rooftop International, Inc. buys insurance against host government takeover when investing in foreign countries. This is an example of which sector of the international environment?
Legal-political
Which of the following is NOT a legal-political factor in the international environment?
Language
A foreign terrorist kidnaps your firm’s marketing VP while the VP is in the host country. This is a harsh example of
political risk.
A nation’s ____ includes the shared knowledge, beliefs and values, as well as the common modes of behavior and ways of thinking, among members of a society
culture
Cultural factors in foreign countries are ____ the political and economic factors.
more perplexing than
____ refers to the degree to which people accept inequality in power among institutions, organizations, and people.
Power distance
Countries whose social values reflect low power distance
expect equality in power.
A loosely knit social framework in which individuals are expected to take care of themselves is called
individualism
Collectivist values are represented in the social framework of which of these?
Ecuador
Austria’s cultural preference is for achievement, heroism, assertiveness, and material success. This would be considered
masculinity
____ refers to a value characterized by people’s intolerance for uncertainty and ambiguity and resulting support for beliefs that promise certainty and conformity
Uncertainty avoidance
Which of these reflects a cultural preference for cooperation, group decision making, and quality of life?
Femininity
One of Hofstede’s social values that was developed later is
long-term orientation.
Recent research by the GLOBE project has extended ____ research and offered new insights for managers
Hofstede’s
All of the following are cultural dimensions as defined by the GLOBE Project, except:
masculinity
countries where women are often in positions of high status, the Globe Project would describe that culture as high in ____.
gender differentiation
A country that places emphasis on fairness and values kindness would be described by the Globe Project as high in ____.
humane orientation
According to Manager’s Shoptalk in Chapter 4, what does the gesture of scratching one’s head usually mean in Russia?
“I’m confused or skeptical.”
According to Manager’s Shoptalk in Chapter 4, one of the most universal gestures is:
A smile (happiness or politeness)
Which of the following is defined as a culture in which communication is used to enhance personal relationships?
High-context culture
Which of the following countries possesses a high degree of assertiveness?
Spain
Which of the following countries possesses a low degree of gender differentiation?
Denmark
Which of the following countries possesses a high performance orientation?
Taiwan
Countries that use several languages
have linguistic pluralism
In a(n) ____, people use communication primarily to exchange facts and information.
low-context culture
A ____ interaction requires more time because a relationship has to be developed, and trust and friendship must be established.
high-context
A cultural attitude marked by the tendency to regard one’s own culture as superior to others is called
ethnocentrism
When organization managers have a(n) ____ attitude, they value employees as an end in themselves.
humanistic
When organization managers have a(n) ____ attitude, they treat employees as resources to be used.
instrumental
How many nations signed on for negotiation when GATT was created in 1947?
23
The European Union has expanded to a ____-nation alliance
27
Which of the following has a goal to guide the nations of the world toward free trade and open markets?
WTO
The ____ is a single European currency that replaced 12 national currencies and unify a huge marketplace.
Euro
Which organization originated and supports the idea of small businesses operating on a global level?
NAFTA
Carrie’s Car Care receives more than 25% of its total sales revenues from operations outside of the United States. Carrie’s would be considered a
multinational corporation.
Which of the following characteristics distinguish a multinational corporation?
All of these
Which of the following companies place an emphasis on their home countries?
Ethnocentric
____ places an emphasis on a worldwide perspective.
Geocentric companies
All of the following are components of cultural intelligence, EXCEPT:
Analytical
Which of the following refers to the frustration and anxiety that result from constantly being subjected to strange and unfamiliar cues about what to do and how to do it?
Culture shock
Which of these is a low-context culture?
German
All of the following are considered emerging economies EXCEPT:
Canada
The extent to which trade and investments, information, social and cultural ideas, and political cooperation flow between countries is called:
Globalization
Creative Coverings is a small interior design company owned and managed by Lisa Smith. Since the company was established seven years ago, Lisa has only worked with clients near her hometown in Maryland. Creative Coverings fits into which stage of globalization?
Domestic
Exporting, licensing, and direct investing are called __________ strategies because they represent alternative ways to sell products and services in foreign markets.
market entry
CRL, a European plastics manufacturer, is considering forming an alliance with a U.S. military goods manufacturer to develop a new type of polymer that can be used for international industrial and military applications. Such a partnership represents what type of direct investment?
Joint Venture
For the past several years, foreign companies have invested more in business in ________ than in any other place in the world.
China
With its large English-speaking population, _______ has numerous companies offering services such as call-center operations, data-processing, computer programming, and technical support.
India
When the 2008 financial crisis began in the United States, it resulted in the collapse of the housing market and the failure of several large financial institutions. This crisis spread rapidly to the rest of the world. This example demonstrates which trend in the global economic environment?
World markets are economically interconnected
A.R.C. is a large non-profit humanitarian aid organization that has been forced to pull out of several African markets in recent years due to civil wars and large-scale violence. This demonstrates which frequently cited problem for international companies?
Political instability
Jana has a high tolerance for the unstructured, the unclear, and the unpredictable. She can best be described as having:
Low uncertainty avoidance
Kim, a Japanese expatriate working in Denmark, tends to use communication primarily to build personal social relationships. She feels that relationships and trust are more important than business. Kim is surprised that her business associates in Denmark do not share the same views. Based on this information, Kim most likely grew up in what type of culture?
High-context
Sam is known by his colleagues as a great communicator, with an uncanny ability to shift speech patterns, expressions, and body language to be in tune with people from different cultures. Based on this example, Sam is strong in which component of cultural intelligence?
Physical
In 2010, which of the following countries formed a free trade area with the ten countries that make up the Association of Southeast Asian Nations (ASEAN)?
China
________ is a concept that proposes that corporations can alleviate poverty and other social ills by selling to the world’s poorest people.
Bottom of the pyramid
Globalization
The extent to which trade and investments, information, ideas, and political cooperation flow between countries.
global mindset
The ability to appreciate and influence individuals, groups, organizations, and systems that represent different social, cultural, political, institutional, intellectual, and psychological characteristics.
Global Mindset : cognitive dimension
knowing about the global environment and global business, mentally understanding how cultures differ, and having the ability to interpret complex global changes
Global Mindset: psychological dimension
the emotional and affective aspect, This includes a liking for diverse ways of thinking and acting, a willingness to take risks, and the energy and self-confidence to deal with the unpredictable and uncertain
Global Mindset: social dimension
concerns the ability to behave in ways that build trusting relationships with people who are different from oneself.
What is globalization?
Globalization refers to the extent to which trade and investments, information, social and cultural ideas, and political cooperation flow between countries.
Why is it impossible for managers to isolate themselves from international forces?
The events, trends, and ideas that influence organizations in one country influence them in other countries as well.
A global mindset is a true desire to go global along with new techniques and skills that assist managers to succeed in global affairs.
False
Which activity would not be “key” to developing a global mindset?
Watching foreign affairs on the news
Foreign companies have invested more in businesses located in __________ than they spent anywhere else in the world.
China
Which country is becoming a major player in shifting the international landscape due to the rapidly growing consumer market?
Brazil
The bottom of the pyramid (BOP) concept proposes that corporations, by selling to the world’s poorest people, can alleviate poverty and other social ills as well as make significant profits.
True
Which is not true regarding a multinational corporation?
They are typically controlled by several management specialists.
An education company in the United States hires a vendor in India to create educational material for less than 50% of the cost of hiring a company in the United States. Which is this an example of?
Global outsourcing
Sodima is a French cooperative that owns the name, the trade secrets, and the patents on Yoplait yogurt. General Mills pays Sodima for the rights to sell Yoplait yogurt in the United States. This is an example of:
licensing.
The key factors of the international environment are the economic, the sociocultural, and the corporate environments.
False
The basic management functions are completely different for a company operating domestically rather than internationally.
False
Which is an example of a legal-political factor in the international environment?
Consumer protection
Which is not an example of political instability that can effect international company operations?
Loss of earning power
A nation’s __________ includes the shared knowledge, beliefs, and values, as well as the common modes of behavior and ways of thinking among members of a society.
culture
Managers trying to implement teams have had trouble in areas where cultural values support low power distance and a high tolerance for uncertainty, such as Mexico.
False
Countries whose social values reflect low power distance:
expect equality in power.
Which is not a goal of the regional trading alliances and international trade agreements?
Raising tariffs
The North American Free Trade Agreement (or NAFTA) includes the following nations:
United States, Canada, and Mexico.
One result of globalization is that countries, businesses, and people become more interdependent.
True
Vladimir is a manager at an automotive plant in the United States. His company has realized it needs to think globally since the whole world is a source of business and has struck a deal with an automotive supplier in Brazil to buy 15% of their parts at a discounted rate as this will better serve the company’s needs. His company has also determined that they can streamline their processes if they outsource some work. Relate what Vladimir’s company is demonstrating.
Globalization
Developing a global mindset requires managers to possess all these traits except:
partial in their point of view.
Benjamin has accepted a management position overseas in Japan. He is excited about this opportunity and has been learning about the Japanese culture and the complexities of how his current environment will change. Recently he has returned from a trip to Japan where he met several new people whom he now considers friends. Distinguish how Benjamin is using the global mindset.
He is using the cognitive and social dimensions.
Brazil has had slow economic growth over the last few years, but is still one of the fastest-growing emerging economies in the world.
True
Lenovo, the world’s largest PC maker, is redefining the meaning of a Chinese company. They are blending the best of Eastern philosophy and culture with the best of Western business and management thinking. Lenovo’s top managers now come from 14 different nations. Analyze how Shaheed’s software company in India can reflect the same refinements that Lenovo is making in the changing international landscape.
He can employ people from non-Indian cultures to bring different perspectives to his company.
A primary concern that Americans have about globalization is that:
they dislike the number of domestic jobs that have been offshored to other countries.
Nestlé SA gets most of its sales from outside its “home” country of Switzerland. Its 280,000 employees are spread all over the world and more than half of the company’s managers are non-Swiss. Nestlé has hundreds of brands and production facilities or other operations in almost every country in the world. Decide how Raquel’s food distribution company, which has not yet branched out internationally, can follow Nestlé’s example.
They can become a geocentric company and favor no specific country.
What type of business arrangement can be the easiest and most cost-effective way for a company to enter the international arena?
Exporting
Oliver’s doctor in Nevada has decided to run several tests on him. The test results are then sent to India to be read by a doctor there because it costs less to analyze them in India. Isabelle has decided to go into business for herself and has been able to purchase a complete package of materials and services including managerial advice. Differentiate the market entry strategies that Oliver and Isabelle are both benefiting from.
Isabelle is using direct investing, and Oliver is using franchising.Isabelle is using franchising, and Oliver is using offshoring.
When a U.S. company risks the loss of its assets in a foreign country due to actions by the host government in that country, this is called:
political risk.
Bangladesh native Iqbal Quadir realized that connectivity equals productivity. He also knew his impoverished homeland was one of the least connected places on Earth. He collaborated with a fellow countryman to create Village Phone, which allows entrepreneurs (mostly women) to obtain microloans to purchase cell phones. This venture has resulted in thousands of new small businesses and improved communication. Decide what Iqbal is demonstrating with the invention of Village Phone.
The infrastructure is making economic development possible.
In a __________, people use communication primarily to exchange facts and information.
low-context culture
Jiyaing is an HR manager at a research firm in China, and her company has decided to open a branch in the United States. Jiyaing has been assigned to assist the HR department in the new branch as they become familiar with the company’s policies. Jiyaing would like to spend a little time getting acquainted with the people in the new branch while she’s working with them, but they mainly want information that pertains to the company. Identify what type of cultural intelligence Jiyaing needs to cultivate.
Jiyaing needs to develop low-context culture.
NAFTA is a trade agreement between Canada, the United States, and Mexico. Which of the following is not one of the intended outcomes of this agreement?
Higher unemployment in the United States
Raoul owns a dry goods store in Germany and is part of the European Union (EU) that uses the euro as currency. His business had steadily grown due in large part to the ability to easily export his products to other countries until the global recession began. Everything that he exports is now heavily taxed, which has caused him to have to lay off a number of employees. In the event that the EU returns to using national currencies, what are some things that Raoul could do to prepare?
He can develop long-term orientation to ensure he meets his current obligations.He can consider how to expand his company and how he would pay employees.
Globalization
refers to the extent to which trade and investments, information, social and cultural ideas, and political cooperation flow between countries.
China
Foreign companies have invested more in businesses located in __________ than they spent anywhere else in the world.
Brazil
Which country is becoming a major player in shifting the international landscape due to the rapidly growing consumer market?
True
(T/F) The bottom of the pyramid (BOP) concept proposes that corporations, by selling to the world’s poorest people, can alleviate poverty and other social ills as well as make significant profits.
Global Outsourcing
An education company in the United States hires a vendor in India to create educational material for less than 50% of the cost of hiring a company in the United States. Which is this an example of?
Licensing
Sodima is a French cooperative that owns the name, the trade secrets, and the patents on Yoplait yogurt. General Mills pays Sodima for the rights to sell Yoplait yogurt in the United States. This is an example of:
Consumer Protection
What is an example of a legal-political factor in the international environment?
Culture
A nation’s __________ includes the shared knowledge, beliefs, and values, as well as the common modes of behavior and ways of thinking among members of a society.
Expect Equality in power
Countries whose social values reflect low power distance:
Domestic Stage
A company in this stage makes and sells products or services in only one country.
Franchising
This strategy involves licensing an entire business to a person or organization in another country.
Joint Venture
This strategy involves collaborating with a foreign company to create a third company.
NAFTA
This agreement eliminates trade restrictions between Canada, the United States, and Mexico.
Individualism
People who are classified by Hofstede as having this national value act on their own and have loose ties with others in society.
Long Term Orientation
People who are classified by Hofstede as having this national value have a concern for the future and highly value thrift and perseverance.
Low Context Culture
In this type of society, business transactions are more important than building relationships and trust.
More
A licensing strategy is ____ risky than an exporting strategy when entering the global market.
Exporting
Jerzy wants to keep his overall costs down and to enter into the international marketplace slowly and carefully. He is considering the use of countertrade, where he would send his shoes to Spain in return for high-quality Spanish cowhides.
Global Outsourcing
Jerzy knows that he will have to expand his operations if he wants to produce enough shoes for an international market. He has heard that there are shoe dyers in the Ukraine who will work for much lower prices than the dyers in his town charge. Jerzy is considering sending some of his work out to a Ukrainian shoe dyeing factory as a way to keep his costs down while he determines exactly how much demand exists for his product.
Joint Venture
In thinking about it, Jerzy realizes that he and Leon could create a shoe manufacturing facility in Spain. Doing so would certainly require a large outlay of money, but Jerzy thinks that with his expertise in shoe design and Leon’s expertise in navigating Spanish management and business practices, they could create a partnership that has true synergy.
Per Capita Income
The designation of developing versus developed is based in part on a country’s ____________.
Low Labor Cost
One of the biggest advantages of doing business in less-developed countries is the:
Long Term Orientation
The owners of Personal Printing and Paper are both thrifty and patient. In their search for the highest quality paper, they actually established a cotton breeding research facility to create new and better types of cotton to be used in their products. Yes, it is going to take awhile for them to see a payout on their investment, but it will be worth the wait.
High Uncertainty Avoidance
Last week, Swanita approached her boss in tears. “But I’ve been sitting at the same desk for 20 years!” she exclaimed. “How will I be able to do my work if you put me all the way across the office from the people I’m supposed to support?”
High Femininity
Quality of life is important at Social Science Systems. All employees are eligible for child care, elder care, or pet care services, and employees can take as many vacation days as they need, as long as they get their work done. Employees regularly cooperate with each other to cover difficult or undesirable work shifts.
Interdependent
One result of globalization is that countries, businesses, and people become more __________.
Globalization
Vladimir is a manager at an automotive plant in the United States. His company has realized it needs to think globally since the whole world is a source of business and has struck a deal with an automotive supplier in Brazil to buy 15% of their parts at a discounted rate as this will better serve the company’s needs. His company has also determined that they can streamline their processes if they outsource some work. Relate what Vladimir’s company is demonstrating.
True
(T/F) Brazil has had slow economic growth over the last few years, but is still one of the fastest-growing emerging economies in the world.
Exporting
What type of business arrangement can be the easiest and most cost-effective way for a company to enter the international arena?
Political Risk
When a U.S. company risks the loss of its assets in a foreign country due to actions by the host government in that country, this is called:
Low Context Culture
In a __________, people use communication primarily to exchange facts and information.
Globalization
The extent to which trade and investments, information, ideas, and political cooperation flow between countries.
Global Mindset
The ability to appreciate and influence individuals, groups, organizations, and systems that represent different social, cultural, political, institutional, intellectual, and psychological characteristics.