question

T/F: An overseas operation that is totally owned and controlled by an MNC is a wholly owned subsidiary.

answer

TRUE

question

T/F:The primary reason for the use of licensing agreements is a desire by the MNC for total control over its products in overseas markets.

answer

FALSE

question

T/F:A joint venture is an agreement in which two or more partners own and control an overseas business.

answer

TRUE

question

T/F:A license is a structural arrangement in which domestic divisions are given worldwide responsibility for product groups.

answer

FALSE

question

T/F: A franchise is an agreement that allows one party to use an industrial property right in exchange for payment to the other party.

answer

FALSE

question

T/F: Franchising provides the franchisor with a new stream of income and the franchisee with a time-proven concept and products that can be quickly brought to market.

answer

TRUE

question

T/F:Companies in the mature stage of international business involvement are the most likely to adopt an international division structure

answer

FALSE

question

T/F: A disadvantage of the international division structure is that it separates a firm's domestic and international managers, which can result in two different camps with divergent objectives.

answer

TRUE

question

T/F: A structural arrangement in which domestic divisions are given worldwide responsibility for product groups is referred to as a global area division structure.

answer

FALSE

question

T/F: Firms that pursue a global product division structure typically have products that are in the maturity stage of the product life cycle.

answer

FALSE

question

T/F: One disadvantage of the global product division structure is the necessity of duplicating facilities and staff personnel within each division.

answer

TRUE

question

T/F: A structure under which global operations are organized on a geographic rather than a product orientation is referred to as a global area structure.

answer

TRUE

question

T/F: Companies that are in growing businesses and have broad product lines most often use a global area division structure.

answer

FALSE

question

T/F: An advantage of the global area division structure is that it allows the division manager to cater to the tastes of the local market and make rapid decisions to accommodate environmental changes.

answer

TRUE

question

T/F: An advantage of the global functional division structure is that only the CEO can be held accountable for the profits.

answer

FALSE

question

T/F: One of the main objectives in developing the structure for joint ventures is to help the partners address and effectively meld their different values and organizational preferences.

answer

TRUE

question

T/F: In most companies, mutual adjustment is achieved by assigning people to a specific project and having them meet face-to-face and work out a plan of action of designing the new product.

answer

TRUE

question

T/F: Formalization is an organizational characteristic that assigns individuals to specific, well-defined tasks.

answer

FALSE

question

T/F: Specialization is the use of defined structures and systems in decision-making, communicating and controlling.

answer

FALSE

question

T/F: Centralization is a management system in which important decisions are made at the top.

answer

TRUE

question

The primary reason for the use of _____ is a desire by the MNC for total control and the belief that managerial efficiency will be better without outside partners. A. Licensing agreements B. Franchising C. Wholly owned subsidiaries D. Joint ventures

answer

C. Wholly owned subsidiaries

question

This is an agreement in which two or more partners own and control an overseas business. A. Franchise B. Wholly owned subsidiary C. Licensing agreement D. Joint venture

answer

D. Joint venture

question

The equity joint venture: A. Is characterized by one group merely providing a service for another B. Involves a financial investment by the MNC in a business enterprise with a local partner C. Organizes worldwide operations based primarily on function and secondarily on product D. Provides the most benefits when the need for product specification or differentiation is high

answer

B. Involves a financial investment by the MNC in a business enterprise with a local partner

question

The nonequity venture: A. Is characterized by one group merely providing a service for another B. Provides the most benefits when the need for product specification or differentiation is high C. Involves a financial investment by the MNC in a business enterprise with a local partner D. Organizes worldwide operations based primarily on function and secondarily on product

answer

A. Is characterized by one group merely providing a service for another

question

The two types of joint ventures are: A. Equity and non-equity ventures B. Proprietary and public ventures C. Statutory and unofficial ventures D. External and internal ventures

answer

A. Equity and non-equity ventures

question

26. (p. 312) This is an agreement that allows one party to use an industrial property right in exchange for payment to the other party. A. Franchise B. Joint venture C. License D. Certificate of proprietary usage

answer

C. License

question

A _____ is a business arrangement under which one party allows another to operate an enterprise using its trademark, logo, product line and methods of operation in return for a fee. A. License B. Franchise C. Certificate of proprietary usage D. Joint venture

answer

B. Franchise

question

These agreements typically require payment of a fee upfront and then a percentage of the revenues. A. Franchise B. Wholly owned subsidiary C. Export D. Joint venture

answer

A. Franchise

question

Aircraft manufacturing fits which of the following globalization versus local responsiveness combination? A. High pressure for globalization, high pressure for local responsiveness B. High pressure for globalization, low pressure for local responsiveness C. Low pressure for globalization, low pressure for local responsiveness D. Low pressure for globalization, high pressure for local responsiveness

answer

B. High pressure for globalization, low pressure for local responsiveness

question

Clothing manufacturing fits which of the following globalization versus local responsiveness combination? A. Low pressure for globalization, low pressure for local responsiveness B. Low pressure for globalization, high pressure for local responsiveness C. High pressure for globalization, low pressure for local responsiveness D. High pressure for globalization, high pressure for local responsiveness

answer

B. Low pressure for globalization, high pressure for local responsiveness

question

A common first choice among manufacturing firms, especially those with technologically advanced products, would be to develop a(n): A. Domestic policy B. Export arrangement C. Cartel arrangement D. Import quota

answer

B. Export arrangement

question

In a company that has a narrow product line, the export manager usually reports directly to the head of: A. Purchasing B. Personnel C. Production D. Marketing

answer

D. Marketing

question

The structural arrangement that allows a company to develop an overall, unified approach to international operations and helps the firm develop a cadre of internationally experienced managers is an advantage of a(n): A. Mixed organization structure B. Global area division structure C. Global product division structure D. International division structure

answer

D. International division structure

question

34. (p. 317) Pressure by local foreign government for continued growth of international sales encourage on-site: A. Maintenance B. Supply and distribution operations C. Manufacturing operations D. Safety operations

answer

C. Manufacturing operations

question

A structural arrangement that handles all international operations out of a division created for this purpose is referred to as a(n): A. Worldwide organizational structure B. Global matrix structure C. International division structure D. Overseas network structure

answer

C. International division structure

question

Companies still in the development stages of international business involvement are most likely to adopt the: A. International division structure B. Global product division structure C. Global area division structure D. Global functional division structure

answer

A. International division structure

question

According to the text, all of the following types of companies are likely to adopt the international division structure except: A. Companies with limited geographic diversity B. Companies with a large number of executives with international expertise C. Companies still in the developmental stage of international business D. Companies with small international sales

answer

B. Companies with a large number of executives with international expertise

question

A structural arrangement in which domestic divisions are given worldwide responsibility for product groups is referred to as a(n): A. International division structure B. Global product division structure C. Global area division structure D. Global functional division structure

answer

B. Global product division structure

question

The products sold by firms that adopt a global product division structure are generally in the _____ stage of the product life cycle. A. Introduction B. Growth C. Maturity D. Decline

answer

B. Growth

question

Which of the following provides the most benefits when the need for product specification or differentiation is high? A. International division B. Global product division C. Global area division D. Global functional division

answer

B. Global product division

question

A structure under which global operations are organized on a geographic rather than a product basis is referred to as a(n): A. Global area division structure B. Global product division structure C. International division structure D. Global functional division structure

answer

A. Global area division structure

question

That division managers may pursue currently attractive geographic prospects for their products and neglect other areas with better long-term potential is a major drawback of the: A. International division structure B. Global product division structure C. Global area division structure D. Global functional division structure

answer

B. Global product division structure

question

Which of the following is an advantage of a global area division structure? A. The structural arrangement helps a firm manage a diverse product line B. The structural arrangement helps a firm cater to local needs in foreign markets C. The marketing, production and finance divisions of the firm can be coordinated on a product-by-product global basis D. The structural arrangement helps a firm develop an overall, unified approach to international markets

answer

B. The structural arrangement helps a firm cater to local needs in foreign markets

question

A global area division structure most often is used by companies that are in _____ businesses and have _____ product lines. A. Growing; broad B. Mature; narrow C. Growing; narrow D. Mature; broad

answer

B. Mature; narrow

question

The difficulty encountered in reconciling a product emphasis with a geographic orientation is the primary disadvantage of a(n): A. International division structure B. Global product division structure C. Global area division structure D. Global functional division structure

answer

C. Global area division structure

question

Which of the following organizes worldwide operations based primarily on function and secondarily on product? A. International division structure B. Global product division structure C. Global area division structure D. Global functional division structure

answer

D. Global functional division structure

question

A global functional division structure is used primarily by: A. Service companies B. Extractive companies C. Light manufacturing companies D. Heavy manufacturing companies

answer

B. Extractive companies

question

All of the following are advantages of the global functional division structure except: A. An emphasis on functional expertise B. A tight centralized control C. A relatively lean managerial staff D. The chief executive officer is held accountable for the profits

answer

D. The chief executive officer is held accountable for the profits

question

A structure that is a combination of a global product, an area or a functional arrangement is referred to as a(n) _____ organizational structure. A. Assimilated B. Transnational C. Mixed D. Team-based

answer

C. Mixed

question

A multinational structural arrangement that combines elements of function, product and geographic designs, while relying on a network arrangement to link worldwide subsidiaries is referred to as a: A. Transnational network structure B. Cross-cultural matrix structure C. Transnational divisional structure D. Cross-cultural network structure

answer

A. Transnational network structure

question

A _____ is designed to help MNCs take advantage of global economies of scale while also being responsive to local customer demands. A. Global matrix structure B. Transnational network structure C. Worldwide divisional structure D. Cross-cultural matrix structure

answer

B. Transnational network structure

question

At the center of the _____ are nodes, which are units charged with coordinating product, functional and geographic information. A. Cross-cultural matrix structure B. Worldwide divisional structure C. Transnational network structure D. Global product division structure

answer

C. Transnational network structure

question

Subsidiaries that are located anywhere in the world where they can benefit the organization are called: A. Chaebols B. Keiretsus C. Specialized subunits D. Dispersed subunits

answer

D. Dispersed subunits

question

Specialized operations are: A. Designed to tap specialized expertise or other resources in the company's worldwide subsidiaries B. Subsidiaries that are located anywhere in the world where they can benefit the organization C. Designed to take advantage of low factor costs, while others are responsible for providing information on new technologies or consumer trends D. Used to share information and resources throughout dispersed and specialized subunits

answer

A. Designed to tap specialized expertise or other resources in the company's worldwide subsidiaries

question

Interdependent relationships are: A. Designed to tap specialized expertise or other resources in the company's worldwide subsidiaries B. Subsidiaries that are located anywhere in the world where they can benefit the organization C. Used to share information and resources throughout the dispersed and specialized subunits D. Designed to take advantage of low factor costs, while others are responsible for providing information on new technologies or consumer trends

answer

C. Used to share information and resources throughout the dispersed and specialized subunits

question

In terms of cultural control in a global area division: A. It is treated like all other MNC structural divisions B. Local subsidiary culture is often the most important C. It is possible for some companies, but not always necessary D. Culture must support the shared decision making

answer

B. Local subsidiary culture is often the most important

question

In which of the following MNC structures are tight process bureaucratic controls used to maintain product quality and consistency? A. Transnational network structure B. Global area division C. Matrix structure D. Global product division

answer

D. Global product division

question

The decision-making control in which local units are given autonomy is characteristic of a(n): A. Global area division structure B. International division structure C. Global product division structure D. Transnational network structure

answer

A. Global area division structure

question

The output control in which profit responsibility is shared with product and geographic units is characteristic of a(n): A. Global area division structure B. International division structure C. Matrix structure D. Transnational network structure

answer

C. Matrix structure

question

Bureaucratic control is not very important in which type of multinational structure? A. Global product division structure B. Global area division structure C. Matrix structure D. International division structure

answer

C. Matrix structure

question

Which basic value is not common in Asian firms? A. Group B. Trust C. Confrontation D. Fluid

answer

C. Confrontation

question

Individuals who work for a company, usually via the Internet and move on to other employment when their assignment is done are known as: A. Purchasing agents B. Marketing managers C. International outsourcers D. Electronic freelancers

answer

D. Electronic freelancers

question

_____ is the use of defined structures and systems in decision-making, communicating and controlling. A. Formalization B. Specialization C. Concentration D. Interpretation

answer

A. Formalization

question

In a study of U.S. and Japanese firms in Taiwan, objective formalization was measured by: A. Use of informal controls B. The extent to which goals were vague and unspecified C. The number of different documents given to employees D. Use of culturally induced values in getting things done

answer

C. The number of different documents given to employees

question

As an organizational characteristic, _____ is the assigning of individuals to specific, well-defined tasks. A. Interpretation B. Concentration C. Formalization D. Specialization

answer

D. Specialization

question

Specialization in an international context can be classified into: A. Diagonal and vertical specialization B. Vertical and parallel specialization C. Horizontal and vertical specialization D. Diagonal and parallel specialization

answer

C. Horizontal and vertical specialization

question

The assignment of jobs so that individuals are given a particular function to perform and tend to stay within the confines of this area is referred to as: A. Diagonal specialization B. Parallel specialization C. Vertical specialization D. Horizontal specialization

answer

D. Horizontal specialization

question

The assignment of work to groups of departments where individuals are collectively responsible for performance is referred to as: A. Horizontal specialization B. Vertical specialization C. Lateral specialization D. Parallel specialization

answer

B. Vertical specialization

question

_____ is a management system in which important decisions are made at the top. A. Centralization B. Decentralization C. Horizontal specialization D. Vertical specialization

answer

A. Centralization

question

Pushing decision making down the line and getting the lower-level personnel involved is referred to as: A. Centralization B. Decentralization C. Horizontal specialization D. Vertical specialization

answer

B. Decentralization

question

T/F: Political risk is the likelihood that a multinational corporation's foreign investment will be constrained by a host government's policies.

answer

TRUE

question

T/F: Over the past decade and with the recent terrorist attacks on the U.S., political risk assessment has become less vital to MNCs.

answer

FALSE

question

T/F: China's decision regarding restrictions on foreign exchange transactions is a micro political risk because it affects all MNCs.

answer

FALSE

question

T/F: Micro political risk analysis is directed toward government policies and actions that influence selected sectors of the economy or specific foreign businesses.

answer

TRUE

question

T/F: China's decision regarding restrictions on foreign exchange transactions represents a macro political risk because it affects all MNCs.

answer

TRUE

question

T/F: Macro risk issues often take forms such as industry regulations, taxes of specific types of business activity and various restrictive local laws.

answer

FALSE

question

T/F: Firms that are at the greatest risk in regard to expropriation are in extractive, agricultural or infrastructural industries such as utilities and transportation because of the importance of these industries to the country.

answer

TRUE

question

T/F: Examples of ownership-control risks include tariffs on export and imports and well as restrictions on exports.

answer

FALSE

question

T/F: Operational risks result from government policies and procedures that directly constrain the management and performance of local operations.

answer

TRUE

question

T/F: In a conglomerate investment, the goods or services produced are not similar to those produced at home.

answer

TRUE

question

T/F: Conglomerate investments usually are rated as low risk, because foreign governments see them as providing fewer benefits to the MNC and greater benefits to the country than other investments.

answer

FALSE

question

T/F: Vertical investments run the risk of being taken over by government because they are export-oriented and governments like a business that helps it to generate foreign capital.

answer

TRUE

question

T/F: There are three sectors of economic activity: the primary sector, the secondary sector and the service sector.

answer

FALSE

question

T/F: Some MNCs attempt to manage political risk through a quantification process in which a range of variables are simultaneously analyzed to derive an overall rating of the degree of political risk in a given jurisdiction.

answer

TRUE

question

T/F: Protective and defensive techniques are designed to encourage the host government to actively participate in the management of the MNC.

answer

FALSE

question

T/F: Comprehensive political strategies are most important in stable policy environments

answer

FALSE

question

T/F: Local knowledge can be internalized primarily as a result of an MNC operating in that market.

answer

FALSE

question

T/F: In the context of international strategic alliances, value-claiming activities are competitive and distributive.

answer

TRUE

question

T/F: The most difficult cultural differences to manage in international strategic alliances are power distance and uncertainty avoidance.

answer

FALSE

question

T/F: Host government mandates that require foreign investors to partner with local state-owned firms or follow local-content rules may still have a positive impact on MNCs.

answer

TRUE

question

Which of the following is not a challenge of doing business in Russia? A. Corruption B. Red tape C. Strong faith in government policies D. Security concerns

answer

C. Strong faith in government policies

question

Not all MNCs are confident about international investment in countries with: A. Low labor costs B. Political unrest C. Emerging economies D. Cultural differences

answer

B. Political unrest

question

The following is not an example of risk factors for an MNC: A. Freezing the movement of assets out of the host country B. Limits on the remittance of profits or capital C. Devaluing the currency D. Complying with contractual terms of agreements

answer

D. Complying with contractual terms of agreements

question

_____ risk is the likelihood that a multinational corporation's foreign investment will be constrained by a host government's policies. A. Social B. Development C. Legal D. Political

answer

D. Political

question

Over the past decade political risk has become: A. An area closely watched by developing countries, but virtually ignored by developed countries B. A vital area for MNCs to assess and manage C. A much less pervasive and minor threat facing international management D. Virtually obsolete for international firms as a result of controls imposed by the UNO

answer

B. A vital area for MNCs to assess and manage

question

The following actions raise the political risk of doing business in China except: A. Interpretation of rules and regulations by officials B. Industrial piracy C. Pressure on the MNCs to do things in a particular way D. Concerns on safety and reliability of product quality

answer

D. Concerns on safety and reliability of product quality

question

_____ reviews major political decisions that are likely to affect all business conducted in a particular country. A. Macro political risk analysis B. Micro political risk analysis C. Standard political risk analysis D. Multidimensional political risk analysis

answer

A. Macro political risk analysis

question

China's decision regarding restrictions on foreign exchange transactions is a _____ political risk because it affects all MNCs. A. Micro B. Standard C. Macro D. Multidimensional

answer

C. Macro

question

In recent years _____ risk analysis has become of increasing concern to MNCs because of the growing number of countries that are finding their economies in trouble as in Southeast Asia or even worse, unable to make the transition to a market-driven economy. A. Micro B. Basic C. Macro D. Complex

answer

C. Macro

question

China's government policies regarding investment in the telecommunications industry fall into the _____ political risk category. A. Macro B. Micro C. Integrative D. Relative

answer

B. Micro

question

The economies of China, Russia, India and Vietnam present _____ political risk for MNCs. A. Macro B. Micro C. Proactive D. Relative

answer

A. Macro

question

_____ risk issues often take forms such as industry regulation, taxes on specific types of business activity and various restrictive local laws. A. Macro B. Standard C. Direct D. Micro

answer

D. Micro

question

According to the 2009 Transparency International Corruption Perceptions Index, which of the following is the least corrupt nation? A. India B. United States C. Spain D. New Zealand

answer

D. New Zealand

question

According to the 2009 Transparency International Corruption Perceptions Index, which of the following is the most corrupt nation? A. El Salvador B. Columbia C. Lebanon D. Somalia

answer

D. Somalia

question

The following are internal factors which MNCs may use to evaluate political risk except: A. Power struggles among elites B. Ethnic confrontations C. Regional struggles D. Regional instabilities

answer

D. Regional instabilities

question

The following is not an external factor used by MNCs for evaluating political risks: A. Alliances with major and regional powers B. Anti-establishment movements C. Internal groupings D. Sources of key raw materials

answer

B. Anti-establishment movements

question

Laws that require that nations hold a majority interest in the operation are known as: A. Commercial laws B. Appropriation laws C. Indigenization laws D. Expropriation laws

answer

C. Indigenization laws

question

The seizure of businesses by a host country with little, if any, compensation to the owners is referred to as: A. Nationalization B. Expropriation C. Dispossession D. Removal

answer

B. Expropriation

question

Expropriation is more likely to occur in: A. Non-Western governments that are poor, relatively unstable and suspicious of foreign multinationals B. Western governments that are rich, relatively stable and are experienced in dealing with foreign multinationals C. Non-Western governments that are neither rich nor poor, relatively stable and are unsure about the presence of foreign multinationals D. Western governments that are moderately wealthy, relatively stable and are new at dealing with foreign multinationals

answer

A. Non-Western governments that are poor, relatively unstable and suspicious of foreign multinationals

question

According to the text, the following are all forms of terrorism except: A. Classic terrorism B. Amateur terrorism C. Religious motivated terrorism D. Political terrorism

answer

D. Political terrorism

question

When terrorism entails a specific, well-defined objective pursued by well-trained, professional, underground members, it is called A. traditional terrorism B. amateur terrorism C. religiously motivated terrorism D. classic terrorism

answer

D. classic terrorism

question

Political risks can be broken down into three basic categories. These are: A. Transfer risks, ownership risks and labor risks B. Ownership risks, operational risks and economic risks C. Operational risks, bureaucratic risks and transfer risks D. Transfer risks, operational risks and ownership-control risks

answer

D. Transfer risks, operational risks and ownership-

question

_____ risks stem from government policies that limit the transfer of capital, payments, production, people and technology in or out of a country. A. Operational B. Bureaucratic C. Transfer D. Expropriation

answer

C. Transfer

question

Tariffs on exports and imports, restrictions on exports, dividend remittance and capital repatriation are examples of: A. Transfer risks B. Expropriation risks C. Operational risks D. Exchange risks

answer

A. Transfer risks

question

_____ risks result from government policies and procedures that directly constrain the management and performance of local operations. A. Transfer B. Operational C. Ownership-control D. Exchange

answer

B. Operational

question

Price controls, financing restrictions, export commitments, taxes and local-sourcing requirements are examples of: A. Ownership-control risks B. Operational risks C. Transfer risks D. Functional risks

answer

B. Operational risks

question

_____ risks are brought about by government policies or actions that inhibit ownership or control of local operations. A. Transfer B. Functional C. Operational D. Ownership-control

answer

D. Ownership-control

question

Foreign ownership limitations, pressure for local participation, confiscation, expropriation and abrogation of property rights are examples of: A. Transfer risks B. Functional risks C. Ownership-control risks D. Tactical risks

answer

C. Ownership-control risks

question

In a _____ investment, the goods or services produced are not similar to those produced at home. A. Horizontal B. Vertical C. Network D. Conglomerate

answer

D. Conglomerate

question

_____ investments include the production of raw materials or intermediate goods that are to be processed into final products. A. Vertical B. Matrix C. Conglomerate D. Horizontal

answer

A. Vertical

question

_____ investments run the risk of being taken over by the host-country government because they are export-oriented and governments like a business that helps it to generate foreign capital. A. Conglomerate B. Vertical C. Horizontal D. Lateral

answer

B. Vertical

question

_____ investments involve the production of goods or services that are the same as those produced at home. A. Conglomerate B. Lateral C. Horizontal D. Vertical

answer

C. Horizontal

question

_____ investments typically are made with an eye toward satisfying the host country's market demands. As a result, they are not very likely to be takeover targets. A. Vertical B. Horizontal C. Conglomerate D. Hierarchical

answer

B. Horizontal

question

The special nature of foreign direct investment is not related to: A. Sector B. Technology C. Ownership D. Operations

answer

D. Operations

question

Some multinational corporations attempt to manage political risk through simultaneously analyzing a range of variables to derive an overall rating of the degree of political risk in a given jurisdiction. This is referred to as a: A. Quantification process B. Quantification circle C. Quantity risk analysis D. Quantity management

answer

A. Quantification process

question

MNCs attempt to manage political risk through a quantification process, to derive an overall rating of the degree of political risk in a given jurisdiction. The factors that are quantified reflect all of the following except: A. Political and economic environment B. Domestic economic conditions C. Social conditions D. External economic conditions

answer

C. Social conditions

question

Which of the following criteria involves maximum political risk? A. International financial standing B. Economic growth during previous 5 years C. Restrictions imposed on imports D. Effectiveness of public administration

answer

D. Effectiveness of public administration

question

The following are listed as techniques for responding to political risks except: A. Relative bargaining power analysis B. Realistic bargaining power analysis C. Integrative techniques D. Proactive political strategies

answer

B. Realistic bargaining power analysis

question

The theory behind _____ is quite simple. The MNC works to maintain a stronger bargaining power position than that of the host country. A. Analogous negotiating power B. Pertinent bargaining power C. Proportionate negotiating power D. Relative bargaining power

answer

D. Relative bargaining power

question

_____ techniques are designed to help the overseas operation become part of the host country's infrastructure. A. Protective B. Defensive C. Integrative D. Statutory

answer

C. Integrative

question

All of the following are examples of integrative techniques except: A. Developing good relations with the host government and other local political parties B. Doing as little local manufacturing as possible and conducting all research and development outside the country C. Producing as much of the product locally as possible with the use of in-country suppliers and subcontractors, thus making it a "domestic" product D. Developing effective labor-management relations

answer

B. Doing as little local manufacturing as possible and conducting all research and development outside the country

question

_____ techniques are designed to discourage the host government from interfering in operations. A. Integrative and unifying B. Consolidating and defensive C. Protective and unifying D. Protective and defensive

answer

D. Protective and defensive

question

Examples of protective and defensive techniques include all of the following except: A. Limiting the responsibility of local personnel and hiring only those who are vital to the operations B. Raising capital from local banks and the host government as well as outside forces C. Diversifying production of the product among a number of countries D. Producing as much of the product locally as possible with the use of in-country suppliers and subcontractors, thus making it a "domestic" product

answer

D. Producing as much of the product locally as possible with the use of in-country suppliers and subcontractors, thus making it a "domestic"

question

Benefits of proactive political strategies include all of the following except: A. Enhancing government relations in unstable and transitional policy environments B. Mitigating risk before it becomes unmanageable C. Providing support for national and sub-central governments in transitional economies D. Counteracting competitors' efforts to influence government policy

answer

C. Providing support for national and sub-central governments in transitional economies

question

Examples of proactive political strategies include all of the following except: A. Formal lobbying B. Campaign financing C. Seeking advocacy through embassies and consulates of the home country D. Downsizing and transferring business elsewhere

answer

D. Downsizing and transferring business elsewhere

question

All the following are motivations for firms to enter into international strategic alliances except: A. Faster entry and payback B. Economies of scale C. Co-opting or blocking competition D. Stronger control over technologies and patents

answer

D. Stronger control over technologies and patents

question

Which of the following cultural differences tend to more disruptive for international joint ventures than the others? A. Power distance B. Uncertainty avoidance C. Individualism D. Masculinity

answer

B. Uncertainty avoidance

question

Which of the following is not a critical legal issue for successful termination of international alliances? A. Conditions of termination B. Disposition of assets and liabilities C. Distributorship arrangements D. People-related issues

answer

D. People-related issues

question

Which of the following is not a critical business issue for successful termination of international alliances? A. The basic decision to exit B. People-related issues C. Rights over sales territories and obligations to customers D. Relations with the host government

answer

C. Rights over sales territories and obligations to customers

question

When host governments do not require alliances as a condition for entry many MNCs: A. Are advised not to voluntarily pursue alliances as they tend to be problematic B. Are usually indifferent about establishing alliances C. Find that having an alliance is advantageous to their entry and expansion D. Are likely to consider alliances, except in emerging markets and highly regulated industries

answer

C. Find that having an alliance is advantageous to their entry and expansion

question

T/F: Home-country nationals are managers who are citizens of the country where the MNC is headquartered.

answer

TRUE

question

T/F: Historically, MNCs have staffed key positions in their foreign affiliates with host-country nationals.

answer

FALSE

question

T/F: Home-country nationals are local managers who are hired by the MNC.

answer

FALSE

question

T/F: Managers who live and work outside their home country are called expatriates.

answer

TRUE

question

T/F: An individual from a host-country who is assigned to work in the host-country is referred to as a multipatriate.

answer

FALSE

question

T/F: Factors used to choose personnel for international assignments are referred to as international selection criteria.

answer

TRUE

question

T/F: Most MNCs strive for a balance between age and experience in their expatriate employees.

answer

TRUE

question

T/F: The most common recruiting and selection procedures for international assignments would be background and reference checks.

answer

FALSE

question

T/F: Anticipatory and in-country factors will influence the expatriate's mode and degree of adjustment to an overseas assignment.

answer

TRUE

question

T/F: One of the reasons why there has been a decline in the number of expats in recent years is that MNCs have found that the expense can be prohibitive.

answer

TRUE

question

T/F: Base salary is the amount of money that an expatriate normally receives in the home country plus a cost-of-living adjustment.

answer

FALSE

question

T/F: Allowances are an expensive feature of expatriate compensation packages

answer

TRUE

question

T/F: An approach to developing an expatriate compensation package that is based on ensuring the expat is "made whole" and does not lose money by taking the assignment is referred to as the balance-sheet approach.

answer

TRUE

question

T/F: An approach to developing an expatriate compensation package that involves giving the expat a predetermined amount of money and letting the individual make his/her own decisions regarding how to spend it is referred to as localization.

answer

FALSE

question

T/F: For most overseas managers, repatriation occurs within five years of the time they leave.

answer

TRUE

question

T/F: Repatriation agreements typically promise an expatriate a specific position and salary when he/she returns to the home office.

answer

FALSE

question

T/F: The hardest training, in terms of preparation time is to place a cultural integrator in each foreign operation.

answer

FALSE

question

T/F: An ethnocentric MNC puts host-office people in charge of key international management positions.

answer

FALSE

question

T/F: Learning is the acquisition of skills, knowledge and abilities that results in a relatively permanent change in behavior.

answer

TRUE

question

T/F: The primary reason for training overseas managers is to improve their ability to interact effectively with local people in general and their personnel in particular.

answer

TRUE

question

There are four basic sources that MNCs can tap for positions. These are: A. Host-country nationals, third-country nationals, United Nations placements and IMF placements B. Home-country nationals, IMF placements, inpatriates and multipatriates C. Home-country nationals, host-country nationals, IMF placements and multipatriates D. Home-country nationals, host-country nationals, third-country nationals and inpatriates

answer

D. Home-country nationals, host-country nationals, third-country nationals and inpatriates

question

Expatriate managers who are citizens of the country where the multinational corporate is headquartered are referred to as: A. Host-country nationals B. Home-country nationals C. Inpatriates D. Third-country nationals

answer

B. Home-country nationals

question

Headquarters nationals is another term used for: A. Third-country nationals B. Home-country nationals C. Inpatriates D. Host-country nationals

answer

B. Home-country nationals

question

Home-country nationals are frequently called _____, which refers to those who live and work away from their home country. A. Inpatriates B. Third-country nationals C. Expatriates D. Multipatriates

answer

C. Expatriates

question

Historically, MNCs have staffed key positions in their foreign affiliates with: A. Home-country nationals B. Host-country nationals C. Inpatriates D. Third-country nationals

answer

A. Home-country nationals

question

_____ are local managers who are hired by the MNC. A. Inpatriates B. Indigenous-nationals C. Host-country nationals D. Home-country nationals

answer

C. Host-country nationals

question

Which of the following statements about third-country nationals is false? A. TCN managers can often achieve corporate objectives more effectively than do expatriates B. During periods of rapid expansion, TCNs can substitute for expatriates in well-established operations C. During rapid expansion, TCNs can offer different perspectives that can expand on the narrowly focused viewpoints of local nationals D. In joint ventures, TCNs can demonstrate a global image and bring unique cross-cultural skills to the relationship

answer

B. During periods of rapid expansion, TCNs can substitute for expatriates in well-established operations

question

These are managers who are citizens of countries other than the one in which the MNC is headquartered or the one in which they are assigned to work by the MNC. A. Multipatriates B. Home-country nationals C. Inpatriates D. Third-country nationals

answer

D. Third-country nationals

question

An individual from a host-country or a third-country national who is assigned to work in the home country is a(n): A. Expatriate B. Multipatriate C. Inpatriate D. Quasi-patriate

answer

C. Inpatriate

question

Factors used to choose personnel for international assignments are referred to as: A. Global placement criteria B. International selection criteria C. Global selection heuristics D. International recruitment and selection heuristics

answer

B. International selection criteria

question

All of the following are correct with regard to the impact of age, experience and education on expatriate managers except: A. There is universal agreement that degrees in marketing or engineering are the most desirable for expatriate managers B. Most MNCs strive for a balance between age and experience C. Many companies consider an academic degree, preferably a graduate degree, to be of critical importance to an international executive D. There is evidence that younger managers are more eager for international assignments than older managers

answer

A. There is universal agreement that degrees in marketing or engineering are the most desirable for expatriate managers

question

This is the primary language of international business and most expatriates from all countries can converse in it. A. French B. German C. Spanish D. English

answer

D. English

question

Borstorff and her associates examined the factors associated with employee willingness to work overseas and concluded that: A. Married couples with teenage children are probably the most willing to move B. Prior international experience appears associated with willingness to work as an expatriate C. Unmarried employees are least willing, compared to any other group, to accept expat assignments D. Careers and attitudes of spouses have an insignificant impact on employee willingness to move overseas

answer

B. Prior international experience appears associated with willingness to work as an expatriate

question

The process of evaluating how well a family is likely to stand up to the stress of overseas life is referred to as: A. Suitability assessment B. Selection fitness C. Adaptability screening D. Expatriate fitness

answer

C. Adaptability screening

question

The two most common selection procedures used by MNCs are: A. Assessment centers and tests B. References and interviews C. Application forms and assessment centers D. Tests and interviews

answer

D. Tests and interviews

question

In general, some evidence suggests that testing is: A. Extremely popular among MNCs B. Not extremely popular among MNCs C. Used more in the selection of overseas managers than domestic managers D. Used by a high percentage of MNCs in selecting expatriate managers

answer

B. Not extremely popular among MNCs

question

In recent years, international human resources management scholars have developed theoretical models that help to explain the factors involved in effectively adjusting to overseas assignments. These models are called: A. Adjustment models B. Adaptation theorems C. Alignment models D. Congruence theorems

answer

A. Adjustment models

question

There are two major types of adjustments that an expatriate must make when going on an overseas assignment. These are: A. Pre-deployment adjustment and post-deployment adjustment B. Direct adjustment and indirect adjustment C. Anticipatory adjustment and in-country adjustment D. Iterative adjustment and continuous adjustment

answer

C. Anticipatory adjustment and in-country adjustment

question

The adjustment model of the selection procedure for international assignments would include: A. Training and previous experience B. Education and modification C. Work experience and exposure D. Abilities and behavior

answer

A. Training and previous experience

question

The organizational input into anticipatory adjustment is most directly related and concerned with the: A. Motivation process B. Selection process C. Compensation plan D. Quality of leadership

answer

B. Selection process

question

Traditionally, what was the only selection criterion MNCs relied on for overseas assignments? A. Training B. Education C. Previous experience D. Technical competence

answer

B. Education

question

The most common elements in the typical expatriate compensation package include: A. Base salary, benefits, allowances, incentives and taxes B. Base salary, bonuses, stock options and free housing C. Base salary, benefits, free housing and free education for the expatriate's children D. Base salary, benefits, free travel, free housing and taxes

answer

A. Base salary, benefits, allowances, incentives and taxes

question

Expatriate salaries typically are set according to the base pay of: A. An index of 13 firms maintained by the United Nations B. The home country C. The host-country D. A neutral third-country determined by the expatriate and his/her company

answer

B. The home country

question

These are an expensive feature of expatriate compensation packages. A. Base salaries B. Allowances C. Incentives D. Taxes

answer

B. Allowances

question

The benefits of a lump-sum incentive system would include all of the following except: A. One-time payment retaining its value as an incentive B. Cost containment of firm due to one-time payment C. Separate payment distinguishable from regular pay D. Employees being encouraged to be motivated by financial incentives

answer

D. Employees being encouraged to be motivated by financial incentives

question

An approach to developing an expatriate compensation package that is based on ensuring that the expat is "made whole" and does not lose money by taking the assignment is referred to as the: A. Balance-sheet approach B. Lump-sum method C. Localization approach D. Cafeteria approach

answer

A. Balance-sheet approach

question

An approach to developing an expatriate compensation package that involves paying the expat a salary comparable to that of local nationals is referred to as: A. The cafeteria approach B. The balance-sheet approach C. Localization D. The lump-sum method

answer

C. Localization

question

An approach to developing an expatriate compensation package that involves giving the expat a predetermined amount of money and letting the individual make his/her own decisions regarding how to spend it is referred to as the: A. Localization approach B. Cafeteria approach C. Lump-sum method D. Balance-sheet approach

answer

C. Lump-sum method

question

This approach to developing an expatriate compensation package entails giving the individual a series of options and letting the person decide how to spend the available funds. A. Lump-sum method B. Cafeteria approach C. Localization approach D. Balance-sheet approach

answer

B. Cafeteria approach

question

Which of the following approaches is used to develop an expatriate compensation package that involves setting a compensation system for all expats who are assigned to a particular region and paying everyone in accord with that system? A. Regional system B. Balance-sheet approach C. Cafeteria approach D. Lump-sum method

answer

A. Regional system

question

The return to one's home country from an overseas management assignment is referred to as: A. Repatriation B. Reintroduction C. Recruiting D. Reentry

answer

A. Repatriation

question

Strategies used to help smooth the adjustment from an overseas to a stateside assignment are: A. Readjustment strategies B. Transition strategies C. Changeover strategies D. Progression strategies

answer

B. Transition strategies

question

An agreement whereby the firm tells the individual how long she/he will be posted overseas and promises to give the individual, on return, a job that is mutually acceptable is a: A. Strategic plan B. Human resource plan C. Labor-contract agreement D. Repatriation agreement

answer

D. Repatriation agreement

question

This is the process of altering employee behavior and attitudes in a way that increases the probability of goal attainment. A. Organizing B. Planning C. Training D. Controlling

answer

C. Training

question

An individual who is responsible for ensuring that a firm's business systems are in accord with those of the local culture is a(n): A. Cultural integrator B. Global facilitator C. International transition specialist D. Global socialization specialist

answer

A. Cultural integrator

question

The four basic philosophical positions that multinationals can assume and influence a company's training program are: A. Polycentric, geocentric, multicentric and ultracentric B. Ethnocentric, globalcentric, regiocentric and unicentric C. Multicentric, globalcentric, geocentric and unicentric D. Ethnocentric, polycentric, regiocentric and geocentric

answer

D. Ethnocentric, polycentric, regiocentric and geocentric

question

A(n) _____ MNC puts home-office people in charge of key international management positions. A. Ethnocentric B. Polycentric C. Regiocentric D. Geocentric

answer

A. Ethnocentric

question

Which of the following MNCs places local nationals in key positions and allows these managers to appoint and develop their own people? A. Geocentric B. Polycentric C. Regiocentric D. Ethnocentric

answer

B. Polycentric

question

This type of MNC relies on local managers from a particular geographic region to handle operations in and around that area. A. Ethnocentric B. Geocentric C. Polycentric D. Regiocentric

answer

D. Regiocentric

question

This type of MNC seeks to integrate diverse regions of the world through a global approach to decision making. A. Polycentric B. Ethnocentric C. Geocentric D. Regiocentric

answer

C. Geocentric

question

These MNCs do all of their training at their headquarters. A. Geocentric B. Regiocentric C. Polycentric D. Ethnocentric

answer

D. Ethnocentric

question

This is the acquisition of skills, knowledge and abilities that results in a relatively permanent change in behavior. A. Learning B. Development C. Motivation D. Controlling

answer

A. Learning

question

"Learning organizations" continually focus on activities such as: A. Planning and development B. Organizing and controlling C. Training and development D. Planning and organizing

answer

C. Training and development

question

Training programs are useful in preparing people for overseas assignments for many reasons. These reasons can be put into two general categories which are: A. Organizational and personal B. Economic and philosophical C. Personal and impersonal D. Financial and psychological

answer

A. Organizational and personal

question

The belief that one's own way of doing things is superior to that of others is: A. Polycentrism B. Geocentrism C. Ethnocentrism D. Regiocentrism

answer

C. Ethnocentrism

question

This is common in many large MNCs where managers believe that the home office's approach to doing business can be exported intact to all other countries, because this approach is superior to anything at the local level. A. Regiocentrism B. Ethnocentrism C. Geocentrism D. Polycentrism

answer

B. Ethnocentrism

question

Research shows that small firms undertaking international business generally rely on: A. Standard training programs B. Strategic alliances C. Trade zones D. Uniform commercial codes

answer

A. Standard training programs

question

Which of the following training programs are created for the specific needs of the participants? A. Generic B. Standardized C. Tailor-made D. Universal

answer

C. Tailor-made

question

A(n) _____ is a programmed learning technique that is designed to expose members of one culture to some of the basic concepts, attitudes, role perceptions, customs and values of another. A. Cultural assimilator B. Ethnocentric regulator C. Educational regulator D. Developmental assimilator

answer

A. Cultural assimilator

question

Which of the following terms refer to the quality of being effective and producing the desired results? A. Capacity B. Validity C. Reliability D. Stability

answer

B. Validity

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