Mgmt 1 Quiz 2 – Flashcards
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Free trade results in a mutually beneficial exchange between and among nations. A.True B.False
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A Trading countries generally benefit from a free trade environment because global trade enables a nation to produce what it is most capable of producing and to buy what it needs from others in a mutually beneficial exchange relationship.
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In any given year, the United States' cash outflow to other nations exceeds its cash inflow from other nations. A.True B.False
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A The U.S. has bought more goods from other nations than it has sold to other nations. Thus it owes more money to other nations than other nations owe the U.S. Its cash outflow exceeds its cash inflow.
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One characteristic of an international joint venture is all parties sharing the risk of a major project. A.True B.False
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A Joint ventures create a partnership in which companies join to undertake a major project. Benefits of international joint ventures are (1) shared technology and risk; (2) shared marketing and management expertise; and (3) entry into markets where foreign companies are often not allowed unless goods are produced locally.
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The Nissan automobile assembly plant in Tennessee is an example of foreign direct investment in the United States. A.True B.False
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A Foreign direct investment in the United States is the buying of permanent property and businesses in the United States like the Nissan automobile plant.
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An example of foreign direct investment would be Pepsi granting a Japanese firm the use of its formula and trademark, for a fee. A.True B.False
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B Licensing allows one firm to manufacture another firm's product and use their trademark for a fee. Foreign direct investment involves the purchase of property in a foreign country.
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Since patent and copyright laws are the same in all nations, they are not of much impact to firms that compete globally. A.True B.False
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B Unfortunately there is no universal set of laws that govern the global market. Companies often must adapt legally market-by-market.
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The principle of mercantilism encouraged nations to keep economics separate from politics. A.True B.False
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B Mercantilism resulted in tariffs, which basically are taxes on imports, thus making imported goods more expensive to buy. This helps to achieve the economic goal of a favorable balance of trade.
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Only large firms have the resources needed to successfully compete in the global environment. A.True B.False
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B Only large firms have the resources needed to successfully compete in the global environment. True False
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The tiny nation of Tinian is extremely efficient in the mining of tin. However, its climate and terrain makes it difficult to produce corn. According to the theory of comparative advantage, Tinian should: A.produce both tin and corn in order to remain self-sufficient. B.watch the global market to see which product is bringing the highest price. C.import the resources needed to produce corn. D.concentrate its production on tin and buy corn from an efficient producer.
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D The theory of comparative advantage contends that a nation should produce and export those goods that it produces efficiently and effectively, and import those goods that other countries produce more efficiently and effectively.
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Many of the toy products sold in the United States are imported from Taiwan because the Taiwanese can produce these products more efficiently than U.S. companies. This is an example of: A.bilateral advantage. B.comparative advantage. C.absolute advantage. D.unilateral advantage.
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B The theory of comparative advantage states that a nation should buy from other countries those products it cannot produce as effectively or efficiently as do those other countries.
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As a business strategy, the strategy behind "dumping" is to __________. A.gain a foothold in a new market B.better utilize e-commerce opportunities C.avoid trade protectionist laws D.achieve eligibility for foreign aid
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A Dumping is sometimes used to unload surplus products in foreign markets or gain a foothold in a new market by offering products for lower prices than domestic competitors do.
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Last year, the nation of Tigerland imported goods totaling $500 million and exported products totaling $386 million. Tigerland experienced a(n): A.unfavorable balance of trade. B.favorable balance of trade. C.trade surplus. D.benefit from membership in a free trade zone.
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A An unfavorable balance of trade occurs when a country's imports exceed its exports.
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For a firm to be considered a multinational corporation, which of the following conditions must be true? A.It must have manufacturing facilities and a physical presence in several countries. B.Its marketing arm must be based at the company's world corporate headquarters. C.Stock ownership must be domestic. D.All transactions must be financed by the International Monetary Fund.
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A A multinational corporation is an organization that does manufacturing and marketing in many different countries; it has multinational stock ownership and multinational management.
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Nike _________________ its products in foreign countries, where labor is cheap and production sites are owned by other companies. This strategy allows Nike to experiment in new markets without incurring large start-up costs involved with building their own production facilities. A.contract franchises B.pays governments to market C.globally licenses D.contract manufactures
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D Contract manufacturing involves the production of private-label goods by a foreign company to which a domestic company then attaches its own brand name or trademark.
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A sociological challenge that must be overcome in order to be successful in the global market is: A.a lack of cultural understanding. B.an overly anxious desire to please at all cost. C.inequality of global natural resources. D.wealth management.
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A Understanding cultural differences is essential to succeed in global trade. Americans have been accused of ethnocentricity, which is an attitude that one's own culture is superior to all others. This type of attitude is a hurdle to be overcome in the global marketplace.
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When studying abroad last year, Blake found that his U.S. dollars did not stretch as far as he had hoped. Each time he exchanged U.S. dollars for euros, he gave up more U.S. dollars in exchange for less euros. The exchange rate indicates: A.the dollar has gained strength against the euro. B.the euro is weak against the U.S. dollar. C.the euro has gained strength against the dollar. D.the demand for dollars is stronger than the demand for euros.
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C A low value of the dollar means a dollar is traded for less foreign currency. This is the case here. A high value of the dollar means a dollar is trading for more foreign currency.
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Legal behavior is directly related to our relationships with others, while ethical behavior is not. A.True B.False
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B Legal behavior and ethical behavior are directly related to our relationships with others.
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While telling an abusive joke about an ethnic group may not be unlawful, it is unethical. A.True B.False
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A Humor at someone else's expense is an example of unfair treatment of others.
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Employers should proceed cautiously when designing an employee incentive program that rewards employees strictly on increased sales. A.True B.False
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A Increased pressure on employees to meet sales quotas can create an environment where management is insensitive to ethical considerations. The text presents an example of this issue with cell phone reps.
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An integrity-based ethics code moves beyond legal compliance in order to create a "do-the-right-thing" climate. A.True B.False
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A An integrity-based ethics code emphasizes ethically sound behavior and shared accountability among employees.
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Defining a socially responsible company is complicated. Businesses differ from other businesses, as well as the people they serve, on what we mean by "socially responsible." A.True B.False
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A The majority of MBA students surveyed said that they would take a lower salary to work for a socially responsible company. But when asked to define a socially responsible company, things got complicated. It appears we want to be socially responsible; we just can't agree on what it involves.
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Laws represent the standards of ________ behavior. A.ethical B.legal C.moral D.socially responsible
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B Laws are written to protect ourselves from fraud, theft, and violence. Ethics go beyond the law. Many immoral and unethical acts are well within the law.
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Purposefully understating your firm's income to avoid paying higher taxes is an example of: A.an accepted business practice. B.tax accountants doing their job. C.illegal behavior. D.a firm's responsibility to its owners.
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C The first standard in business ethics is the legality of the activity. Tax evasion is illegal.
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Ethical behavior will result in which of the following? A.Mistrust between employees and managers. B.Agreements that create benefits for only the shareholders. C.Negative publicity from the news media. D.Improved self-esteem making us feel good about our decision.
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D Decisions that go against our sense of right and wrong make us feel bad-they corrode our self-esteem. Following an ethics-based approach to decision making will result in improved self-esteem.
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When managers disregard ethical concerns, the likely result is: A.a reduction in employee turnover. B.an improvement in overall manager morale. C.a reduction in lawsuits. D.a general mistrust between workers and management.
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D Corporate standards demonstrated by top management impact the values of the rest of the organization. People learn their standards and values from observing others. Any trust and cooperation between workers and managers must be based on fairness, honesty, openness, and moral integrity.
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The Hum-dinger Corporation recently instituted a corporate ethics code. The president of the company realizes that ethical relationships are based on: A.fairness and honesty. B.strict penalties for illegal activities. C.a full-time compliance officer monitoring employee behavior. D.watchdogs and whistleblowers.
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A Ethical relationships with a spirit of trust and cooperation are based on fairness, honesty, openness, and moral integrity.
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A very critical last step in the process of establishing an ethics code is ________. A.middle management support B.training C.enforcement D.identification of the organizational ethics officer
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C Enforcement of the ethics code is critical and timely. When management ignores a written code of ethics, it becomes a worthless, shelf document.
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While speaking with his sales force, the director of sales explains, "Anyone caught violating a sales law will be fired." After studying business ethics, you recognize this remark as a reference to the firm's __________ ethics. A.technology-based B.personal responsibility-based C.compliance-based D.integrity-based
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CA compliance-based ethics code emphasizes the prevention of unlawful behavior by penalizing wrongdoers.
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Business is under pressure from society to be more socially responsible. However, even the strongest advocates for corporate responsibility can't seem to agree: A.on what social responsibility involves. B.who should be policing businesses' behavior. C.if all businesses, large and small, should be held to the same standards. D.if politicians should be held to the same standards of behavior.
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A Society is demanding more ethical and moral leadership from business. However, there is uncertainty as to what being socially responsible involves.
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Some critics of corporate social responsibility view spending money on CSR as: A.a necessary evil. B.stealing from investors. C.important for America. D.moving toward capitalism.
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B CSR critics believe that managers who pursue CSR are doing so with other people's money-money they invested to make more money, not to improve society. They view spending money on CSR activities as stealing from their investors
