question

globalization

answer

the shift toward a more integrated and interdependent world economy.

question

industrial goods and services, consumer products

answer

Today's global markets consist largely of_____that really meet world demand;_____ play a secondary role.

question

True

answer

True or False: The Internet and the World Wide Web have enabled enterprises to coordinate and control a globally dispersed production system in a way that was not possible 20 years ago.

question

True

answer

True or False: For approximately the last half century, two important trends have been the rise of non-U.S. multinational firms and the growth of mini-multinational enterprises.

question

Globalization of Markets

answer

the merging of historically distinct and separate national markets into one huge global marketplace.

question

World Trade Organization

answer

The newest of the institutions created by individual nation-states voluntarily and whose functions are established in international treaties is

question

Foreign Direct Investment

answer

a firm invests resources in business activities outside its home country

question

globalization of production

answer

Sourcing of goods and services from locations around the world to take advantage of cost and quality.

question

manage, regulate, and police the global marketplace.

answer

global institutions are needed to help____(3)

question

MNE

answer

Business with productive activities in two or more countries

question

lower prices for goods stimulates economic growth raises the income of customers helps create jobs

answer

Arguments for Globalization (4)

question

destroy manufacturing jobs in developed nations move facilities to less regulated countries shift economic power to organizations such as the EU Gap between rich and poor has increased

answer

Arguments against globalization (4)

question

Doha talks

answer

In late 2001, the WTO launched a round of talks to liberalize trade further by focusing on agricultural issues, cross-border flows of investments and limiting the use of antidumping laws. These stalled talks are named after the location in which they began and are known as:

question

growth of mini-multinationals

answer

Even with the dominance of large, complex organizations in international business, one of the trends today is the ________________________.

question

The adoption of liberal economic policies will likely continue everywhere throughout the world because of their undeniable success.

answer

Which of the following reflects the trends of the global economy in the 21st Century?

question

Collectivism

answer

shapes any political system regardless of democratic or totalitarian governing institutions if the primacy of collective goals over individual goals is the norm.

question

individualism

answer

an individual should have freedom to pursue political or economic ideas

question

productive activities are privately owned goods and services produced aren't planned production is determined by supply and demand

answer

market economy characteristics (3)

question

government plans goods and services that a country produces all businesses are state owned

answer

command economy characteristics (2)

question

certain sectors are publicly or privately owned govt intervenes in businesses for their success

answer

mixed economy characteristics (2)

question

social democrats

answer

In the early twentieth century, socialist ideology split into two broad camps: communists and _____________________.

question

Communist, theocratic, tribal and right-wing.

answer

Totalitarianism is a political system in which one person or political party exercises absolute control and prohibits other political parties. Four types are usually recognized:

question

common law

answer

based on tradition, precedent, and custom

question

civil law

answer

based on a detailed set of laws organized into codes

question

theocratic law

answer

based on religious teachings

question

patent

answer

inventor has exclusive rights to manufacture, sell, and use invention

question

copyrights

answer

exclusive legal rights of authors, playwrights, etc.

question

trademarks

answer

designs and names

question

encourage vigorous free and fair competition between private producers

answer

The role of the government in a market economy is to _____________________.

question

mobilize resources for the public good

answer

The objective of a command economy is to _______________________.

question

intellectual property

answer

products of any intellectual activity

question

ethical issues

answer

Two broad implications for international business arising from the political, economic and legal systems in a country are ______________ and the attractiveness of the country as a market or investment site.

question

Human Development Index (HDI)

answer

_____ to compare the quality of life in nations, using life expectancy, education attainment and whether average incomes meet basic needs of life.

question

Purchasing power parity

answer

adjusting gross domestic product per capita to reflect differences in the cost of living for each country.

question

deregulation

answer

involves removing legal restrictions to the free play of markets, the establishment of private enterprises, and the manner in which private enterprises operate.

question

political risk

answer

is defined as the likelihood that political forces will cause drastic changes in a country's business environment that adversely affect the profit and goals of a business enterprise.

question

first mover advantage

answer

advantage accruing to the first to enter a market

question

culture

answer

values and norms shared among a group of people

question

values

answer

what a society believes to be good, right, and desirable.

question

norms

answer

social rules and guidelines

question

folkways

answer

manners, dress code, neighborly behavior

question

mores

answer

central to the functioning of a society; viewpoints on adultery, theft, etc.

question

nation-states

answer

political creations that may contain a single culture or many cultures.

question

social structure

answer

basic social organization

question

organization is the individual stratified into classes

answer

social structure elements

question

power distance- how you perceive power in a culture individualism vs collectivism- how you think as an individual vs group masculinity vs femininity- gender roles long-term orientation- connection to tradition; fear of change indulgence vs restraint

answer

Hofstede's Dimensions (5)

question

rituals and symbols

answer

Folkways include __________________the most visible manifestations of culture and are the outward expression of deeper values.

question

the value of group identification is very strong

answer

The mobility that can often been shown by American managers is not universal, and this is not the case in countries and cultures where ___________________.

question

class system

answer

is a form of social stratification in which the position of an individual can change his or her position in society through achievement

question

language

answer

The nature of ____________ structures the way we perceive the world and can direct the attention of a society's members to certain features of the world rather than others.

question

use his findings as a starting point to explore how cultures differ and the implications for management practices

answer

As a result of critics of Hofstede's work on a number of different points, managers should:

question

ethnocentrism

answer

is a belief in that one's own ethic group is superior.

question

1. authority (religion, government, parents) Benefits: have to follow consistency easy to control guilt factor on someone else negatives: dominante position can't change 2. rationalization benefits: situation specific changeable negatives: everyone has their version

answer

Two places where ethics come from: write each and explain benefits and negatives of each

question

Ethical dilemma

answer

situations in which alternatives aren't ethically viable

question

Friedman Doctrine

answer

only responsibility of business is to itself

question

cultural relativism

answer

ethics are culturally defined

question

righteous moralist

answer

home country standards are what you follow

question

naive moralist

answer

do what everyone else does

question

friedman doctrine cultural relativism righteous moralist naive moralist

answer

Straw Men Approaches

question

utilitarianism

answer

moral worth of action is determined by consequences

question

rights theory

answer

humans have fundamental right that trumps the fundamental good

question

justice theory

answer

what is fair, just, and right

question

true

answer

True or False: The tragedy of the commons explains how countries and individual companies can indulge in practices such as uncontrolled pollution and over-fishing without being called to account.

question

false

answer

True or False: Power is no more morally neutral than is the use of power.

question

true

answer

True or False: Just as societies have cultures, so do organizations, and the values and norms of the organization have important influences of the ethics of the business's decision making.

question

False

answer

True or False: Neither Utilitarianism nor Kantian ethics can be considered useful today as their development in the 18th and 19th centuries were fundamentally different that the 21st century.

question

True

answer

True or False: Moral courage enables managers to walk away from a decision that is profitable but unethical.

question

they identify with precision the specific benefits of international trade

answer

The great strength of the theories of Smith, Ricardo, and Heckscher-Ohlin is that ___________________ .

question

a country has an absolute advantage when it is more efficient than any other country in producing it.

answer

In 1776, Adam Smith published The Wealth of Nations, in which he argued that:

question

political systems, laws, economic development, and culture vary from nation to nation

answer

Many of the ethical issues in international business are rooted in the fact that ______________________.

question

ethical dilemmas

answer

Real-world decisions that may be complex, difficult to frame and involve consequences that are hard to quantify can cause __________________ for executives in international business.

question

more likely

answer

A recent study of the impact of societal culture and business ethics found that countries where individualism and uncertainty avoidance were _______________ to emphasize the importance of ethics than countries where masculinity and power distance are important attributes.

question

attaining a just distribution of economic goods and services.

answer

Justice theories focus on:

question

Free Trade

answer

situation in which the government doesn't attempt to influence through quotas or duties what its citizens can buy or sell to another country

question

specialize in the manufacture and export, most efficiently, importing products, other countries

answer

International trade allows a country to_____ in the_____ of products that can be produced______ in that country, while_____ that can be produced more efficiently in_____

question

mercantilism

answer

a country should export more than it imports

question

absolute advantage

answer

a country should never produce goods at home that it can buy at a lower cost from other countries

question

comparative advantage

answer

a country should specialize in the production of goods that it produces most efficiently and buy the goods it produces less efficiently from other countries

question

factor endowments

answer

extent to which a country is endowed with resources such as land, labor, and capital

question

product life cycle

answer

when you introduce a product, you sell it domestically, as demand increases, you export to other countries

question

first mover advantage

answer

capture economic of scale ahead of later entrants

question

True

answer

True or False: Despite the shortcomings of the Ricardian model, research suggests that the basic proposition that countries will export goods that they are most efficient at producing is borne out by the data.

question

True

answer

True or False: The Heckscher-Ohlin Theory focuses on "factor endowments" and their variances among nations to explain comparative advantage more empirically.

question

True

answer

True or False: Economies of scale have a number of sources, including the ability to spread fixed costs over a large volume and the ability of large-volume producers to utilize specialized employees and equipment.

question

False

answer

True or False: Porter argues that the presence of all four components of his diamond is unnecessary to boost competitive performance as long as one is extremely well developed.

question

True

answer

True or False: Underlying most of the theories of international trade is the idea that different countries have specific advantages, and a firm that takes advantage of these can develop a global web of productive activities that maximize the potential in different countries.

question

they identify specific benefits of international trade

answer

The great strength of the theories of Smith, Ricardo, and Heckscher-Ohlin is that ___________________ .

question

the Samuelson Critique

answer

An important criticism of the benefits of free trade that focuses on the relationships between richer and poorer economies is known as _____________________.

question

mercantilism

answer

suggests a zero-sum game, which represents a major limitation.

question

national competitive advantage

answer

While most theories of international trade that support unrestricted free trade exclude governments, new trade theory and ______________________ argue for some limited government intervention to support the development of certain export-oriented industries.

question

it makes fewer simplifying assumptions

answer

Most economists prefer the Heckscher-Ohlin theory to Ricardo's theory because ___________________.

question

increase

answer

Under new trade theory, government subsidies could ________________ the chances of its firms becoming first movers in emerging industries.

question

theory of comparative advantage

answer

According to __________________________, it makes sense for a country to specialize in the production of those goods that it produces most efficiently and to buy the goods that it produces less efficiently from other countries, even if this means buying goods from other countries that could produce more efficiently itself.

question

operative restrictions

answer

Michael Porter invented a "diamond" model to show how competitive advantage best works. Which of these is not a component of his diamond model?

question

lobby governments to support each component of the diamond

answer

Since businesses are often prime beneficiaries of free trade, under Porter's theory businesses should:

question

false

answer

true or false: The fall in tariff barriers in recent decades has been matched by an even dramatic reduction in nontariff barriers.

question

false

answer

True or False: Subsidies, which include cash grants, low-interest loans, tax breaks and government equity participation, are made to foreign firms exporting into the country.

question

True

answer

True or False: Strategic trade policy has two components to raise national income - helping firms to capture first-mover advantages and intervening in an industry where foreign firms have already gained a first-mover advantage.

question

True

answer

True or False: Strategic trade policy can create problems by creating a beggar-thy-neighbor policy and by focusing on special interest groups.

question

True

answer

True or False: Because of their pivotal role in international trade, firms can and do exert a strong influence on government policy toward trade.

question

specific

answer

Tariffs are taxes on imports or exports, and fall into two categories: ____________ tariffs and ad valorem tariffs.

question

a quota rent

answer

The extra profit that producers make when supply is artificially limited by an import quota is referred to as ____________________.

question

impose countervailing duties.

answer

When foreign imports flood a domestic market to attract customers or threaten local firms, most governments will:

question

Balancing the federal government budget with increased tariffs

answer

Which of the following is not one of the political arguments for government intervention in international trade?

question

market economy

answer

limit government intervention in economics domestically

question

tariffs sanctions subsidies local content

answer

governments limit trade by: (4 ways)

question

tariffs

answer

a tax levied on imports and exports

question

sanctions

answer

political policies

question

subsidies

answer

a payment made by the government to producers of a good or service, which is intended to lower

question

local content

answer

rules on what can and cannot be sold

question

local economy safety national security retaliation

answer

political arguments for intervention (4)

question

infant industry argument

answer

new industries in developing countries must be temporarily protected from international competition to help them reach a position where they can compete on world markets with the firms of developed nations

question

create inefficient industries with little hope of competing in the world market.

answer

The infant industry argument, which was proposed about 20 years after the publication of The Wealth of Nations, continues to be used today. In case after case where industries were protected by governments using high tariffs, the main effect has been to______

question

politically important groups often exert their influence

answer

Because _________________________, governments do not always act in the national interest when they intervene in the economy.

question

uruguay round

answer

Against a background of increasing pressures for protectionism, in 1986 GATT members embarked on an ambitious, seven-year effort to address a number of problems and eventually create the WTO as part of the effort. This was known as the ____________________.

question

the internet

answer

After the successes of the 1990s, the WTO has struggled to make progress on international trade issues. Which of the following is NOT a source of strains on the WTO?

question

the WTO would like to bring down tariff rates on imports of nonagricultural goods into developed nations.

answer

Although the WTO and the GATT have made great strides in reducing tariff rates on nonagricultural products:

question

Quotas and trade barriers are temporary in nature and make strategic planning difficult.

answer

Which of the following is NOT one of the ways trade barriers constrain a firm's strategy?

question

strategic trade policy

answer

government policy aimed at improving the competitive position of a domestic industry and or domestic firm in the world market

question

dumping

answer

selling goods or services in a foreign market for less than their cost of production or below their fair market value

question

FDI

answer

a firm invests directly in facilities to produce or market a product in a foreign country

question

born global

answer

businesses born in an international country

question

host country

answer

the receiving country

question

home country

answer

the source country

question

exporting

answer

the sale of products produced in one country to residents of another country

question

Licensing

answer

occurs when a firm licenses the right to produce its product, its production processes, or its brand name or trademark to another firm (the licensee); in return for giving the licensee these rights, the licensor collects a royalty fee on every unit the licensee sells

question

first mover advantage access to resources follower- market is in that country

answer

why do companies expand? (3)

question

Dunning's eclectic theory

answer

some combination of ownership, location, and innovation advantage are why you go international

question

radical view theory

answer

no country should ever permit foreign corporations to undertake FDI, because they can never be instruments of economic development, only of economic domination

question

free market view theory

answer

argues that international production should be distributed among countries according to the theory of comparative advantage. FDI is a benefit of both the source country and the host country

question

pragmatic nationalist

answer

FDI has both benefits and costs.

question

resource transfer employment balance of payments competition and economic growth

answer

benefits for host country to encourage FDI (4)

question

competition within the host nation adverse effects on the balance of payments perceived loss of national sovereignty

answer

negatives for host country to encourage FDI (3)

question

valuable skills international relations technology knowledge

answer

benefits for home country of FDI (3)

question

false

answer

true or false: More and more laws and regulations are creating favorable situations for foreign direct investment throughout the world.

question

true

answer

true or false: The United States was been the largest source for FDI from immediately after WWII through the next half century.

question

true

answer

true or false: F.T. Knickerbocker created a theory of oligopolistic firm behaviors whereby the major players are interdependent on one another to enhance mutual success at competitors' expense.

question

True

answer

True or False: "Externalities" is what economists refer to as the knowledge "spillovers" from locating firms near other firms in the same industry due to talent concentrations and informal networks.

question

False

answer

True or False: Licensing is an especially good option for three kinds of industries: high-tech industries with firm-specific expertise, global oligopolies in competitive situations, and industries with intense cost pressures.

question

Greenfield investments can be environmentally challenging.

answer

Which of the following is not a reason why firms would prefer a merger or acquisition instead of a greenfield investment?

question

the eclectic paradigm

answer

Theories explaining why a firm will favor direct investment instead of exporting or licensing, and theories exploring why firms in the same industry often undertake FDI at the same time, are brought together in a theory known as ___________________.

question

pragmatic nationalism

answer

Between the extreme position of hostility to all inward FDI and an adherence to the noninterventionist principle of free market economics is the position known as ____________________.

question

gravitating toward free-market ideas and liberalizing the foreign investment climate

answer

With the exception of a few countries that have adopted a free market policy stance, an increasing number of countries are __________________________.

question

falls soon after but then tends to grow faster than domestic rivals.

answer

Research suggests that when FDI takes the form of an acquisition, employment in the host country:

question

competition increases as a new player enters the market

answer

Host countries often worry that foreign firms might overpower domestic firms, and when the investment is in the form of a greenfield investment, ___________________.

question

Benefits; home

answer

___________ of FDI to the _______ country include the impact of balance of payments from inward flows of foreign earnings, the impact of employment effects with increased demand for products and learning new skills from exposure to foreign markets.

question

Outright purchase of other countries' state-owned industries for privatizing with domestic firms

answer

Which of the following is NOT one of the ways nations can encourage outward FDI?

question

restrict inward FDI

answer

Ownership restraints and performance requirements are two common controls host countries use to:

question

high

answer

From the perspective of a firm negotiating the terms of an investment with a host government, the firms bargaining power is _____ when the host government values what the firm has to offer, the number of alternatives for the firm is greater and the firm has a long time to complete the negotiations.

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