Test Bank for International Management Managing Across Borders and Cultures, Text and Cases 10th Edi

International Management, 10e, (Deresky/Miller) Chapter 1 Assessing the Environment: Political, Economic, Legal, Technological 1) Which of the following is characterized by networks of international linkages comprising economic, financial, political and social markets that bind countries, institutions, and people in an interdependent economy?

A) communism B) nationalization C) socialism D) globalization Answer: D Difficulty: 1: Easy Chapter: 1 Skill: Concept LO: 1-1: To understand the global business environment and how it affects the strategic and operational decisions which managers must make AACSB: Application of knowledge 2) The pace of globalization has slowed and, in most instances, declined in part because of .

A) protectionism B) fluctuating exchange rates C) free trade agreements D) cultural differences Answer: A Difficulty: 1: Easy Chapter: 1 Skill: Concept LO: 1-1: To understand the global business environment and how it affects the strategic and operational decisions which managers must make AACSB: Application of knowledge 3) results from the lessening of trade barriers and the increased flow of goods and services, capital, labor, and technology around the world.

A) Economic integration B) Nationalization C) Protectionism D) Mercantilism Answer: A Difficulty: 1: Easy Chapter: 1 Skill: Concept LO: 1-1: To understand the global business environment and how it affects the strategic and operational decisions which managers must make AACSB: Application of knowledge

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4) In which of the following groups of trade blocs does most of today's world trade take place?

A) Middle East, China, and India B) North America, Africa, and Canada C) Western Europe, Asia, and the Americas D) Saudi Arabia, Western Europe, and the Gulf Answer: C Difficulty: 1: Easy Chapter: 1 Skill: Concept LO: 1-1: To understand the global business environment and how it affects the strategic and operational decisions which managers must make AACSB: Application of knowledge 5) The ________ is the simplest and most basic form of regional integration.

A) common market B) political union C) customs union D) free trade area Answer: D Difficulty: 1: Easy Chapter: 1 Skill: Concept LO: 1-1: To understand the global business environment and how it affects the strategic and operational decisions which managers must make AACSB: Application of knowledge 6) Which of the following is an example of a customs union?

A) NAFTA B) ASEAN C) MERCOSUR D) EFTA Answer: C Difficulty: 2: Moderate Chapter: 1 Skill: Concept LO: 1-1: To understand the global business environment and how it affects the strategic and operational decisions which managers must make AACSB: Application of knowledge

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7) Members of ________ allow free trade between members and agree to adopt common tariffs and non-tariff barriers that are applied to imports from nonmember countries.

A) free trade areas B) customs unions C) the USMCA D) the EFTA Answer: B Difficulty: 2: Moderate Chapter: 1 Skill: Concept LO: 1-1: To understand the global business environment and how it affects the strategic and operational decisions which managers must make AACSB: Application of knowledge 8) A formal arrangement between two or more countries to reduce or eliminate tariffs is known as a ________.

A) quota arrangement B) free trade agreement C) memorandum of association D) memorandum of understanding Answer: B Difficulty: 1: Easy Chapter: 1 Skill: Concept LO: 1-1: To understand the global business environment and how it affects the strategic and operational decisions which managers must make AACSB: Application of knowledge 9) Regional economic group is defined as ________.

A) an agreement among countries in a geographic region to reduce and ultimately remove tariff and nontariff barriers to the free flow of goods, services and factors of production between each other B) an agreement among companies in a geographic region to reduce and ultimately remove tariff and nontariff barriers to the free flow of goods, services and factors of production between each other C) an agreement among countries in a geographic region to increase tariff and nontariff barriers to the free flow of goods, services and factors of production between each other D) an agreement among countries in a geographic region to increase tariff and nontariff barriers to the free flow of goods, services and factors of production with nonmember countries Answer: A Difficulty: 2: Moderate Chapter: 1 Skill: Concept LO: 1-1: To understand the global business environment and how it affects the strategic and operational decisions which managers must make AACSB: Application of knowledge 3 .

10) A customs union refers to ________.

A) a group of countries committed to (1) removing all barriers to the free flow of goods and services between each other and (2) the pursuit of a common external trade policy B) a group of countries committed to (1) removing all barriers to the free flow of goods, services and factors of production between each other and the (2) pursuit of a common external trade policy C) a group of countries committed to (1) removing all barriers to the free flow of goods and services between each other but pursuing independent external trade policies D) a group of countries committed to (1) removing all barriers to the free flow of goods, services and factors of production between each other; (2) the adoption of a common currency; (3) the harmonization of tax rates; and the (4) pursuit of a common external trade policy Answer: A Difficulty: 2: Moderate Chapter: 1 Skill: Concept LO: 1-1: To understand the global business environment and how it affects the strategic and operational decisions which managers must make AACSB: Application of knowledge 11) A common market refers to ________.

A) a group of countries committed to (1) removing all barriers to the free flow of goods and services between each other and (2) the pursuit of a common external trade policy B) a group of countries committed to (1) removing all barriers to the free flow of goods, services and factors of production between each other and the (2) pursuit of a common external trade policy C) a group of countries committed to (1) removing all barriers to the free flow of goods and services between each other but pursuing independent external trade policies D) a group of countries committed to (1) removing all barriers to the free flow of goods, services and factors of production between each other; (2) the adoption of a common currency; (3) the harmonization of tax rates; and the (4) pursuit of a common external trade policy Answer: B Difficulty: 2: Moderate Chapter: 1 Skill: Application LO: 1-1: To understand the global business environment and how it affects the strategic and operational decisions which managers must make AACSB: Application of knowledge

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12) Nations pursuing regional integration seek to ________.

A) increase the scale of the marketplace for firms inside the economic bloc B) help firms increase the scale of operations and enhanced productivity C) attract direct investment from outside the bloc D) all of these Answer: D Difficulty: 1: Easy Chapter: 1 Skill: Application LO: 1-1: To understand the global business environment and how it affects the strategic and operational decisions which managers must make AACSB: Application of knowledge 13) Which of the following is a disadvantage of economic integration?

A) trade creation B) loss of sovereignty C) increased voting influence of current members D) easier to get consensus with a large number of member countries Answer: B Difficulty: 1: Easy Chapter: 1 Skill: Application LO: 1-1: To understand the global business environment and how it affects the strategic and operational decisions which managers must make AACSB: Application of knowledge 14) Which of the following is the most likely reason for the establishment of the European Community?

A) broaden the power of communism within East Germany B) create strict tariffs for trade and international business C) commit to the removal of trade barriers between countries D) establish judicial procedures to handle trade violators Answer: C Difficulty: 2: Moderate Chapter: 1 Skill: Application LO: 1-1: To understand the global business environment and how it affects the strategic and operational decisions which managers must make AACSB: Application of knowledge

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15) The European Union consists of how many nations?

A) 12 B) 27 C) 34 D) 46 Answer: B Difficulty: 1: Easy Chapter: 1 Skill: Concept LO: 1-1: To understand the global business environment and how it affects the strategic and operational decisions which managers must make AACSB: Application of knowledge 16) The European Union is classified as a(n) ________.

A) international organization B) regional economic group C) special interest group D) competing firm Answer: B Difficulty: 1: Easy Chapter: 1 Skill: Concept LO: 1-1: To understand the global business environment and how it affects the strategic and operational decisions which managers must make AACSB: Application of knowledge 17) Which of the following is responsible for implementing the decisions of the European Parliament and the European Council?

A) the Council of the European Union B) the European Parliament C) the European Court of Justice D) the European Commission Answer: D Difficulty: 1: Easy Chapter: 1 Skill: Concept LO: 1-1: To understand the global business environment and how it affects the strategic and operational decisions which managers must make AACSB: Application of knowledge

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18) Which of the following is a true statement about China?

A) The Chinese government's shift from communism to capitalism has led to an increase in FDI. B) China attracts FDI because the government has eliminated elaborate bureaucracies.

C) The Chinese government manipulates market activities for political purposes.

D) China lacks an educated pool of employees due to slowly developing industrialization.

Answer: C Difficulty: 3: Challenging Chapter: 1 Skill: Concept LO: 1-1: To understand the global business environment and how it affects the strategic and operational decisions which managers must make AACSB: Application of knowledge 19) Which of the following countries is today known as the world's leader for outsourced backoffice services and, increasingly, for high-tech services?

A) China B) Brazil C) Mexico D) India Answer: D Difficulty: 2: Moderate Chapter: 1 Skill: Concept LO: 1-1: To understand the global business environment and how it affects the strategic and operational decisions which managers must make AACSB: Application of knowledge 20) Which is the fourth largest trading bloc after the EU, USMCA, and ASEAN and established in 1991?

A) SAARC B) ASEAN C) USMCA D) MERCOSUR Answer: D Difficulty: 1: Easy Chapter: 1 Skill: Concept LO: 1-1: To understand the global business environment and how it affects the strategic and operational decisions which managers must make AACSB: Application of knowledge

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21) To which of the following free-trade agreements do Mexico, Canada and the United States all belong?

A) USMCA B) ASEAN C) CAFTA D) MERCOSUR Answer: A Difficulty: 1: Easy Chapter: 1 Skill: Concept LO: 1-1: To understand the global business environment and how it affects the strategic and operational decisions which managers must make AACSB: Application of knowledge 22) ________ is the chance that political forces may change a country's business environment in ways that lead investors to lose some or all of the value of their investment or be forced to accept a lower-than-projected rate of return.

A) Governmental risk B) Operating risk C) Transaction risk D) Political risk Answer: D Difficulty: 2: Moderate Chapter: 1 Skill: Concept LO: 1-2: To develop an appreciation for the ways in which political and economic factors and changes influence the opportunities that companies face AACSB: Application of knowledge 23) Which of the following is NOT a way to deal with political risk?

A) use hedging (for example, local financing) B) create dependency (for example, provide control distribution) C) emphasize adaptation (for example, development assistance) D) use diversion (for example, control all management decisions) Answer: D Difficulty: 1: Easy Chapter: 1 Skill: Application LO: 1-2: To develop an appreciation for the ways in which political and economic factors and changes influence the opportunities that companies face AACSB: Application of knowledge

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24) Which of the following best describes nationalization?

A) outsourcing of governmental functions to private entities B) hiring preferences given to locals rather than expatriates C) government's gradual and subtle actions against a firm D) forced sale of an MNC's assets to local buyers Answer: D Difficulty: 2: Moderate Chapter: 1 Skill: Concept LO: 1-2: To develop an appreciation for the ways in which political and economic factors and changes influence the opportunities that companies face AACSB: Application of knowledge 25) What occurs when a local government seizes and provides inadequate compensation for the foreign-owned assets of a multinational enterprise?

A) trade barrier B) nationalization C) expropriation D) ethnocentrism Answer: C Difficulty: 1: Easy Chapter: 1 Skill: Concept LO: 1-2: To develop an appreciation for the ways in which political and economic factors and changes influence the opportunities that companies face AACSB: Application of knowledge 26) Expropriation is most likely to occur in a country that has ________.

A) numerous MNCs in operation B) constant political upheaval and change C) a capitalistic economic system in place D) stable economic growth and political consistency Answer: B Difficulty: 2: Moderate Chapter: 1 Skill: Concept LO: 1-2: To develop an appreciation for the ways in which political and economic factors and changes influence the opportunities that companies face AACSB: Application of knowledge

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27) The government of Jonovia seizes all assets of Refresh, a world-famous, soft-drink brand in Jonovia, and offers compensation to the company. This action by the government of Jonovia is an example of ________.

A) private action B) repatriation C) privatization D) expropriation Answer: D Difficulty: 2: Moderate Chapter: 1 Skill: Application LO: 1-2: To develop an appreciation for the ways in which political and economic factors and changes influence the opportunities that companies face AACSB: Application of knowledge 28) Which of the following is an example of a macropolitical risk event?

A) a terrorist attack B) forced sale of equity to host-country nationals C) expropriation of corporate assets without prompt and adequate compensation D) barriers to repatriation of funds Answer: A Difficulty: 1: Easy Chapter: 1 Skill: Concept LO: 1-2: To develop an appreciation for the ways in which political and economic factors and changes influence the opportunities that companies face AACSB: Application of knowledge 29) Zagreb Inc., a transnational energy company, negotiates a multimillion-dollar contract with the government to provide electricity to Pilladia. The government is voted out of power shortly after. The new government cancels all contracts it has with all oil companies but not contracts with firms in other industries. This is an example of ________.

A) barriers to repatriation B) protectionism C) confiscation D) micropolitical risk Answer: D Difficulty: 2: Moderate Chapter: 1 Skill: Application LO: 1-2: To develop an appreciation for the ways in which political and economic factors and changes influence the opportunities that companies face AACSB: Analytical thinking

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30) Intelligentia is attempting to do business in Bazania, but the Bazanian government purposely delays granting Intelligentia the necessary licenses and permissions required to conduct business in the country. Which of the following best describes this situation?

A) creeping expropriation B) nationalization C) barriers to repatriation D) confiscation Answer: A Difficulty: 2: Moderate Chapter: 1 Skill: Application LO: 1-2: To develop an appreciation for the ways in which political and economic factors and changes influence the opportunities that companies face AACSB: Application of knowledge 31) Micropolitical risk events are those that affect ________.

A) multiple industries and companies B) several other nations in the same region C) one industry or company or a few companies D) domestic industries or companies Answer: C Difficulty: 1: Easy Chapter: 1 Skill: Concept LO: 1-2: To develop an appreciation for the ways in which political and economic factors and changes influence the opportunities that companies face AACSB: Application of knowledge 32) Recently, the level of ________ in Europe, for example, was a great concern around the world, in particular regarding concerns in the eurozone brought about by debt problems in Greece.

A) legal risk events B) political risk events C) cultural risk events D) economic risk events Answer: D Difficulty: 2: Moderate Chapter: 1 Skill: Concept LO: 1-2: To develop an appreciation for the ways in which political and economic factors and changes influence the opportunities that companies face AACSB: Application of knowledge

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33) Expropriation of corporate assets without prompt and adequate compensation is an example of ________.

A) economic risk B) political risk C) legal risk D) cultural risk Answer: B Difficulty: 2: Moderate Chapter: 1 Skill: Concept LO: 1-2: To develop an appreciation for the ways in which political and economic factors and changes influence the opportunities that companies face AACSB: Application of knowledge 34) Country risk is considered similar to ________.

A) political risk B) commercial risk C) currency risk D) cross-cultural risk Answer: A Difficulty: 2: Moderate Chapter: 1 Skill: Concept LO: 1-2: To develop an appreciation for the ways in which political and economic factors and changes influence the opportunities that companies face AACSB: Application of knowledge 35) For autonomous international subsidiaries, most of the influence from political risks will be in which of the following areas?

A) financial operations B) ownership and control C) marketing and sales operations D) managerial strategy and policy-making Answer: B Difficulty: 2: Moderate Chapter: 1 Skill: Concept LO: 1-2: To develop an appreciation for the ways in which political and economic factors and changes influence the opportunities that companies face AACSB: Application of knowledge

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36) For global corporations, the primary influence of political risks is likely to be on the firm's ________.

A) ownership and control B) hiring and recruiting policies C) transfers of money or products D) managerial strategy and policy-making Answer: C Difficulty: 2: Moderate Chapter: 1 Skill: Concept LO: 1-2: To develop an appreciation for the ways in which political and economic factors and changes influence the opportunities that companies face AACSB: Application of knowledge 37) An individual from a country with a high degree of political risk would most likely be from ________.

A) Canada B) Singapore C) Iraq D) Malaysia Answer: C Difficulty: 2: Moderate Chapter: 1 Skill: Concept LO: 1-2: To develop an appreciation for the ways in which political and economic factors and changes influence the opportunities that companies face AACSB: Application of knowledge 38) An individual from a country with a low degree of political risk would most likely be from ________.

A) Venezuela B) Canada C) Zimbabwe D) Iraq Answer: B Difficulty: 2: Moderate Chapter: 1 Skill: Concept LO: 1-2: To develop an appreciation for the ways in which political and economic factors and changes influence the opportunities that companies face AACSB: Application of knowledge

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39) Which of the following characterizes country risk?

A) The political and legal systems of adjacent nations greatly influence the country risk of nations that host foreign firms.

B) Country risk will change only after the creation of laws and regulations that affect foreign firms.

C) A nation's country risk level remains fairly constant until the election and installation of a new political leader.

D) Country risk is always present, but its nature and intensity vary over time and from country to country.

Answer: D Difficulty: 2: Moderate Chapter: 1 Skill: Concept LO: 1-2: To develop an appreciation for the ways in which political and economic factors and changes influence the opportunities that companies face AACSB: Application of knowledge 40) ________ includes the initiation of joint ventures with nationals (individuals or those in firms, labor unions, or government) to reduce political risks.

A) Development assistance B) Equity sharing C) Localization of the operation D) Participative management Answer: B Difficulty: 2: Moderate Chapter: 1 Skill: Concept LO: 1-2: To develop an appreciation for the ways in which political and economic factors and changes influence the opportunities that companies face AACSB: Application of knowledge 41) Which of the following means of political risk reduction is best suited for firms that decide a high-risk environment is worth the potential returns?

A) avoidance B) adaptation C) hedging D) dependency Answer: B Difficulty: 2: Moderate Chapter: 1 Skill: Concept LO: 1-2: To develop an appreciation for the ways in which political and economic factors and changes influence the opportunities that companies face AACSB: Application of knowledge

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42) Which of the following strategies is a firm most likely to use, if it initiates a joint venture with a local company in a foreign country, as a way of adapting to risk?

A) equity sharing B) participative management C) localization of the operation D) development assistance Answer: A Difficulty: 2: Moderate Chapter: 1 Skill: Concept LO: 1-2: To develop an appreciation for the ways in which political and economic factors and changes influence the opportunities that companies face AACSB: Application of knowledge 43) Which of the following means of adaptation to political risk requires that a firm actively involve nationals in the management of its subsidiary?

A) equity sharing B) participative management C) localization of the operation D) development assistance Answer: B Difficulty: 1: Easy Chapter: 1 Skill: Concept LO: 1-2: To develop an appreciation for the ways in which political and economic factors and changes influence the opportunities that companies face AACSB: Application of knowledge 44) In addition to avoidance and adaptation, two other means of risk reduction available to managers are ________ and ________.

A) qualitative approach; quantitative approach B) dependency; hedging C) localization; development assistance D) equity sharing; participative management Answer: B Difficulty: 2: Moderate Chapter: 1 Skill: Concept LO: 1-2: To develop an appreciation for the ways in which political and economic factors and changes influence the opportunities that companies face AACSB: Application of knowledge

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45) Which of the following is a form of protectionist policies?

A) patents B) quotas C) foreign direct investment D) bribes Answer: B Difficulty: 2: Moderate Chapter: 1 Skill: Concept LO: 1-2: To develop an appreciation for the ways in which political and economic factors and changes influence the opportunities that companies face AACSB: Application of knowledge 46) ________ poses a severe and random political risk to company personnel and assets, and interrupts the conduct of business.

A) Globalization B) Nationalism C) Privatization D) Terrorism Answer: D Difficulty: 2: Moderate Chapter: 1 Skill: Application LO: 1-2: To develop an appreciation for the ways in which political and economic factors and changes influence the opportunities that companies face AACSB: Application of knowledge 47) If a foreign-based firm borrows money from a host country bank as a hedge against being forced out of operation without adequate compensation, the firm is managing political risk with ________.

A) local debt financing B) position control C) development assistance D) adaptation Answer: A Difficulty: 2: Moderate Chapter: 1 Skill: Application LO: 1-2: To develop an appreciation for the ways in which political and economic factors and changes influence the opportunities that companies face AACSB: Application of knowledge

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48) Political risk insurance and local debt financing are both forms of ________.

A) input control B) adaptation C) equity sharing D) hedging Answer: D Difficulty: 3: Challenging Chapter: 1 Skill: Concept LO: 1-2: To develop an appreciation for the ways in which political and economic factors and changes influence the opportunities that companies face AACSB: Application of knowledge 49) Which of the following is a form of hedging?

A) expatriate control in key positions B) development assistance C) local debt financing D) localization of the operation Answer: C Difficulty: 2: Moderate Chapter: 1 Skill: Concept LO: 1-2: To develop an appreciation for the ways in which political and economic factors and changes influence the opportunities that companies face AACSB: Application of knowledge 50) A country's ability or intention to meet its financial obligations determines its ________.

A) technological risk B) legal risk C) political risk D) economic risk Answer: D Difficulty: 3: Challenging Chapter: 1 Skill: Concept LO: 1-2: To develop an appreciation for the ways in which political and economic factors and changes influence the opportunities that companies face AACSB: Application of knowledge

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51) Past court decisions serve as precedents to the interpretation of the law under ________.

A) civil law B) common law C) Sharia law D) contract law Answer: B Difficulty: 1: Easy Chapter: 1 Skill: Concept LO: 1-3: To recognize the role of the legal environment in international business AACSB: Application of knowledge 52) ________ is a legal system which is based on a detailed set of written rules and statutes that constitute a legal code.

A) International law B) Civil law C) Contract law D) Common law Answer: B Difficulty: 1: Easy Chapter: 1 Skill: Concept LO: 1-3: To recognize the role of the legal environment in international business AACSB: Application of knowledge 53) An international agreement which regulates international business by spelling out the rights and obligations of the seller and buyer is known as ________.

A) Agreement to Technical Barriers to Trade B) International Standards on Accounting and Reporting C) General Agreement on Tariffs and Trade D) Contracts for International Sale of Goods Answer: D Difficulty: 1: Easy Chapter: 1 Skill: Concept LO: 1-3: To recognize the role of the legal environment in international business AACSB: Application of knowledge

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54) ________ is based on a comprehensive set of laws organized into a code.

A) Sharia law B) Civil law C) Common law D) Contract law Answer: B Difficulty: 1: Easy Chapter: 1 Skill: Concept LO: 1-3: To recognize the role of the legal environment in international business AACSB: Application of knowledge 55) The U.S. legal system is largely based on ________.

A) common law B) social law C) civil law D) theocratic law Answer: A Difficulty: 1: Easy Chapter: 1 Skill: Concept LO: 1-3: To recognize the role of the legal environment in international business AACSB: Application of knowledge 56) Which of the following terms refers to an agreement by the parties concerned to establish a set of rules for governing a business transaction?

A) charter B) policy C) contract D) license Answer: C Difficulty: 1: Easy Chapter: 1 Skill: Concept LO: 1-3: To recognize the role of the legal environment in international business AACSB: Application of knowledge

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57) Under which law system must the details of the promises be written into a contract in order for it to be enforced?

A) common law B) theocratic law C) civil law D) company law Answer: A Difficulty: 2: Moderate Chapter: 1 Skill: Concept LO: 1-3: To recognize the role of the legal environment in international business AACSB: Application of knowledge 58) A ________ is a right granted to the inventor of a product or process that excludes others from making, using, or selling the invention.

A) patent B) trademark C) watertight D) copyright Answer: A Difficulty: 1: Easy Chapter: 1 Skill: Concept LO: 1-4: To review the technological environment around the world and how it affects the international manager's decisions and operations as well as the war for talent around the globe AACSB: Application of knowledge 59) ________ are words or symbols that distinguish a product and its manufacturer from competitors.

A) Patents B) Trademarks C) Watermarks D) Copyrights Answer: B Difficulty: 1: Easy Chapter: 1 Skill: Concept LO: 1-4: To review the technological environment around the world and how it affects the international manager's decisions and operations as well as the war for talent around the globe AACSB: Application of knowledge

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60) Tiffany's is an American jewelry store which discovers that several shops in developing countries are selling counterfeited necklaces under their name and label. Which of the following problems are they facing?

A) patent expiration B) trademark infringement C) copyright expiration D) monopolization Answer: B Difficulty: 2: Moderate Chapter: 1 Skill: Concept LO: 1-4: To review the technological environment around the world and how it affects the international manager's decisions and operations as well as the war for talent around the globe AACSB: Application of knowledge 61) Which of the following is an example of a trademark infringement?

A) manufacturers who sell different versions of their own products in different countries B) manufacturers who sell counterfeit products under the names and logos of more famous brands C) a company which exports factory rejects to developing countries D) a company which sells products at half the price of their competitors Answer: B Difficulty: 3: Challenging Chapter: 1 Skill: Concept LO: 1-4: To review the technological environment around the world and how it affects the international manager's decisions and operations as well as the war for talent around the globe AACSB: Application of knowledge 62) Which of the following functions does a copyright perform?

A) It protects the trade secrets of an organization, including its business plans.

B) It prevents a company from monopolizing an invention.

C) It distinguishes the product and manufacturers from competitors through distinct words and symbols.

D) It gives creators of original work the freedom to publish or dispose of them as they choose.

Answer: D Difficulty: 3: Challenging Chapter: 1 Skill: Concept LO: 1-4: To review the technological environment around the world and how it affects the international manager's decisions and operations as well as the war for talent around the globe AACSB: Application of knowledge

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63) Which of the following is an advantage of e-business?

A) lower cost of production B) easy availability of technology C) convenience in conducting business worldwide D) increased availability of information Answer: C Difficulty: 2: Moderate Chapter: 1 Skill: Concept LO: 1-4: To review the technological environment around the world and how it affects the international manager's decisions and operations as well as the war for talent around the globe AACSB: Information technology 64) Regional economic groups greatly increase the scale of the marketplace for firms inside the economic bloc.

Answer: TRUE Difficulty: 1: Easy Chapter: 1 Skill: Concept LO: 1-1: To understand the global business environment and how it affects the strategic and operational decisions which managers must make AACSB: Application of knowledge 65) India's economy grows because of its government, whereas China's economy grows in spite of it.

Answer: FALSE Difficulty: 2: Moderate Chapter: 1 Skill: Concept LO: 1-1: To understand the global business environment and how it affects the strategic and operational decisions which managers must make AACSB: Application of knowledge 66) China is now a hybrid market-driven economy—driven by competition, capital, and entrepreneurship.

Answer: TRUE Difficulty: 1: Easy Chapter: 1 Skill: Concept LO: 1-1: To understand the global business environment and how it affects the strategic and operational decisions which managers must make AACSB: Application of knowledge

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67) Small- and medium-sized enterprises contribute to their national economies by creating new jobs.

Answer: TRUE Difficulty: 1: Easy Chapter: 1 Skill: Concept LO: 1-1: To understand the global business environment and how it affects the strategic and operational decisions which managers must make AACSB: Application of knowledge 68) The South Asia Association of Regional Cooperation (SAARC), is a free-trade pact among seven South Asian nations.

Answer: TRUE Difficulty: 1: Easy Chapter: 1 Skill: Concept LO: 1-1: To understand the global business environment and how it affects the strategic and operational decisions which managers must make AACSB: Application of knowledge 69) USMCA is a treaty entered into by Canada, Mexico, and the United States.

Answer: TRUE Difficulty: 1: Easy Chapter: 1 Skill: Application LO: 1-1: To understand the global business environment and how it affects the strategic and operational decisions which managers must make AACSB: Application of knowledge 70) In 2018, the United States, Mexico, and Canada reached an agreement called the United States-Mexico-Canada Agreement (USMCA).

Answer: TRUE Difficulty: 1: Easy Chapter: 1 Skill: Application LO: 1-1: To understand the global business environment and how it affects the strategic and operational decisions which managers must make AACSB: Application of knowledge 71) MERCOSUR is an example of an economic union.

Answer: FALSE Difficulty: 2: Moderate Chapter: 1 Skill: Concept LO: 1-1: To understand the global business environment and how it affects the strategic and operational decisions which managers must make AACSB: Application of knowledge 23 .

72) The level of integration of a customs union is greater than that of a free trade area.

Answer: TRUE Difficulty: 2: Moderate Chapter: 1 Skill: Concept LO: 1-1: To understand the global business environment and how it affects the strategic and operational decisions which managers must make AACSB: Application of knowledge 73) Nationalization describes government seizure of an entire industry, with or without compensation.

Answer: TRUE Difficulty: 1: Easy Chapter: 1 Skill: Concept LO: 1-2: To develop an appreciation for the ways in which political and economic factors and changes influence the opportunities that companies face AACSB: Application of knowledge 74) Confiscation occurs when a local government seizes and provides adequate compensation for the foreign-owned assets of an MNC. Answer: FALSE Difficulty: 1: Easy Chapter: 1 Skill: Concept LO: 1-2: To develop an appreciation for the ways in which political and economic factors and changes influence the opportunities that companies face AACSB: Application of knowledge 75) Confiscation is the seizure of assets without compensation.

Answer: TRUE Difficulty: 1: Easy Chapter: 1 Skill: Concept LO: 1-2: To develop an appreciation for the ways in which political and economic factors and changes influence the opportunities that companies face AACSB: Application of knowledge

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76) Expropriation occurs when a local government seizes and provides compensation for the foreign-owned assets of an MNC. Answer: TRUE Difficulty: 1: Easy Chapter: 1 Skill: Concept LO: 1-2: To develop an appreciation for the ways in which political and economic factors and changes influence the opportunities that companies face AACSB: Application of knowledge 77) Privatization refers to the forced sale of an MNC's assets to local buyers with some compensation to the firm, perhaps leaving a minority ownership with the MNC. Answer: FALSE Difficulty: 2: Moderate Chapter: 1 Skill: Concept LO: 1-2: To develop an appreciation for the ways in which political and economic factors and changes influence the opportunities that companies face AACSB: Application of knowledge 78) The immediate cause of country risk is a legal or political factor.

Answer: TRUE Difficulty: 1: Easy Chapter: 1 Skill: Concept LO: 1-2: To develop an appreciation for the ways in which political and economic factors and changes influence the opportunities that companies face AACSB: Application of knowledge 79) Country risk can be potentially present in all nations.

Answer: TRUE Difficulty: 1: Easy Chapter: 1 Skill: Concept LO: 1-2: To develop an appreciation for the ways in which political and economic factors and changes influence the opportunities that companies face AACSB: Application of knowledge 80) Sustainability—economic, political, social, and environmental—has become a significant worldwide issue.

Answer: TRUE Difficulty: 1: Easy Chapter: 1 Skill: Concept LO: 1-2: To develop an appreciation for the ways in which political and economic factors and changes influence the opportunities that companies face AACSB: Application of knowledge 25 .

81) An event that affects all foreign firms doing business in a country or region is called a micropolitical risk event.

Answer: FALSE Difficulty: 1: Easy Chapter: 1 Skill: Concept LO: 1-2: To develop an appreciation for the ways in which political and economic factors and changes influence the opportunities that companies face AACSB: Application of knowledge 82) An event that affects one industry or company or only a few companies is called a macropolitical risk event.

Answer: FALSE Difficulty: 1: Easy Chapter: 1 Skill: Concept LO: 1-2: To develop an appreciation for the ways in which political and economic factors and changes influence the opportunities that companies face AACSB: Application of knowledge 83) Subsidies can help counterbalance harmful consequences that disproportionately affect the poor.

Answer: TRUE Difficulty: 1: Easy Chapter: 1 Skill: Concept LO: 1-2: To develop an appreciation for the ways in which political and economic factors and changes influence the opportunities that companies face AACSB: Application of knowledge 84) Political risk insurance and local debt financing are forms of dependency.

Answer: FALSE Difficulty: 1: Easy Chapter: 1 Skill: Concept LO: 1-2: To develop an appreciation for the ways in which political and economic factors and changes influence the opportunities that companies face AACSB: Application of knowledge

26 .

85) Under civil law, past court decisions act as precedents to the interpretation of the law and to common custom.

Answer: FALSE Difficulty: 1: Easy Chapter: 1 Skill: Concept LO: 1-3: To recognize the role of the legal environment in international business AACSB: Application of knowledge 86) Islamic law is a reflection of the country's culture, religion, and traditions.

Answer: TRUE Difficulty: 1: Easy Chapter: 1 Skill: Concept LO: 1-3: To recognize the role of the legal environment in international business AACSB: Application of knowledge 87) Under common law, it is assumed a contract reflects promises that will be enforced without specifying the details in the contract.

Answer: FALSE Difficulty: 1: Easy Chapter: 1 Skill: Concept LO: 1-3: To recognize the role of the legal environment in international business AACSB: Application of knowledge 88) A legal contract spells out the rights and obligations of each party and is especially important when relationships go awry. Contract law remains consistent from country to country, and firms must adhere to local standards.

Answer: FALSE Difficulty: 1: Easy Chapter: 1 Skill: Concept LO: 1-3: To recognize the role of the legal environment in international business AACSB: Application of knowledge 89) Developing nations have the toughest product liability laws, while developed countries have more relaxed laws.

Answer: FALSE Difficulty: 2: Moderate Chapter: 1 Skill: Concept LO: 1-3: To recognize the role of the legal environment in international business AACSB: Application of knowledge

27 .

90) Countries seldom impose protectionist policies, such as tariffs and nontariff barriers, quotas, and other import and trade restrictions, to give preference to their own companies and industries.

Answer: FALSE Difficulty: 1: Easy Chapter: 1 Skill: Concept LO: 1-3: To recognize the role of the legal environment in international business AACSB: Application of knowledge 91) Civil law can be more adversarial than common law because civil law relies more on the need to interpret laws according to tradition, precedent, and usage.

Answer: FALSE Difficulty: 1: Easy Chapter: 1 Skill: Concept LO: 1-3: To recognize the role of the legal environment in international business AACSB: Application of knowledge 92) The Internet has had a considerable influence on how companies buy and sell goods.

Answer: TRUE Difficulty: 1: Easy Chapter: 1 Skill: Concept LO: 1-4: To review the technological environment around the world and how it affects the international manager's decisions and operations as well as the war for talent around the globe AACSB: Information technology 93) Communication is the process of transmitting information, and information are facts put in to a form to assist in decision making. In a multinational setting communication is not important.

Answer: FALSE Difficulty: 1: Easy Chapter: 1 Skill: Application LO: 1-5: To explore essential skills for developing your career as a manager in a multinational company AACSB: Application of knowledge 94) Critical thinking refers to the purpose-driven and goal oriented thinking that helps identify and solve problems, make decisions, and critique actions.

Answer: TRUE Difficulty: 1: Easy Chapter: 1 Skill: Application LO: 1-5: To explore essential skills for developing your career as a manager in a multinational company AACSB: Application of knowledge 28 .

95) Collaborative learning occurs when individuals work independently on projects, tasks, and problem solving.

Answer: FALSE Difficulty: 1: Easy Chapter: 1 Skill: Application LO: 1-5: To explore essential skills for developing your career as a manager in a multinational company AACSB: Application of knowledge 96) Knowledge application and analysis refers to the ability to learn particular concepts and frameworks and then apply them in various situations.

Answer: TRUE Difficulty: 1: Easy Chapter: 1 Skill: Application LO: 1-5: To explore essential skills for developing your career as a manager in a multinational company AACSB: Application of knowledge 97) Corporate Social Responsibility (CSR) refers to actions taken by a company that goes beyond that of maximizing profits.

Answer: TRUE Difficulty: 1: Easy Chapter: 1 Skill: Application LO: 1-5: To explore essential skills for developing your career as a manager in a multinational company AACSB: Application of knowledge 98) Business ethics are sets of moral principles that shape individual or organizational behavior within organizations.

Answer: TRUE Difficulty: 1: Easy Chapter: 1 Skill: Application LO: 1-5: To explore essential skills for developing your career as a manager in a multinational company AACSB: Application of knowledge

29 .

99) What is the European Union (EU)? Discuss how the EU affects both Europe and international managers working in Europe.

Answer: The EU now comprises a 27-nation, unified market of over 400 million people. Since the euro became a legally tradable currency, Europe's business environment has been transformed. The vast majority of legislative measures have been adopted to create an internal market with free movement of goods and people among the EU countries. The elimination of internal tariffs and customs, as well as financial and commercial barriers, has not eliminated national pride.

Global managers face two major tasks in the EU. One is strategic: how firms outside of Europe can deal with the implications of the EU and of what some have called a "Fortress Europe"–that is, a market giving preference to insiders. The other task is cultural: how to deal effectively with multiple sets of national cultures, traditions, and customs within Europe, such as differing attitudes about how much time should be spent on work versus leisure activities.

Difficulty: 3: Challenging Chapter: 1 Skill: Concept LO: 1-1: To understand the global business environment and how it affects the strategic and operational decisions which managers must make AACSB: Application of knowledge 100) What is SAARC? Answer: SAARC stands for South Asia Association of Regional Cooperation–an association of seven developing South Asian nations. According to the Agreement that was effective January 1, 2006, the countries will lower tariffs by 25% within three to five years and eliminate them within seven years. Trade in South Asia is estimated at $14 billion, although the majority of that trade will take place between India and Pakistan, the two largest members.

Difficulty: 2: Moderate Chapter: 1 Skill: Concept LO: 1-1: To understand the global business environment and how it affects the strategic and operational decisions which managers must make AACSB: Application of knowledge 101) What is CAFTA-DR? Answer: The Dominican Republic-Central America FTA (CAFTA-DR) is the first free-trade agreement between the United States and Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, and the Dominican Republic. Collectively, the CAFTA member countries represent the 16th largest U.S. goods trading partner. Trade between the United States and the six CAFTADR partners has increased more than 71 percent since inception, from $35 billion in 2005 to $60 billion in 2013. However, U.S.-CAFTA trade dropped to $53 billion in 2015. (U.S. exports to the CAFTA-DR countries totaled $29 billion; imports totaled $24 billion.)

Difficulty: 2: Moderate Chapter: 1 Skill: Concept LO: 1-1: To understand the global business environment and how it affects the strategic and operational decisions which managers must make AACSB: Application of knowledge 30 .

102) How does the phenomenon of ethnicity affect the international manager?

Answer: Ethnicity is a driving force of political instability around the world. Many uprisings and conflicts are expressions of differences in ethnic groupings, and religious disputes often lie at the heart of those differences. Managers must understand the ethnic and religious composition of the host country in order to anticipate problems of general instability as well as those of an operational nature—such as effects on their workforce, on production and access to raw materials, and also the market as a whole.

Difficulty: 2: Moderate Chapter: 1 Skill: Concept LO: 1-2: To develop an appreciation for the ways in which political and economic factors and changes influence the opportunities that companies face AACSB: Reflective thinking 103) What is political risk? Give an example of how political risk can affect an MNC. Answer: Political risks are any government action or politically motivated event that could adversely affect the long-run profitability or value of the firm. For example, Bolivia nationalized its natural gas industry ordering foreign companies to give up control of fields and accept much tougher operating terms within six months or leave the country.

Difficulty: 2: Moderate Chapter: 1 Skill: Concept LO: 1-2: To develop an appreciation for the ways in which political and economic factors and changes influence the opportunities that companies face AACSB: Application of knowledge 104) Describe how the political and legal systems of a host country can both harm and benefit a foreign firm.

Answer: The political and legal systems of a host country can be both beneficial and harmful to a foreign firm. Firms can benefit from preferential subsidies, government incentives, and protection from competition that reduce business costs and influences strategic decision making.

Numerous governments encourage local MNE investment by offering tax holidays and cash incentives to employ local workers.

On the other hand, political or legislative actions can harm business interests. Laws may be unexpectedly strict or result in unintended consequences. Many laws favor host-country interests, that is, interests in foreign countries where the firm has direct operations.

Difficulty: 2: Moderate Chapter: 1 Skill: Concept LO: 1-2: To develop an appreciation for the ways in which political and economic factors and changes influence the opportunities that companies face AACSB: Application of knowledge

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105) Describe country risk and discuss how political and legal systems contribute to country risk.

Explain the differences between political systems and legal systems in your answer.

Answer: Country risk is exposure to potential loss or adverse effects on company operations and profitability caused by developments in a country's political and/or legal environments. Also referred to as political risk, it is one of four major types of international business risks. While the immediate cause of country risk is a political or legal factor, underlying such factors may be economic, social, or technological developments. Government intervention, protectionism, and barriers to trade and investment are particularly notable in international business.

Mismanagement or failure of the national economy can lead to financial crises, recessions, market downturns, currency crises, and inflation. Such events usually arise from business cycles, poor monetary or fiscal policies, a defective regulatory environment, or imbalances in the underlying economic fundamentals of the host country.

Political or legislative actions can inadvertently harm business interests, such as laws that are unexpectedly strict or result in unintended consequences. Many laws favor host-country interests-that is, interests in foreign countries where the firm has direct operations.

A political system is a set of formal institutions that constitute a government. It includes legislative bodies, political parties, lobbying groups, and trade unions. The principal functions of a political system are to provide protection from external threats, establish stability based on laws, and govern the allocation of valued resources among the members of a society. A political system also defines how these groups interact with each other.

Each country's political system is unique, having evolved within a particular historical, economic, and cultural context. Political systems are also constantly evolving in response to constituent demands and the evolution of the national and international environment.

Constituents are the people and organizations that support the political system and receive government resources.

A legal system is a system for interpreting and enforcing laws. Laws, regulations, and rules establish norms for conduct. A legal system incorporates institutions and procedures for ensuring order and resolving disputes in commercial activities, as well as taxing economic output and protecting intellectual property and other company assets. Political and legal systems are dynamic and constantly changing. The two systems are interdependent-changes in one affect the other. Adverse developments in political and legal systems give rise to country risk. They can result from installation of a new government, shifting values or priorities in political parties, initiatives developed by special interest groups, and the creation of new laws or regulations.

Gradual change is easier for the firm to accommodate, while sudden change is harder to deal with and poses greater risk to the firm.

Unfavorable developments give rise to new conditions that may threaten the firm's products, services, or business activities. For example, a new import tariff may increase the cost of a key component used to manufacture a product. A modification in labor law may alter the hours the firm's employees are allowed to work. The installation of a new political leader may lead to government takeover of corporate assets.

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Country risk is always present, but its nature and intensity vary over time and from country to country.

Difficulty: 3: Challenging Chapter: 1 Skill: Concept LO: 1-2: To develop an appreciation for the ways in which political and economic factors and changes influence the opportunities that companies face AACSB: Application of knowledge 106) Identify and describe four means of political risk adaptation.

Answer: The four means of political risk adaptation are: (1) equity sharing—shared ownership or partial ownership with nationals; (2) participative management—actively involving nationals in the management of the firm; (3) localization of operations—modifications to the company's management style, company name, etc., to accommodate national issues; and (4) development assistance—corporate aid for infrastructure development.

Difficulty: 3: Challenging Chapter: 1 Skill: Concept LO: 1-2: To develop an appreciation for the ways in which political and economic factors and changes influence the opportunities that companies face AACSB: Application of knowledge 107) What is currency translation exposure? Provide an example to illustrate your answer.

Answer: The risk of exchange-rate volatility results in currency translation exposure to the firm when the balance sheet of the entire corporation is consolidated, and may cause a negative cash flow from the foreign subsidiary. Currency translation exposure occurs when the value of one country's currency changes relative to that of another. When exchange-rate changes are radical, repercussions are felt around the world. For example, a U.S. company operating in Mexico at the time of the peso devaluation in the late 1990s meant that the company's assets in that country were worth less when translated into U.S. dollars. The company's liabilities, however, were also less.

Difficulty: 3: Challenging Chapter: 1 Skill: Concept LO: 1-2: To develop an appreciation for the ways in which political and economic factors and changes influence the opportunities that companies face AACSB: Application of knowledge

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108) What is the difference between common law, Islamic law, and civil law?

Answer: In common law, past court decisions act as precedents to the interpretation of law.

Civil law is based on a comprehensive set of laws organized into a code. Interpretations of civil law are based on reference to codes and statutes. In Islamic countries, such as Saudi Arabia, the dominant legal system is Islamic law; based on religious beliefs; it dominates all aspects of life.

Islamic law is followed in approximately 27 countries and combines, in varying degrees, civil, common, and indigenous law.

Difficulty: 2: Moderate Chapter: 1 Skill: Concept LO: 1-3: To recognize the role of the legal environment in international business AACSB: Application of knowledge 109) What methods are used by MNCs to protect intellectual property rights?

Answer: The most common methods of protecting proprietary technology are the use of patents, trademarks, trade names, copyrights, and trade secrets. Various international conventions afford some protection in participating countries; more than 80 countries adhere to the International Convention for the Protection of Industrial Property, often referred to as the Paris Union, for the protection of patents. However, restrictions and differences in the rules in some countries not signatory to the Paris Union, as well as industrial espionage, pose continuing problems for firms trying to protect their technology.

Difficulty: 2: Moderate Chapter: 1 Skill: Concept LO: 1-3: To recognize the role of the legal environment in international business AACSB: Application of knowledge 110) What is globalization? What is the relationship between globalization and information technology?

Answer: Globalization is defined as global competition characterized by networks of international linkages that bind countries, institutions, and people in an interdependent global economy. Information technology, more than anything else, is making those networks of international linkages more possible by boosting the efficiency of that "connectedness." The Internet is propelling electronic commerce around the world. Companies around the world are linked electronically with employees, customers, distributors, suppliers, and alliance partners in many countries making the world a global marketplace.

Difficulty: 3: Challenging Chapter: 1 Skill: Concept LO: 1-4: To review the technological environment around the world and how it affects the international manager's decisions and operations as well as the war for talent around the globe AACSB: Application of knowledge

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111) How does the Internet facilitate both e-commerce and business-to-business transactions?

Answer: The Internet and e-business provide a number of uses and advantages in business-toconsumer transactions: (1) convenience in conducting business worldwide—facilitating communication across borders contributes to the shift toward globalization and a global market; (2) an electronic meeting and trading place, which adds efficiency in conducting business sales; (3) a corporate Intranet service, merging internal and external information for enterprises worldwide; (4) power to consumers as they gain access to limitless options and price differentials; and (5) a link and efficiency in distribution. Although most early attention was on e-commerce, experts now believe the real opportunities are in business-to-business (B2D) transactions where the Internet offers assistance with supply chain, procurement, and distribution channels.

Difficulty: 3: Challenging Chapter: 1 Skill: Concept LO: 1-4: To review the technological environment around the world and how it affects the international manager's decisions and operations as well as the war for talent around the globe AACSB: Information technology 112) What are some of the effects of various forms of technology have on international business?

Answer: The rapid advancement in Information Technology will continue to have a transformative effect on global business in all areas and businesses of all sizes. The speed and accuracy of information transmission are changing the nature of the global manager's job by making geographic barriers less relevant. Managers from around the world are recognizing the necessity of being able to access Information Technology.

Difficulty: 1: Easy Chapter: 1 Skill: Concept LO: 1-4: To review the technological environment around the world and how it affects the international manager's decisions and operations as well as the war for talent around the globe AACSB: Information technology 113) What is the meaning of the appropriateness of technology?

Answer: It involves the studying of the possible cultural consequences of the transfer of technology, requiring managers to assess whether the local people are ready and willing to change their values, expectations, and behaviors on the job to use new technological methods, whether applied to production, research, marketing, finance, or some other aspect of the business.

Difficulty: 1: Easy Chapter: 1 Skill: Concept LO: 1-4: To review the technological environment around the world and how it affects the international manager's decisions and operations as well as the war for talent around the globe AACSB: Information technology

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114) What are the critical skills that will be needed by an individual involved in international business?

Answer: If you are an employee or someone planning to work in a multinational company or work for a company in another country, you need to develop five critical employability skills: (1) communication, (2) critical thinking, (3) collaboration, (4) knowledge application/analysis, and (5) business ethics/social responsibility.

Difficulty: 2: Moderate Chapter: 1 Skill: Application LO: 1-5: To explore essential skills for developing your career as a manager in a multinational company AACSB: Application of knowledge

36 .

International Management, 10e, (Deresky/Miller) Chapter 2 Managing Interdependence, Social Responsibility, and Ethics 1) In recent years, which of the following has lessened the criticisms of MNCs? A) increasing economic differences among countries B) greater emphasis on social responsibility by MNCs C) limited emphasis on social responsibility and ethical behavior D) dissolution of MNCs in developing countries Answer: B Difficulty: 2: Moderate Chapter: 2 Skill: Concept LO: 2-1: To understand the social responsibility of corporations toward their various constituencies around the world in particular their responsibilities toward human rights AACSB: Ethical understanding and reasoning 2) Corporate social responsibility is defined as ________.

A) actions that further some social good, and that are in compliance with the law B) actions that appear to further some social good, beyond the interests of the firm and that which is required by law C) actions outside the firm's home country that appear to further some social good, that are in compliance with home country law D) actions that appear to further some economic good, beyond the interests of the firm and that which is required by law Answer: B Difficulty: 1: Easy Chapter: 2 Skill: Application LO: 2-1: To understand the social responsibility of corporations toward their various constituencies around the world in particular their responsibilities toward human rights AACSB: Application of knowledge 3) Which of the following concepts includes the expectation that MNCs should be concerned with the social and economic effects of their decisions?

A) macropolitical interdependence B) international social responsibility C) ethical behavior D) shared value Answer: B Difficulty: 1: Easy Chapter: 2 Skill: Concept LO: 2-1: To understand the social responsibility of corporations toward their various constituencies around the world in particular their responsibilities toward human rights AACSB: Ethical understanding and reasoning

1 .

4) Which of the following significantly increases the complexity of social responsibility and ethical behavior of MNCs? A) distance between the headquarters and the subsidiaries B) difficulties posed in training managers from different cultures C) additional stakeholders associated with the firm's activities D) international laws, regulations, and moral principles Answer: C Difficulty: 3: Challenging Chapter: 2 Skill: Concept LO: 2-1: To understand the social responsibility of corporations toward their various constituencies around the world in particular their responsibilities toward human rights AACSB: Ethical understanding and reasoning 5) Manuela Weber suggested which of the following is considered a benefit of corporate social responsibility?

A) Increased coordination B) International diversification C) Enhanced configuration D) Improved employee recruitment, motivation, and retention Answer: D Difficulty: 1: Easy Chapter: 2 Skill: Application LO: 2-1: To understand the social responsibility of corporations toward their various constituencies around the world in particular their responsibilities toward human rights AACSB: Application of knowledge 6) In a world ever sensitive to social and environmental issues, more and more firms are embracing CSR and sustainability. Such firms are more likely than not to ________.

A) develop closer relations with foreign stakeholders to better understand their needs and work jointly toward solutions B) minimize their contribution to the local community in order to maximize profits C) be reluctant to hire managers from around the world D) favor region-specific CSR standards to global CSR standards for foreign operations Answer: A Difficulty: 2: Moderate Chapter: 2 Skill: Application LO: 2-1: To understand the social responsibility of corporations toward their various constituencies around the world in particular their responsibilities toward human rights AACSB: Application of knowledge

2 .

7) Acme Medical, an American medical device company, opened a number of manufacturing units in a developing country. It employed people from the host country to work in the new units.

This move radically lowered the poverty rate in the developing country. In this scenario, Acme is ________.

A) making questionable payments B) following moral guidelines C) making a foreign investment D) adopting local customs Answer: C Difficulty: 3: Challenging Chapter: 2 Skill: Application LO: 2-1: To understand the social responsibility of corporations toward their various constituencies around the world in particular their responsibilities toward human rights AACSB: Analytical thinking 8) The Anti-Sweatshop Code of Conduct requires companies to provide a healthy and safe work environment and ________.

A) to differentiate on the basis of gender B) to pay the prevailing local minimum wage C) to reduce environmental footprints D) to employ forced labor when the situation demands it Answer: B Difficulty: 2: Moderate Chapter: 2 Skill: Concept LO: 2-1: To understand the social responsibility of corporations toward their various constituencies around the world in particular their responsibilities toward human rights AACSB: Ethical understanding and reasoning 9) Which of the following behaviors of a firm can be called unethical?

A) setting up operations abroad B) manufacturing luxury consumer goods C) tolerating sweatshop conditions D) failing to meet shareholders' expectations with regard to annual profit Answer: C Difficulty: 2: Moderate Chapter: 2 Skill: Concept LO: 2-1: To understand the social responsibility of corporations toward their various constituencies around the world in particular their responsibilities toward human rights AACSB: Ethical understanding and reasoning

3 .

10) Social responsibility, ethical behavior, and interdependence are important concerns to be built into ________.

A) economic control B) management control C) corporate sustainability D) moral idealism Answer: B Difficulty: 2: Moderate Chapter: 2 Skill: Concept LO: 2-1: To understand the social responsibility of corporations toward their various constituencies around the world in particular their responsibilities toward human rights AACSB: Ethical understanding and reasoning 11) Which of the following is a business benefit from corporate social responsibility?

A) revenue decreases B) cost increases C) increase in brand value D) risk assessment Answer: C Difficulty: 2: Moderate Chapter: 2 Skill: Concept LO: 2-1: To understand the social responsibility of corporations toward their various constituencies around the world in particular their responsibilities toward human rights AACSB: Ethical understanding and reasoning 12) Which of the following terms refers to an integration of the business environments in which firms currently operate, resulting from a dissolution of traditional boundaries and from increasing links among MNCs? A) social responsibility B) global corporate culture C) corporate philanthropy D) moral universalism Answer: B Difficulty: 1: Easy Chapter: 2 Skill: Concept LO: 2-1: To understand the social responsibility of corporations toward their various constituencies around the world in particular their responsibilities toward human rights AACSB: Application of knowledge

4 .

13) Moral universalism is the need for a moral standard that is accepted by all ________.

A) corporations B) governments C) cultures D) employees Answer: C Difficulty: 1: Easy Chapter: 2 Skill: Concept LO: 2-1: To understand the social responsibility of corporations toward their various constituencies around the world in particular their responsibilities toward human rights AACSB: Ethical understanding and reasoning 14) ________ are moral principles and values that govern the behavior of people, firms, and governments, regarding right and wrong.

A) Attitudes B) Ethics C) Laws D) Biases Answer: B Difficulty: 1: Easy Chapter: 2 Skill: Application LO: 2-2: To acknowledge the strategic role that ethics must play in global management and provide guidance to managers to maintain ethical behavior amid the varying standards and practices around the world AACSB: Application of knowledge 15) Firms with a strong social interest ________.

A) openly support the use of sweatshops B) aim to optimize work conditions and diversity in hiring C) are reluctant to provide health insurance to employees D) engage in deceptive marketing Answer: B Difficulty: 2: Moderate Chapter: 2 Skill: Concept LO: 2-2: To acknowledge the strategic role that ethics must play in global management and provide guidance to managers to maintain ethical behavior amid the varying standards and practices around the world AACSB: Ethical understanding and reasoning

5 .

16) With an ethnocentric approach, a company applies the morality used in its ________.

A) host nation B) industry C) general society D) home country Answer: D Difficulty: 1: Easy Chapter: 2 Skill: Concept LO: 2-2: To acknowledge the strategic role that ethics must play in global management and provide guidance to managers to maintain ethical behavior amid the varying standards and practices around the world AACSB: Ethical understanding and reasoning 17) Which of the following organizations must comply with the Foreign Corrupt Practices Act (FCPA) of 1977?

A) U.S. multinational corporations B) Foreign subsidiaries of U.S. multinational corporations C) Foreign firms that are cross-listed in the USA D) All of these Answer: D Difficulty: 2: Moderate Chapter: 2 Skill: Application LO: 2-2: To acknowledge the strategic role that ethics must play in global management and provide guidance to managers to maintain ethical behavior amid the varying standards and practices around the world AACSB: Application of knowledge 18) McDonald's, a fast-food chain headquartered in the United States, applies the morality it practices in the United States to all foreign countries in which it operates. McDonald's is adhering to ________.

A) moral universalism B) ethical relativism C) ethnocentrism D) global corporate culture Answer: C Difficulty: 2: Moderate Chapter: 2 Skill: Application LO: 2-2: To acknowledge the strategic role that ethics must play in global management and provide guidance to managers to maintain ethical behavior amid the varying standards and practices around the world AACSB: Analytical thinking

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19) A company subscribing to ethical relativism would implement the morality of the ________.

A) host country B) shareholders C) legal system D) home country Answer: A Difficulty: 2: Moderate Chapter: 2 Skill: Concept LO: 2-2: To acknowledge the strategic role that ethics must play in global management and provide guidance to managers to maintain ethical behavior amid the varying standards and practices around the world AACSB: Ethical understanding and reasoning 20) Which of the following often forces the MNC to act in accordance with ethnocentric value systems?

A) moral universalism B) environmental policies in the home country C) public pressure in the home country D) media pressure Answer: C Difficulty: 2: Moderate Chapter: 2 Skill: Concept LO: 2-2: To acknowledge the strategic role that ethics must play in global management and provide guidance to managers to maintain ethical behavior amid the varying standards and practices around the world AACSB: Application of knowledge 21) Creating Shared Value (CSV) creates ________.

A) economic value by creating shared value B) social value by increasing shared value C) economic value by creating social value D) social value by increasing market value Answer: C Difficulty: 1: Easy Chapter: 2 Skill: Concept LO: 2-2: To acknowledge the strategic role that ethics must play in global management and provide guidance to managers to maintain ethical behavior amid the varying standards and practices around the world AACSB: Application of knowledge

7 .

22) Which of the following creates shared value?

A) creating social value by creating economic value B) disabling local cluster development C) reconceiving products and markets D) creating economic value by creating social value Answer: C Difficulty: 2: Moderate Chapter: 2 Skill: Concept LO: 2-2: To acknowledge the strategic role that ethics must play in global management and provide guidance to managers to maintain ethical behavior amid the varying standards and practices around the world AACSB: Application of knowledge 23) Which of the following is a policy of the Electronic Industry Code of Conduct (EICC)?

A) Excessive overtime can be propagated if it benefits the company.

B) Child labor can be allowed when there is a shortage of employees.

C) Contract manufacturers should follow some basic environmental requirements.

D) Factory inspection should be limited to the headquarters.

Answer: C Difficulty: 2: Moderate Chapter: 2 Skill: Concept LO: 2-2: To acknowledge the strategic role that ethics must play in global management and provide guidance to managers to maintain ethical behavior amid the varying standards and practices around the world AACSB: Ethical understanding and reasoning 24) Primo is a multinational enterprise based in California that manufactures and sells affordably priced athletic shoes in retail stores around the world. A Primo manufacturing subsidiary in China employs over 20,000 locals. Primo executives recently learned of human rights violations at the firm's China subsidiary. Workers had been forced to work more than 60 hours each week and minimum wage laws were regularly ignored. As a result, Primo executives need to decide if operations in China should be discontinued. Which of the following, if true, would best support a decision by Primo to remain in China?

A) Primo becomes SA8000 certified.

B) Sales of Primo's competitors drop sharply.

C) U.S. manufacturing jobs decrease in number.

D) More service sector jobs become available in China.

Answer: A Difficulty: 3: Challenging Chapter: 2 Skill: Application LO: 2-2: To acknowledge the strategic role that ethics must play in global management and provide guidance to managers to maintain ethical behavior amid the varying standards and practices around the world AACSB: Analytical thinking 8 .

25) Which of the following is one of the standards of SA8000?

A) reducing environmental footprints B) providing a safe work environment C) not allowing workers to unionize D) regularly require more than 48-hour workweeks Answer: B Difficulty: 3: Challenging Chapter: 2 Skill: Concept LO: 2-2: To acknowledge the strategic role that ethics must play in global management and provide guidance to managers to maintain ethical behavior amid the varying standards and practices around the world AACSB: Ethical understanding and reasoning 26) Transparency International is best described as a(n) ________.

A) international committee that monitors electronic data privacy laws B) nongovernmental organization that fights corruption C) nonprofit organization that argues for workplace equality D) nonprofit group that raises awareness about human rights violations Answer: B Difficulty: 3: Challenging Chapter: 2 Skill: Concept LO: 2-2: To acknowledge the strategic role that ethics must play in global management and provide guidance to managers to maintain ethical behavior amid the varying standards and practices around the world AACSB: Ethical understanding and reasoning 27) Which of the following is a primary focus of the research that is carried out by Transparency International?

A) relative prevalence of bribery in various spheres of people's lives B) existence of child labor in various developing countries C) relative prevalence of dictatorship in various countries D) existence of bonded labor in various countries Answer: A Difficulty: 3: Challenging Chapter: 2 Skill: Concept LO: 2-2: To acknowledge the strategic role that ethics must play in global management and provide guidance to managers to maintain ethical behavior amid the varying standards and practices around the world AACSB: Ethical understanding and reasoning

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28) Which of the following is considered the primary problem for MNCs attempting to define their corporate-wide ethics?

A) inconsistencies among international laws B) variations in ethical standards around the world C) corruption within legal organizations D) differences in worldwide religions Answer: B Difficulty: 3: Challenging Chapter: 2 Skill: Concept LO: 2-2: To acknowledge the strategic role that ethics must play in global management and provide guidance to managers to maintain ethical behavior amid the varying standards and practices around the world AACSB: Ethical understanding and reasoning 29) Which of the following is dedicated to monitoring issues of data privacy in Europe?

A) the Telecommunications Data Protection directive B) the EU Data Retention Directive C) the EU Directive on Data Protection D) the Privacy and Electronic Communications EC Directive Answer: C Difficulty: 3: Challenging Chapter: 2 Skill: Concept LO: 2-2: To acknowledge the strategic role that ethics must play in global management and provide guidance to managers to maintain ethical behavior amid the varying standards and practices around the world AACSB: Ethical understanding and reasoning 30) Payments to expedite routine transactions are often referred to as ________.

A) slotting fees B) grease money C) gray funds D) expropriation Answer: B Difficulty: 1: Easy Chapter: 2 Skill: Concept LO: 2-2: To acknowledge the strategic role that ethics must play in global management and provide guidance to managers to maintain ethical behavior amid the varying standards and practices around the world AACSB: Ethical understanding and reasoning

10 .

31) Tokens of appreciation and grease money are considered ________.

A) cultural reward systems B) questionable payments C) sales commissions D) business expenses Answer: B Difficulty: 1: Easy Chapter: 2 Skill: Concept LO: 2-2: To acknowledge the strategic role that ethics must play in global management and provide guidance to managers to maintain ethical behavior amid the varying standards and practices around the world AACSB: Ethical understanding and reasoning 32) The Foreign Corrupt Practices Act of 1977 was primarily established to ________.

A) distinguish between harmless customs and actual bribery B) combat corruption initiated by electronics firms and their subsidiaries C) provide managers with anonymous methods for reporting bribery D) prosecute international extortionists under the U.S. legal system Answer: A Difficulty: 3: Challenging Chapter: 2 Skill: Concept LO: 2-2: To acknowledge the strategic role that ethics must play in global management and provide guidance to managers to maintain ethical behavior amid the varying standards and practices around the world AACSB: Ethical understanding and reasoning 33) Which of the following prohibits U.S. companies from making illegal payments or other gifts or political contributions to foreign government officials for the purposes of influencing them in business transactions?

A) Sherman Antitrust Act B) Robinson-Patman Act C) Wagner Corruption Act D) Foreign Corrupt Practices Act Answer: D Difficulty: 1: Easy Chapter: 2 Skill: Concept LO: 2-2: To acknowledge the strategic role that ethics must play in global management and provide guidance to managers to maintain ethical behavior amid the varying standards and practices around the world AACSB: Ethical understanding and reasoning

11 .

34) Which of the following was the primary purpose of the Organization for Economic Cooperation and Development Convention on Bribery?

A) to establish bribery laws B) to quantify global corruption C) to combat corporate corruption D) to protect corporate bribery whistleblowers Answer: C Difficulty: 2: Moderate Chapter: 2 Skill: Concept LO: 2-2: To acknowledge the strategic role that ethics must play in global management and provide guidance to managers to maintain ethical behavior amid the varying standards and practices around the world AACSB: Ethical understanding and reasoning 35) One of the primary complaints about the Foreign Corrupt Practices Act is that the legislation ________.

A) puts U.S. firms at a competitive disadvantage B) fails to enforce equal punishments on U.S. firms C) encourages U.S. managers to hire local agents D) requires U.S. firms to adhere to host country laws Answer: A Difficulty: 3: Challenging Chapter: 2 Skill: Concept LO: 2-2: To acknowledge the strategic role that ethics must play in global management and provide guidance to managers to maintain ethical behavior amid the varying standards and practices around the world AACSB: Ethical understanding and reasoning 36) Which of the following shows that employees have understood, and signed off on, the legal obligations regarding bribery and corruption in the countries where they do business?

A) having global interdependence B) having a global compliance system C) adhering to globalization D) adhering to commercialization Answer: B Difficulty: 2: Moderate Chapter: 2 Skill: Concept LO: 2-2: To acknowledge the strategic role that ethics must play in global management and provide guidance to managers to maintain ethical behavior amid the varying standards and practices around the world AACSB: Ethical understanding and reasoning

12 .

37) The FCPA allows "grease" payments to facilitate business in a foreign country, if ________.

A) the purpose of payment is beneficial to the home country B) the purpose of payment is beneficial to the company C) those payments are lawful in that country D) those payments are a small amount compared to the revenue generated Answer: C Difficulty: 2: Moderate Chapter: 2 Skill: Concept LO: 2-2: To acknowledge the strategic role that ethics must play in global management and provide guidance to managers to maintain ethical behavior amid the varying standards and practices around the world AACSB: Ethical understanding and reasoning 38) Which of the following is true of a code of ethics?

A) It guides decision making by all employees in the firm.

B) It does not define the values and principles that are intended to guide organizational decision making.

C) It emphasizes profit over righteousness.

D) It is a cure for all ethical dilemmas.

Answer: A Difficulty: 2: Moderate Chapter: 2 Skill: Concept LO: 2-2: To acknowledge the strategic role that ethics must play in global management and provide guidance to managers to maintain ethical behavior amid the varying standards and practices around the world AACSB: Ethical understanding and reasoning 39) The company guidelines for the actions and decisions a company employee makes is ________.

A) business white paper B) code of ethics C) project plan D) political treatise Answer: B Difficulty: 2: Moderate Chapter: 2 Skill: Concept LO: 2-2: To acknowledge the strategic role that ethics must play in global management and provide guidance to managers to maintain ethical behavior amid the varying standards and practices around the world AACSB: Ethical understanding and reasoning

13 .

40) Which of the following is the first step of making an ethical decision?

A) consulting the International Codes of Conduct for MNEs B) consulting the superiors if clarification is sought C) consulting the company's code of ethics and established norms D) consulting the laws of both the host and the home countries Answer: D Difficulty: 2: Moderate Chapter: 2 Skill: Concept LO: 2-2: To acknowledge the strategic role that ethics must play in global management and provide guidance to managers to maintain ethical behavior amid the varying standards and practices around the world AACSB: Ethical understanding and reasoning 41) Which of the following is the last step of making an ethical decision?

A) consulting your superiors if you still need clarification B) following your own conscience and moral code C) consulting the company's code of ethics and established norms D) weighing stakeholders' rights Answer: B Difficulty: 2: Moderate Chapter: 2 Skill: Concept LO: 2-2: To acknowledge the strategic role that ethics must play in global management and provide guidance to managers to maintain ethical behavior amid the varying standards and practices around the world AACSB: Ethical understanding and reasoning 42) John, an American national, works as a manager at his firm's subsidiary in Indonesia. A local government official tells John that materials could be delivered to the firm's facility more quickly if John pays an extra fee to the port supervisor. What should be John's first action?

A) consult his supervisor in the United States B) discuss the issue with his local agent C) refer to the company's code of ethics D) consult both American and Indonesian laws Answer: D Difficulty: 2: Moderate Chapter: 2 Skill: Application LO: 2-2: To acknowledge the strategic role that ethics must play in global management and provide guidance to managers to maintain ethical behavior amid the varying standards and practices around the world AACSB: Analytical thinking

14 .

43) ________ means meeting humanity's needs without harming the ability of future generations to meet their needs.

A) Sustainability B) Corporate social responsibility C) Ethical behavior D) Casuistry Answer: A Difficulty: 1: Easy Chapter: 2 Skill: Application LO: 2-3: To recognize the importance of managing interdependence and include sustainability and shared value in their long-term plans AACSB: Application of knowledge 44) According to the international codes of conduct, the MNE behavior toward the host government is related to ________.

A) economic and developmental policies, laws and regulations, and political involvement B) political involvement, technology transfer, and environmental protection C) political involvement, communication practices, and laws and regulations D) laws and regulations, technology transfer, and communication practices Answer: A Difficulty: 2: Moderate Chapter: 2 Skill: Concept LO: 2-3: To recognize the importance of managing interdependence and include sustainability and shared value in their long-term plans AACSB: Ethical understanding and reasoning 45) According to the international codes of conduct, MNEs should ________.

A) resolve disputes according to the domestic law of the home country B) dominate the capital markets in which their operations are based C) use inexpensive, imported sources for components and raw materials D) conduct research and development activities in developing countries Answer: D Difficulty: 3: Challenging Chapter: 2 Skill: Concept LO: 2-3: To recognize the importance of managing interdependence and include sustainability and shared value in their long-term plans AACSB: Ethical understanding and reasoning

15 .

46) According to the international codes of conduct, the MNE behavior toward the public is related to ________.

A) technology transfer and environmental protection B) development policies C) economic and developmental policies D) laws and regulations Answer: A Difficulty: 2: Moderate Chapter: 2 Skill: Concept LO: 2-3: To recognize the importance of managing interdependence and include sustainability and shared value in their long-term plans AACSB: Ethical understanding and reasoning 47) Firms with strong environmental interests are most likely to ________.

A) provide employees educational opportunities B) encourage the use of sweatshops C) optimize diversity in hiring D) respect a country's laws and regulations Answer: D Difficulty: 2: Moderate Chapter: 2 Skill: Concept LO: 2-3: To recognize the importance of managing interdependence and include sustainability and shared value in their long-term plans AACSB: Ethical understanding and reasoning 48) According to international codes of conduct, which of the following is related to the MNE behavior toward persons?

A) human rights B) laws and regulations C) development policies D) political involvement Answer: A Difficulty: 2: Moderate Chapter: 2 Skill: Concept LO: 2-3: To recognize the importance of managing interdependence and include sustainability and shared value in their long-term plans AACSB: Ethical understanding and reasoning

16 .

49) According to international codes of conduct, which of the following is related to the MNE behavior toward persons?

A) political involvement B) employment practices C) environmental protection D) laws and regulations Answer: B Difficulty: 2: Moderate Chapter: 2 Skill: Concept LO: 2-3: To recognize the importance of managing interdependence and include sustainability and shared value in their long-term plans AACSB: Ethical understanding and reasoning 50) According to international codes of conduct, which of the following is related to the MNE behavior toward persons?

A) consumer protection B) environmental protection C) political involvement D) technology transfer Answer: A Difficulty: 2: Moderate Chapter: 2 Skill: Concept LO: 2-3: To recognize the importance of managing interdependence and include sustainability and shared value in their long-term plans AACSB: Ethical understanding and reasoning 51) ________ refers to the business conduct or morals of MNCs in their relationships with individuals and entities.

A) Global corporate culture B) Ethical relativism C) Moral universalism D) International business ethics Answer: D Difficulty: 1: Easy Chapter: 2 Skill: Concept LO: 2-3: To recognize the importance of managing interdependence and include sustainability and shared value in their long-term plans AACSB: Ethical understanding and reasoning

17 .

52) According to Robertson and Crittenden, which of the following has made integrating an ethical component into international strategic decisions, challenging?

A) corporate ethics B) cultural constraints C) natural resources D) political stability Answer: B Difficulty: 2: Moderate Chapter: 2 Skill: Concept LO: 2-3: To recognize the importance of managing interdependence and include sustainability and shared value in their long-term plans AACSB: Diverse and multicultural work environments 53) Sustainable practices could result in ________.

A) cost savings from more efficient production B) the abolition of labor unions C) higher employee turnover D) reduced operational flexibility Answer: A Difficulty: 2: Moderate Chapter: 2 Skill: Concept LO: 2-3: To recognize the importance of managing interdependence and include sustainability and shared value in their long-term plans AACSB: Application of knowledge 54) The profitability of individual companies depends on a cooperative and constructive attitude toward ________.

A) moral idealism B) macropolitical interdependence C) global interdependence D) corporate technoglobalism Answer: C Difficulty: 2: Moderate Chapter: 2 Skill: Concept LO: 2-3: To recognize the importance of managing interdependence and include sustainability and shared value in their long-term plans AACSB: Application of knowledge

18 .

55) Which of the following MNC subsidiary activities is blamed for rising interest rates in host countries?

A) transferring in inappropriate technology B) dissolving local labor unions C) raising capital from local sources D) filling key jobs with expatriates Answer: C Difficulty: 2: Moderate Chapter: 2 Skill: Concept LO: 2-3: To recognize the importance of managing interdependence and include sustainability and shared value in their long-term plans AACSB: Application of knowledge 56) Which of the following best defines the concept of managing interdependence?

A) the effective management of a long-term, MNC subsidiary–host-country relationship through cooperation and consideration for host concerns B) the process by which international managers accept and enact their role in the preservation of ecological balance on the earth C) the process by which a firm grants the rights to a firm in the host country to produce or sell a product D) the effective development of strategies that involve designing and operating systems, and working with people around the world to ensure sustained competitive advantage Answer: A Difficulty: 2: Moderate Chapter: 2 Skill: Concept LO: 2-3: To recognize the importance of managing interdependence and include sustainability and shared value in their long-term plans AACSB: Application of knowledge 57) Which of the following terms refers to the practice by a country of rallying public opinion in favor of national goals and against foreign influences?

A) nationalism B) privatization C) protectionism D) governmentalism Answer: A Difficulty: 1: Easy Chapter: 2 Skill: Concept LO: 2-3: To recognize the importance of managing interdependence and include sustainability and shared value in their long-term plans AACSB: Application of knowledge

19 .

58) Under governmentalism, the government uses its policy-setting role to favor the interests of ________.

A) a national company B) the nation C) a foreign company D) foreign investors Answer: B Difficulty: 2: Moderate Chapter: 2 Skill: Concept LO: 2-3: To recognize the importance of managing interdependence and include sustainability and shared value in their long-term plans AACSB: Application of knowledge 59) Under governmentalism, the government uses its policy-setting role to favor national interests, rather than relying on ________.

A) market forces B) stockholder interests C) competitive analysis D) environmental standards Answer: A Difficulty: 2: Moderate Chapter: 2 Skill: Concept LO: 2-3: To recognize the importance of managing interdependence and include sustainability and shared value in their long-term plans AACSB: Application of knowledge 60) In recent years, the export of hazardous wastes from developed countries to less developed ones has ________.

A) decreased considerably B) remained about the same C) increased significantly D) been banned by the EU Answer: C Difficulty: 1: Easy Chapter: 2 Skill: Concept LO: 2-3: To recognize the importance of managing interdependence and include sustainability and shared value in their long-term plans AACSB: Ethical understanding and reasoning

20 .

61) Which of the following is the main reason why companies dispose hazardous wastes in less developed countries?

A) international agreements B) weak regulations and low costs C) advanced waste disposal plants D) large amounts of available land Answer: B Difficulty: 1: Easy Chapter: 2 Skill: Concept LO: 2-3: To recognize the importance of managing interdependence and include sustainability and shared value in their long-term plans AACSB: Ethical understanding and reasoning 62) Global interdependence creates demands on international managers to take a positive stance on issues of social responsibility and ethical behavior.

Answer: TRUE Difficulty: 1: Easy Chapter: 2 Skill: Concept LO: 2-1: To understand the social responsibility of corporations toward their various constituencies around the world in particular their responsibilities toward human rights AACSB: Ethical understanding and reasoning 63) Ethnocentric firms typically use the same business practices in all cultures and markets.

Answer: TRUE Difficulty: 1: Easy Chapter: 2 Skill: Concept LO: 2-1: To understand the social responsibility of corporations toward their various constituencies around the world in particular their responsibilities toward human rights AACSB: Ethical understanding and reasoning 64) International social responsibility includes the expectation that multinational corporations concern themselves with both social and economic effects of their decisions.

Answer: TRUE Difficulty: 1: Easy Chapter: 2 Skill: Concept LO: 2-1: To understand the social responsibility of corporations toward their various constituencies around the world in particular their responsibilities toward human rights AACSB: Ethical understanding and reasoning

21 .

65) A company subscribing to ethical relativism adopts the local moral code used in its home country.

Answer: FALSE Difficulty: 1: Easy Chapter: 2 Skill: Concept LO: 2-1: To understand the social responsibility of corporations toward their various constituencies around the world in particular their responsibilities toward human rights AACSB: Ethical understanding and reasoning 66) Social responsibility deals with decisions and interactions mostly on an individual level.

Answer: FALSE Difficulty: 1: Easy Chapter: 2 Skill: Concept LO: 2-1: To understand the social responsibility of corporations toward their various constituencies around the world in particular their responsibilities toward human rights AACSB: Ethical understanding and reasoning 67) Decisions about ethics tend to be made at a local level, affect more people, and reflect a general stance taken by a company or a number of decision makers.

Answer: TRUE Difficulty: 2: Moderate Chapter: 2 Skill: Concept LO: 2-1: To understand the social responsibility of corporations toward their various constituencies around the world in particular their responsibilities toward human rights AACSB: Ethical understanding and reasoning 68) The sales, debts, and resources of some of the largest multinational firms exceed the gross national product, the public and private debt, and the resources, respectively, of some nations.

Answer: TRUE Difficulty: 2: Moderate Chapter: 2 Skill: Concept LO: 2-1: To understand the social responsibility of corporations toward their various constituencies around the world in particular their responsibilities toward human rights AACSB: Application of knowledge

22 .

69) The increased complexity regarding the social responsibility and ethical behavior of firms across borders is brought about by the distance between the headquarters and its subsidiaries.

Answer: FALSE Difficulty: 2: Moderate Chapter: 2 Skill: Concept LO: 2-1: To understand the social responsibility of corporations toward their various constituencies around the world in particular their responsibilities toward human rights AACSB: Ethical understanding and reasoning 70) Standards of ethical behavior are uniform worldwide.

Answer: FALSE Difficulty: 1: Easy Chapter: 2 Skill: Application LO: 2-2: To acknowledge the strategic role that ethics must play in global management and provide guidance to managers to maintain ethical behavior amid the varying standards and practices around the world AACSB: Ethical understanding and reasoning 71) Ethics and appropriate behavior transcend all international business activities and figure prominently in management decisions about financial performance and competitive advantage.

Answer: TRUE Difficulty: 1: Easy Chapter: 2 Skill: Application LO: 2-2: To acknowledge the strategic role that ethics must play in global management and provide guidance to managers to maintain ethical behavior amid the varying standards and practices around the world AACSB: Ethical understanding and reasoning 72) Ethics and appropriate behavior transcend all international business activities and figure prominently in management decisions about financial performance and competitive advantage.

Answer: TRUE Difficulty: 1: Easy Chapter: 2 Skill: Application LO: 2-2: To acknowledge the strategic role that ethics must play in global management and provide guidance to managers to maintain ethical behavior amid the varying standards and practices around the world AACSB: Ethical understanding and reasoning

23 .

73) Questionable payments intended to expedite transactions are both accepted and legal in many countries.

Answer: TRUE Difficulty: 2: Moderate Chapter: 2 Skill: Concept LO: 2-2: To acknowledge the strategic role that ethics must play in global management and provide guidance to managers to maintain ethical behavior amid the varying standards and practices around the world AACSB: Diverse and multicultural work environments 74) Most managers perceive bribery as "endemic in business and government in parts of Africa and south and east Asia. Corruption and bribery are considered to be part of the culture and environment of certain markets, and will not simply go away."

Answer: TRUE Difficulty: 2: Moderate Chapter: 2 Skill: Concept LO: 2-2: To acknowledge the strategic role that ethics must play in global management and provide guidance to managers to maintain ethical behavior amid the varying standards and practices around the world AACSB: Diverse and multicultural work environments 75) Improved customer attraction and retention is a business benefit of corporate social responsibility.

Answer: TRUE Difficulty: 2: Moderate Chapter: 2 Skill: Concept LO: 2-2: To acknowledge the strategic role that ethics must play in global management and provide guidance to managers to maintain ethical behavior amid the varying standards and practices around the world AACSB: Ethical understanding and reasoning 76) Ethnocentric culture is an integration of the business environments in which firms currently operate.

Answer: FALSE Difficulty: 2: Moderate Chapter: 2 Skill: Concept LO: 2-2: To acknowledge the strategic role that ethics must play in global management and provide guidance to managers to maintain ethical behavior amid the varying standards and practices around the world AACSB: Diverse and multicultural work environments

24 .

77) The term "international business ethics" is used to address the need for a moral standard that is accepted by all cultures.

Answer: TRUE Difficulty: 1: Easy Chapter: 2 Skill: Concept LO: 2-2: To acknowledge the strategic role that ethics must play in global management and provide guidance to managers to maintain ethical behavior amid the varying standards and practices around the world AACSB: Ethical understanding and reasoning 78) Ethical relativism adopts the local moral code of the country in which it is operating.

Answer: TRUE Difficulty: 1: Easy Chapter: 2 Skill: Concept LO: 2-2: To acknowledge the strategic role that ethics must play in global management and provide guidance to managers to maintain ethical behavior amid the varying standards and practices around the world AACSB: Ethical understanding and reasoning 79) In a globalized market economy, CSR does not have to be part of modern business.

Answer: FALSE Difficulty: 1: Easy Chapter: 2 Skill: Concept LO: 2-2: To acknowledge the strategic role that ethics must play in global management and provide guidance to managers to maintain ethical behavior amid the varying standards and practices around the world AACSB: Ethical understanding and reasoning 80) Creating Shared Value (CSV) leverages the unique resources and expertise of the company to create social value by creating economic value.

Answer: FALSE Difficulty: 2: Moderate Chapter: 2 Skill: Concept LO: 2-2: To acknowledge the strategic role that ethics must play in global management and provide guidance to managers to maintain ethical behavior amid the varying standards and practices around the world AACSB: Ethical understanding and reasoning

25 .

81) Globalization has increased the ethical problems facing organizations.

Answer: TRUE Difficulty: 1: Easy Chapter: 2 Skill: Concept LO: 2-2: To acknowledge the strategic role that ethics must play in global management and provide guidance to managers to maintain ethical behavior amid the varying standards and practices around the world AACSB: Ethical understanding and reasoning 82) Global corporate culture refers to the business conduct or morals of MNCs in their relationships with individuals and entities.

Answer: FALSE Difficulty: 2: Moderate Chapter: 2 Skill: Concept LO: 2-2: To acknowledge the strategic role that ethics must play in global management and provide guidance to managers to maintain ethical behavior amid the varying standards and practices around the world AACSB: Ethical understanding and reasoning 83) The biggest single problem for MNCs in their attempt to define a corporate-wide ethical posture is the great variation of ethical standards around the world.

Answer: TRUE Difficulty: 2: Moderate Chapter: 2 Skill: Concept LO: 2-2: To acknowledge the strategic role that ethics must play in global management and provide guidance to managers to maintain ethical behavior amid the varying standards and practices around the world AACSB: Ethical understanding and reasoning 84) The Foreign Corrupt Practices Act (FCPA) allows U.S. companies to make illegal payments, other gifts, or political contributions to foreign government officials for the purpose of influencing them in business transactions.

Answer: FALSE Difficulty: 3: Challenging Chapter: 2 Skill: Concept LO: 2-2: To acknowledge the strategic role that ethics must play in global management and provide guidance to managers to maintain ethical behavior amid the varying standards and practices around the world AACSB: Ethical understanding and reasoning

26 .

85) International codes of conduct provide some consistent guidelines for multinational enterprises (MNEs).

Answer: TRUE Difficulty: 1: Easy Chapter: 2 Skill: Concept LO: 2-2: To acknowledge the strategic role that ethics must play in global management and provide guidance to managers to maintain ethical behavior amid the varying standards and practices around the world AACSB: Ethical understanding and reasoning 86) When managing interdependence, international managers must go beyond general issues of social responsibility and deal with the specific concerns of the MNC subsidiary-host country relationship.

Answer: TRUE Difficulty: 3: Challenging Chapter: 2 Skill: Concept LO: 2-3: To recognize the importance of managing interdependence and include sustainability and shared value in their long-term plans AACSB: Application of knowledge 87) A corporate culture that advocates profit over sustainability and human welfare cannot lead to employee abuse.

Answer: FALSE Difficulty: 1: Easy Chapter: 2 Skill: Concept LO: 2-3: To recognize the importance of managing interdependence and include sustainability and shared value in their long-term plans AACSB: Application of knowledge 88) The most prominent companies monitor suppliers to ensure that they use sustainable practices.

Answer: TRUE Difficulty: 1: Easy Chapter: 2 Skill: Concept LO: 2-3: To recognize the importance of managing interdependence and include sustainability and shared value in their long-term plans AACSB: Application of knowledge

27 .

89) Often, companies choose to dispose of hazardous waste in developed countries to take advantage of weaker regulations and lower costs.

Answer: FALSE Difficulty: 1: Easy Chapter: 2 Skill: Concept LO: 2-3: To recognize the importance of managing interdependence and include sustainability and shared value in their long-term plans AACSB: Ethical understanding and reasoning 90) Under nationalism, public opinion is rallied in favor of national goals and against foreign influences.

Answer: TRUE Difficulty: 1: Easy Chapter: 2 Skill: Application LO: 2-3: To recognize the importance of managing interdependence and include sustainability and shared value in their long-term plans AACSB: Application of knowledge 91) Under protectionism, public opinion is rallied in favor of national goals and against foreign influences.

Answer: FALSE Difficulty: 2: Moderate Chapter: 2 Skill: Concept LO: 2-3: To recognize the importance of managing interdependence and include sustainability and shared value in their long-term plans AACSB: Ethical understanding and reasoning 92) What is the difference between ethics and social responsibility? What are some of the social responsibility issues that MNCs must consider?

Answer: Ethics deals with decisions and interactions on an individual basis, while social responsibility deals with broader decisions that affect the entire corporation. Issues of social responsibility for MNCs continue to center on the poverty and lack of equal opportunity around the world, the environment, consumer concerns, and employee safety and welfare.

Difficulty: 3: Challenging Chapter: 2 Skill: Synthesis LO: 2-1: To understand the social responsibility of corporations toward their various constituencies around the world in particular their responsibilities toward human rights AACSB: Analytical thinking

28 .

93) What level of social responsibility is expected from domestic firms? What level is expected from international firms?

Answer: Opinions on the level of social responsibility that a domestic firm should demonstrate range from one extreme—the only responsibility of a business is to make a profit, within the confines of the law, in order to produce goods and services and serve its shareholders' interests— to another extreme—companies should anticipate and try to solve problems in society. The stance toward social responsibility that a firm should take in its international operations, however, is much more complex—ranging perhaps from assuming some responsibility for economic development in a subsidiary's host country to taking an active role in identifying and solving world problems.

Difficulty: 3: Challenging Chapter: 2 Skill: Concept LO: 2-1: To understand the social responsibility of corporations toward their various constituencies around the world in particular their responsibilities toward human rights AACSB: Ethical understanding and reasoning 94) What can be the impact of CSR on business profits, which can increase the firm's competitiveness and ultimately its economic success?

Answer: (1) improved access to capital, (2) secured license to operate, (3) revenue increases, (4) cost decreases, (5) risk reduction, (6) increase in brand value, (7) improved customer attraction and retention, (8) improved reputation and (9) improved employee recruitment, motivation and retention.

Difficulty: 3: Challenging Chapter: 2 Skill: Concept LO: 2-1: To understand the social responsibility of corporations toward their various constituencies around the world in particular their responsibilities toward human rights AACSB: Application of knowledge 95) What is a code of ethics? What function does it serve for businesses?

Answer: A code of ethics is a document that describes the values and expectations that guide decision making by all employees in the firm. The code aims to function like a moral compass for the firm's operations worldwide. It should be designed to ensure any employee can identify ethical problems and distinguish between right and wrong actions. The code should be general enough to apply to any ethical challenge that confronts the firm. It should list the general principles that guide daily decisions and interactions with customers, employees, and partners.

The code should be created by senior management and disseminated throughout the firm. It should be translated into all languages used by the firm in its international operations.

Difficulty: 2: Moderate Chapter: 2 Skill: Application LO: 2-2: To acknowledge the strategic role that ethics must play in global management and provide guidance to managers to maintain ethical behavior amid the varying standards and practices around the world AACSB: Ethical understanding and reasoning 29 .

96) Describe the three types of interests simultaneously pursued by a sustainable business.

Answer: A sustainable business simultaneously pursues three types of interests: • Economic interests refer to the firm's economic impact on the localities where it does business.

Management considers the effect of the firm's activities on such local concerns as job creation, wages, tax flows, disadvantaged communities, public works, and other areas where the firm can contribute positively to local economic interests.

• Social interests refer to how the firm performs relative to societies and social justice, often termed social impact. The firm with a strong social interest aims to optimize work conditions and diversity in hiring. It avoids using sweatshops, child labor, and other practices that harm workers.

Instead, the sustainable firm provides safe work environments, health insurance, retirement benefits, and educational opportunities for employees.

• Environmental interests refer to the extent of the firm's contribution to preserving environmental quality, commonly known as environmental impact. This concept refers to reducing the effect of the firm's value-chain activities on the natural environment. The sustainable firm maximizes its use of recycled or renewable raw materials and environmentally friendly energy. It minimizes pollutants, designs production lines to use water and energy efficiently, and constantly seeks ways to reduce waste. Many firms establish a green purchasing policy, through which they source inputs that support environmental interests.

Difficulty: 2: Moderate Chapter: 2 Skill: Application LO: 2-2: To acknowledge the strategic role that ethics must play in global management and provide guidance to managers to maintain ethical behavior amid the varying standards and practices around the world AACSB: Application of knowledge 97) What is the relationship between global corporate culture and moral universalism?

Answer: The emergence of a global corporate culture (i.e., the integration of the business environments in which businesses operate) is leading towards global consensus about social responsibility (i.e., moral universalism). Despite this trend, however, there are regional variations in how companies respond to corporate social responsibility.

Difficulty: 3: Challenging Chapter: 2 Skill: Synthesis LO: 2-2: To acknowledge the strategic role that ethics must play in global management and provide guidance to managers to maintain ethical behavior amid the varying standards and practices around the world AACSB: Analytical thinking

30 .

98) Explain the differences between moral universalism, ethnocentrism, and ethical relativism.

Which approach is best?

Answer: When using the ethnocentric approach, the company applies the morality of its home country. In contrast, a company using ethical relativism adopts the moral code of the country in which it is doing business. Moral universalism is different in that it neither applies a moral code that is based on the home or host country, but rather uses a set of universal standards or codes that are derived from international codes of conduct. Ethics researcher Bowie argues that moral universalism is preferable to ethnocentrism and relativism as a guide for ethical decision making.

Difficulty: 3: Challenging Chapter: 2 Skill: Critical Thinking LO: 2-2: To acknowledge the strategic role that ethics must play in global management and provide guidance to managers to maintain ethical behavior amid the varying standards and practices around the world AACSB: Analytical thinking 99) What are the proposed global labor standards of SA8000?

Answer: The five proposed global labor standards include: (1) do not use child or forced labor, (2) provide a safe working environment, (3) respect workers' right to unionize, (4) do not regularly require more than 48-hour work weeks, and (5) pay wages sufficient to meet workers' basic needs.

Difficulty: 2: Moderate Chapter: 2 Skill: Concept LO: 2-2: To acknowledge the strategic role that ethics must play in global management and provide guidance to managers to maintain ethical behavior amid the varying standards and practices around the world AACSB: Application of knowledge 100) According to the international codes of conduct, how should MNEs handle technology transfer overseas?

Answer: MNEs should cooperate with governmental authorities in assessing the impact of transfers of technology to developing countries and in enhancing the technological capacities of developing countries. MNEs should develop and adapt technologies to the needs and characteristics of the countries in which they operate. MNEs should conduct research and development activities in developing countries, using local resources and personnel to the greatest extent possible.

Difficulty: 3: Challenging Chapter: 2 Skill: Concept LO: 2-2: To acknowledge the strategic role that ethics must play in global management and provide guidance to managers to maintain ethical behavior amid the varying standards and practices around the world AACSB: Ethical understanding and reasoning

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101) What employment practices should MNEs follow abroad according to the international codes of conduct?

Answer: MNEs should cooperate with host governments' efforts to create employment opportunities in particular localities. MNEs should work to increase employment opportunities and standards in the countries in which they operate. MNEs should give advance notice of plant closures and mitigate the resultant adverse effects. MNEs should provide standards of employment equal to or better than those of comparable employers in the countries in which they operate. MNEs should pay, at minimum, basic living wages.

Difficulty: 3: Challenging Chapter: 2 Skill: Concept LO: 2-2: To acknowledge the strategic role that ethics must play in global management and provide guidance to managers to maintain ethical behavior amid the varying standards and practices around the world AACSB: Ethical understanding and reasoning 102) What is the primary problem for MNCs that try to define organizational ethics?

Answer: The biggest single problem for MNCs in their attempt to define a corporate-wide ethical posture is the great variation of ethical standards around the world. Many practices that are considered unethical or even illegal in some countries are accepted ways of doing business in others.

Difficulty: 3: Challenging Chapter: 2 Skill: Concept LO: 2-2: To acknowledge the strategic role that ethics must play in global management and provide guidance to managers to maintain ethical behavior amid the varying standards and practices around the world AACSB: Ethical understanding and reasoning 103) What are questionable payments? Why are they problematic for international managers?

Answer: Questionable payments are business payments that raise significant questions of appropriate moral behavior either in the host nation or in other nations. Such questions arise out of differences in laws, customs, and ethics in various countries, whether the payments in question are political payments, extortion, bribes, sales commissions, or "grease money"— payments to expedite routine transactions. The dilemma for Americans operating abroad is how much to adhere to their own ethical standards in the face of foreign customs, or how much to follow local ways to be competitive.

Difficulty: 3: Challenging Chapter: 2 Skill: Concept LO: 2-2: To acknowledge the strategic role that ethics must play in global management and provide guidance to managers to maintain ethical behavior amid the varying standards and practices around the world AACSB: Ethical understanding and reasoning

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104) What is sustainable development? Why is sustainability a dilemma for MNCs? Answer: Sustainable development for business enterprises involves adopting business strategies and activities that meet the needs of the enterprise and its stakeholders today, while protecting, sustaining, and enhancing the human and natural resources that will be needed in the future. The dilemma for corporations is that they are faced with trying to meet two often contradictory requirements: (1) selling at low prices and (2) being environmentally and socially conscious.

However, competitive pressures limit the company's ability to raise prices in order to cover the cost of socially responsible policies. This is obviously contradictory to the well-being of societies.

Difficulty: 3: Challenging Chapter: 2 Skill: Concept LO: 2-3: To recognize the importance of managing interdependence and include sustainability and shared value in their long-term plans AACSB: Ethical understanding and reasoning

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International Management, 10e, (Deresky/Miller) Chapter 3 Understanding the Role of Culture 1) Which term refers to the collection of values, beliefs, behaviors, customs, and attitudes that distinguish one society from another?

A) history B) culture C) politics D) norms Answer: B Difficulty: 1: Easy Chapter: 3 Skill: Concept LO: 3-1: To understand how culture affects all aspects of international management AACSB: Diverse and multicultural work environments 2) ________ is an outsider's capability to relate and work effectively across cultures.

A) Multicultural sensitivity B) Cultural accommodation C) Multicultural transfer D) Cultural intelligence Answer: D Difficulty: 1: Easy Chapter: 3 Skill: Concept LO: 3-1: To understand how culture affects all aspects of international management AACSB: Diverse and multicultural work environments 3) ________ is the awareness of and an honest caring about another individual's culture.

A) Cultural accommodation B) Cultural sensitivity C) Cultural sympathy D) Cultural quotient Answer: B Difficulty: 1: Easy Chapter: 3 Skill: Concept LO: 3-1: To understand how culture affects all aspects of international management AACSB: Diverse and multicultural work environments

1 .

4) When immigrants adopt some aspects of the local culture while keeping aspects of their culture of origin, this process is called ________.

A) stereotyping B) particularism C) creolization D) ethnocentrism Answer: C Difficulty: 1: Easy Chapter: 3 Skill: Concept LO: 3-1: To understand how culture affects all aspects of international management AACSB: Diverse and multicultural work environments 5) According to contingency management, international managers need to ________.

A) transfer home-country business practices to the local environment B) adapt their management styles to the local setting and people C) determine the extent to which locals will accept unequal power D) provide training to locals before transferring new technology Answer: B Difficulty: 2: Moderate Chapter: 3 Skill: Concept LO: 3-1: To understand how culture affects all aspects of international management AACSB: Diverse and multicultural work environments 6) Cultural sensitivity is also known as ________.

A) cultural empathy B) cultural intelligence C) cultural quotient D) cultural diffusion Answer: A Difficulty: 1: Easy Chapter: 3 Skill: Concept LO: 3-1: To understand how culture affects all aspects of international management AACSB: Diverse and multicultural work environments

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7) Global managers who exhibit cultural intelligence and cultural sensitivity will most likely be able to ________.

A) negotiate effectively in expatriate assignments B) request bonuses for overseas job assignments C) implement technological changes quickly D) conduct efficient performance appraisals Answer: A Difficulty: 2: Moderate Chapter: 3 Skill: Concept LO: 3-1: To understand how culture affects all aspects of international management AACSB: Diverse and multicultural work environments 8) Which of the following is a primary reason for failed expatriate assignments?

A) universalism B) cross-cultural differences C) particularism D) economic barriers Answer: B Difficulty: 2: Moderate Chapter: 3 Skill: Concept LO: 3-1: To understand how culture affects all aspects of international management AACSB: Diverse and multicultural work environments 9) ________ refers to the values, beliefs, customs, arts, and other products of human thought and work that characterize the people of a given society.

A) Ethnicity B) Heritage C) Culture D) Race Answer: C Difficulty: 1: Easy Chapter: 3 Skill: Concept LO: 3-1: To understand how culture affects all aspects of international management AACSB: Diverse and multicultural work environments

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10) Globalization, in all its forms of personal and business contacts and information crossing borders, brings about changes that result in ________.

A) individualism B) enculturation C) acculturation D) cultural diffusion Answer: D Difficulty: 1: Easy Chapter: 3 Skill: Concept LO: 3-1: To understand how culture affects all aspects of international management AACSB: Diverse and multicultural work environments 11) Which of the following is NOT categorized as a sociocultural variable of culture?

A) religion B) language C) education D) economic system Answer: D Difficulty: 2: Moderate Chapter: 3 Skill: Concept LO: 3-1: To understand how culture affects all aspects of international management AACSB: Diverse and multicultural work environments 12) Which of the following represents the expectations, norms, and goals held within a region or nation?

A) cultural variable B) societal culture C) organizational culture D) organizational system Answer: B Difficulty: 1: Easy Chapter: 3 Skill: Concept LO: 3-1: To understand how culture affects all aspects of international management AACSB: Diverse and multicultural work environments

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13) An organization where employees typically wear casual clothes and interact casually is most likely to have a(n) ________ organizational culture.

A) hierarchical B) formal C) rules-bound D) informal Answer: D Difficulty: 2: Moderate Chapter: 3 Skill: Concept LO: 3-1: To understand how culture affects all aspects of international management AACSB: Diverse and multicultural work environments 14) Which of the following is a drawback of organizational culture?

A) dishonesty toward organization B) reduced cooperation C) lack of commitment D) overly domestic focus Answer: D Difficulty: 2: Moderate Chapter: 3 Skill: Concept LO: 3-1: To understand how culture affects all aspects of international management AACSB: Diverse and multicultural work environments 15) Which of the following is an advantage of organizational culture?

A) loyalty B) tendency to adopt changes quickly C) excessive domestic focus D) individuality Answer: A Difficulty: 2: Moderate Chapter: 3 Skill: Concept LO: 3-1: To understand how culture affects all aspects of international management AACSB: Diverse and multicultural work environments

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16) ________ is the phenomenon of the shifting of individual management styles to become more similar to one another.

A) Parochialism B) Particularism C) Stereotyping D) Convergence Answer: D Difficulty: 1: Easy Chapter: 3 Skill: Concept LO: 3-1: To understand how culture affects all aspects of international management AACSB: Diverse and multicultural work environments 17) The unconscious reference point of one's own cultural values is called a ________.

A) self-reference criterion B) cultural distance criterion C) cross cultural literacy D) cultural conversion Answer: A Difficulty: 1: Easy Chapter: 3 Skill: Concept LO: 3-1: To understand how culture affects all aspects of international management AACSB: Diverse and multicultural work environments 18) The first step for an international manager toward cultural sensitivity should be to understand his or her own culture. This awareness helps protect from adopting a(n) ________ attitude.

A) polycentric B) stereotypical C) ethnocentric D) convergence Answer: C Difficulty: 2: Moderate Chapter: 3 Skill: Concept LO: 3-1: To understand how culture affects all aspects of international management AACSB: Diverse and multicultural work environments

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19) Canada consists of distinct groups such as Anglophones, Francophones, and indigenous Canadians. This is an example of ________.

A) subculture B) stereotyping C) cultural diffusion D) convergence Answer: A Difficulty: 2: Moderate Chapter: 3 Skill: Concept LO: 3-1: To understand how culture affects all aspects of international management AACSB: Diverse and multicultural work environments 20) Which of the following terms refers to the expectation that foreigners should automatically fall into host-country patterns of behavior?

A) geocentrism B) nationalism C) parochialism D) ethnocentrism Answer: C Difficulty: 2: Moderate Chapter: 3 Skill: Concept LO: 3-1: To understand how culture affects all aspects of international management AACSB: Diverse and multicultural work environments 21) ________ refers to the belief that the practices of one's own country are best no matter where or under what conditions they are applied.

A) Geocentrism B) Nationalism C) Parochialism D) Ethnocentrism Answer: D Difficulty: 1: Easy Chapter: 3 Skill: Concept LO: 3-1: To understand how culture affects all aspects of international management AACSB: Diverse and multicultural work environments

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22) Stereotyping should most likely be avoided by international managers because ________.

A) current variables of culture are grossly inaccurate B) many cultures have diverse subcultures C) many countries outlaw the practice D) national culture is nonexistent Answer: B Difficulty: 3: Challenging Chapter: 3 Skill: Concept LO: 3-1: To understand how culture affects all aspects of international management AACSB: Diverse and multicultural work environments 23) ________ refers to the assumption that every member of a society or subculture has the same characteristics or traits without regard to individual differences.

A) Diversification B) Posturing C) Stereotyping D) Parochialism Answer: C Difficulty: 2: Moderate Chapter: 3 Skill: Concept LO: 3-1: To understand how culture affects all aspects of international management AACSB: Diverse and multicultural work environments 24) According to Harris and Moran, which of the following is NOT a category that forms the subsystems in any society?

A) societal system B) health system C) education system D) political system Answer: A Difficulty: 1: Easy Chapter: 3 Skill: Concept LO: 3-1: To understand how culture affects all aspects of international management AACSB: Diverse and multicultural work environments

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25) The main purpose of Harris and Moran's eight categories is ________.

A) to show how subsystems in a society affect an individual's behavior B) to emphasize how stereotyping can be used for learning about different cultures C) to show how subcultures are beginning to converge with broader cultures D) to indicate that global managers should adapt to subordinates from other cultures Answer: A Difficulty: 3: Challenging Chapter: 3 Skill: Concept LO: 3-1: To understand how culture affects all aspects of international management AACSB: Diverse and multicultural work environments 26) According to Harris and Moran's eight categories, a kinship system refers to the influence of ________.

A) workplace relations B) religious activities C) family relationships D) formal groups Answer: C Difficulty: 1: Easy Chapter: 3 Skill: Concept LO: 3-1: To understand how culture affects all aspects of international management AACSB: Diverse and multicultural work environments 27) Which of the following subsystems is most likely to underlie both moral and economic norms, and influences everyday business transactions and on the job behaviors?

A) kinship system B) political system C) religious system D) education system Answer: C Difficulty: 2: Moderate Chapter: 3 Skill: Concept LO: 3-1: To understand how culture affects all aspects of international management AACSB: Diverse and multicultural work environments

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28) Which of the following terms refers to a society's ideas and convictions about what is good or bad and right or wrong?

A) regulations B) values C) rules D) procedures Answer: B Difficulty: 1: Easy Chapter: 3 Skill: Concept LO: 3-2: To be able to distinguish the major value dimensions that define cultural differences among societies or groups AACSB: Diverse and multicultural work environments 29) Which of the following is a cultural dimension identified by the GLOBE Project team?

A) assertiveness B) collectivism C) individualism D) fatalism Answer: A Difficulty: 1: Easy Chapter: 3 Skill: Concept LO: 3-2: To be able to distinguish the major value dimensions that define cultural differences among societies or groups AACSB: Diverse and multicultural work environments 30) Sweden and Japan tend to prefer warm and cooperative relations and harmony. Therefore, according to the GLOBE project, Austria and Germany are most likely to be a(n) ________ societies.

A) accommodative B) cooperative C) humane-oriented D) less assertive Answer: D Difficulty: 2: Moderate Chapter: 3 Skill: Concept LO: 3-2: To be able to distinguish the major value dimensions that define cultural differences among societies or groups AACSB: Diverse and multicultural work environments

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31) Which of the following is true of a future-oriented country?

A) It focuses on short-term planning.

B) It emphasizes solidarity.

C) focuses on planning and investing in the future.

D) It emphasizes instant gratification.

Answer: C Difficulty: 2: Moderate Chapter: 3 Skill: Concept LO: 3-2: To be able to distinguish the major value dimensions that define cultural differences among societies or groups AACSB: Diverse and multicultural work environments 32) According to the GLOBE project, which of the following cultural dimensions measures the extent to which a society encourages and rewards people for being fair, altruistic, generous, caring, and kind?

A) humane orientation B) assertiveness C) future orientation D) performance orientation Answer: A Difficulty: 1: Easy Chapter: 3 Skill: Concept LO: 3-2: To be able to distinguish the major value dimensions that define cultural differences among societies or groups AACSB: Diverse and multicultural work environments 33) People in Singapore and Switzerland are inclined toward long-term planning. According to the GLOBE project, such societies score high on ________.

A) performance orientation B) assertiveness C) humane orientation D) future orientation Answer: D Difficulty: 2: Moderate Chapter: 3 Skill: Concept LO: 3-2: To be able to distinguish the major value dimensions that define cultural differences among societies or groups AACSB: Diverse and multicultural work environments

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34) Managers from Singapore, Hong Kong, and the United States tend to take initiative and have a sense of urgency, and the confidence to get things done. According to the GLOBE project, such managers score high on the cultural dimension of ________.

A) humane orientation B) future orientation C) performance orientation D) assertiveness Answer: C Difficulty: 2: Moderate Chapter: 3 Skill: Concept LO: 3-2: To be able to distinguish the major value dimensions that define cultural differences among societies or groups AACSB: Diverse and multicultural work environments 35) Celgene Corporation, a large pharmaceutical firm based in Texas, wants to establish its presence by expanding overseas. The company's executives evaluate locations across the world for the most suitable place to build the latest Celgene manufacturing facility. Which of the following, if true, best supports the argument that Celgene should build its new facility in Ireland?

A) Expanding into a similar culture reduces risks associated with different attitudes, values, and communication styles.

B) Celgene's main competitor received government incentives for building a new manufacturing facility in the United Kingdom.

C) Collectivist societies like Ireland encourage the individual achievement necessary for scientific advancements in pharmaceuticals.

D) Particularistic cultures apply rules and systems objectively, which is important within the Celgene organizational culture.

Answer: A Difficulty: 3: Challenging Chapter: 3 Skill: Application LO: 3-2: To be able to distinguish the major value dimensions that define cultural differences among societies or groups AACSB: Analytical thinking

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36) All of the following are value dimensions proposed by Hofstede EXCEPT ________.

A) uncertainty avoidance B) assertiveness C) power distance D) individualism Answer: B Difficulty: 1: Easy Chapter: 3 Skill: Concept LO: 3-2: To be able to distinguish the major value dimensions that define cultural differences among societies or groups AACSB: Diverse and multicultural work environments 37) Workplaces in high power distance cultures will most likely be characterized by ________.

A) flexible schedules B) autocratic leadership C) loosely defined chains of command D) open communication of ideas Answer: B Difficulty: 2: Moderate Chapter: 3 Skill: Concept LO: 3-2: To be able to distinguish the major value dimensions that define cultural differences among societies or groups AACSB: Diverse and multicultural work environments 38) According to Hofstede's framework, organizations which have cultures that score high on ________ tend to be more hierarchical, with power deriving from prestige, force, and inheritance.

A) uncertainty avoidance B) power distance C) short-term orientation D) femininity Answer: B Difficulty: 2: Moderate Chapter: 3 Skill: Concept LO: 3-2: To be able to distinguish the major value dimensions that define cultural differences among societies or groups AACSB: Diverse and multicultural work environments

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39) According to Hofstede's framework, a culture with large power distance tends to be characterized by ________.

A) inequality between superiors and subordinates B) the absence of any form of hierarchy C) power derived from hard work and entrepreneurial drive D) a preference for individualism over collectivism Answer: A Difficulty: 2: Moderate Chapter: 3 Skill: Concept LO: 3-2: To be able to distinguish the major value dimensions that define cultural differences among societies or groups AACSB: Diverse and multicultural work environments 40) According to Hofstede, societies that accept strong hierarchical boss-subordinate relationships are high on ________.

A) uncertainty avoidance B) collectivism C) individualism D) power distance Answer: D Difficulty: 2: Moderate Chapter: 3 Skill: Concept LO: 3-2: To be able to distinguish the major value dimensions that define cultural differences among societies or groups AACSB: Diverse and multicultural work environments 41) Firms with high power distance are most likely to be characterized by ________.

A) concentrated power among executives and little autonomy for subordinates B) an equal distribution of power among executives, managers, and lower-level employees C) a minimal gap between the powerful and the weak D) a highly flexible work environment Answer: A Difficulty: 1: Easy Chapter: 3 Skill: Concept LO: 3-2: To be able to distinguish the major value dimensions that define cultural differences among societies or groups AACSB: Diverse and multicultural work environments

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42) Kathleen, a social worker from the United States, has been stationed in Mexico for a year.

She notices several things about the Mexican society; the people who report to her, for example, do so with an excessive amount of submissiveness, and her superior seems to expect the same of her. Which of the following statements about Mexico would be consistent with Hofstede's framework?

A) Mexican's work best in an informal environment.

B) Mexico has a large power distance culture.

C) Mexican society is primarily individualistic.

D) Mexican's derive power from their entrepreneurial drive.

Answer: B Difficulty: 2: Moderate Chapter: 3 Skill: Concept LO: 3-2: To be able to distinguish the major value dimensions that define cultural differences among societies or groups AACSB: Diverse and multicultural work environments 43) John notices that organizations in China tend to be hierarchical with power derived from prestige and force. Which of the following statements is consistent with her observation?

A) Chinese society considers caste system and class system a myth.

B) Chinese men are subordinate to Chinese women.

C) China scores high on the power distance dimension.

D) China owes its success to its individualistic society.

Answer: C Difficulty: 2: Moderate Chapter: 3 Skill: Concept LO: 3-2: To be able to distinguish the major value dimensions that define cultural differences among societies or groups AACSB: Diverse and multicultural work environments 44) According to Hofstede's framework, a culture with ________ values security and places its faith in strong systems of rules and procedures in society.

A) large uncertainty avoidance B) low power distance C) short-term orientation D) high individualism Answer: A Difficulty: 1: Easy Chapter: 3 Skill: Concept LO: 3-2: To be able to distinguish the major value dimensions that define cultural differences among societies or groups AACSB: Diverse and multicultural work environments

15 .

45) John learned that organizations in Saudi Arabia emphasizes loyalty to the family and tribe and that ties among individuals are highly valued. Based on Harold's observation, Saudi Arabia is ________.

A) a collectivist culture B) an individualistic culture C) characterized by low power distance D) a feminine culture Answer: A Difficulty: 1: Easy Chapter: 3 Skill: Concept LO: 3-2: To be able to distinguish the major value dimensions that define cultural differences among societies or groups AACSB: Diverse and multicultural work environments 46) According to Hofstede, the tendency of people to look after themselves and their immediate family and to place less emphasis on the needs of the society is known as ________.

A) power distance B) uncertainty avoidance C) individualism D) masculinity Answer: C Difficulty: 1: Easy Chapter: 3 Skill: Concept LO: 3-2: To be able to distinguish the major value dimensions that define cultural differences among societies or groups AACSB: Diverse and multicultural work environments 47) Based on Hofstede's value dimensions, countries that have strict laws and procedures to which their people adhere closely most likely have ________.

A) high power distance B) high masculinity C) high uncertainty avoidance D) high individualism Answer: C Difficulty: 2: Moderate Chapter: 3 Skill: Concept LO: 3-2: To be able to distinguish the major value dimensions that define cultural differences among societies or groups AACSB: Diverse and multicultural work environments

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48) Based on Hofstede's value dimensions, countries in which nationalism is less pronounced, protests are tolerated, and job mobility is common are high on ________.

A) power distance B) collectivism C) uncertainty avoidance D) masculinity Answer: C Difficulty: 2: Moderate Chapter: 3 Skill: Concept LO: 3-2: To be able to distinguish the major value dimensions that define cultural differences among societies or groups AACSB: Diverse and multicultural work environments 49) Which of the following is characteristic of collectivist societies?

A) In collectivist societies, each person tends to focus on his or her own self-interest.

B) In collectivist societies, compromise and conformity help maintain group harmony.

C) In collectivist societies, ties among people are relatively loose.

D) In collectivist societies, those who compete best are rewarded financially.

Answer: B Difficulty: 2: Moderate Chapter: 3 Skill: Concept LO: 3-2: To be able to distinguish the major value dimensions that define cultural differences among societies or groups AACSB: Diverse and multicultural work environments 50) Which of the following is a primary characteristic of masculine societies?

A) individualistic B) emphasis on group achievements C) tight social frameworks D) lack of gender bias Answer: A Difficulty: 1: Easy Chapter: 3 Skill: Concept LO: 3-2: To be able to distinguish the major value dimensions that define cultural differences among societies or groups AACSB: Diverse and multicultural work environments

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51) Which of the following is true of countries with low masculinity?

A) more job conflicts B) increase in work-related stress C) tend to exhibit high power distance D) lack of concern for others Answer: C Difficulty: 2: Moderate Chapter: 3 Skill: Concept LO: 3-2: To be able to distinguish the major value dimensions that define cultural differences among societies or groups AACSB: Diverse and multicultural work environments 52) Which of the following is NOT one of Trompenaars's value dimensions?

A) universalism versus particularism B) neutral versus affective C) specific versus diffuse D) intrinsic versus extrinsic Answer: D Difficulty: 2: Moderate Chapter: 3 Skill: Concept LO: 3-2: To be able to distinguish the major value dimensions that define cultural differences among societies or groups AACSB: Diverse and multicultural work environments 53) According to Trompenaars's value dimensions, which of the following is true of the universalistic approach?

A) It emphasizes applying rules and systems objectively.

B) It focuses on expressing emotions openly.

C) It emphasizes relationships.

D) It focuses on separating work and private life.

Answer: A Difficulty: 2: Moderate Chapter: 3 Skill: Concept LO: 3-2: To be able to distinguish the major value dimensions that define cultural differences among societies or groups AACSB: Diverse and multicultural work environments

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54) Based on Trompenaars's value dimensions, which of the following is a characteristic of the particularistic approach?

A) application of rules and systems B) open expression of emotions C) more likely to pass on insider information D) opportunity to achieve status Answer: C Difficulty: 2: Moderate Chapter: 3 Skill: Concept LO: 3-2: To be able to distinguish the major value dimensions that define cultural differences among societies or groups AACSB: Diverse and multicultural work environments 55) In which of the following societies are people more likely to apply rules and systems objectively without consideration for individual circumstances?

A) particularistic B) universalistic C) neutral D) affective Answer: B Difficulty: 1: Easy Chapter: 3 Skill: Concept LO: 3-2: To be able to distinguish the major value dimensions that define cultural differences among societies or groups AACSB: Diverse and multicultural work environments 56) According to Trompenaars's value dimensions, which of the following focuses on the emotional orientation of relationships?

A) universalism versus particularism B) neutral versus affective C) specific versus diffuse D) achievement versus ascription Answer: B Difficulty: 2: Moderate Chapter: 3 Skill: Concept LO: 3-2: To be able to distinguish the major value dimensions that define cultural differences among societies or groups AACSB: Diverse and multicultural work environments

19 .

57) Managers from Italy, Greece, China and Mexico would most likely express their emotions openly during a business situation, while managers from England, Germany and Japan would most likely consider such behavior unprofessional. Which of the following Trompenaars's value dimensions explains this difference in behavior and attitude?

A) universalism versus particularism B) neutral versus affective C) specific versus diffuse D) achievement versus ascription Answer: B Difficulty: 2: Moderate Chapter: 3 Skill: Concept LO: 3-2: To be able to distinguish the major value dimensions that define cultural differences among societies or groups AACSB: Diverse and multicultural work environments 58) Based on Trompenaars's value dimensions, in which of the following cultures do managers separate their work and private lives, and tend to be open and direct when communicating with coworkers?

A) diffuse-oriented B) specific-oriented C) universalistic D) particularistic Answer: B Difficulty: 2: Moderate Chapter: 3 Skill: Concept LO: 3-2: To be able to distinguish the major value dimensions that define cultural differences among societies or groups AACSB: Diverse and multicultural work environments 59) Which of the following Trompenaars's value dimensions explains the source of power and status in society?

A) universalism versus particularism B) neutral versus affective C) specific versus diffuse D) achievement versus ascription Answer: D Difficulty: 1: Easy Chapter: 3 Skill: Concept LO: 3-2: To be able to distinguish the major value dimensions that define cultural differences among societies or groups AACSB: Diverse and multicultural work environments

20 .

60) According to Trompenaars's value dimensions, if you are born and raised in an achievement society, your source of status will most likely be based upon your ________.

A) father's occupation B) age C) how well you perform on the job D) gender Answer: C Difficulty: 2: Moderate Chapter: 3 Skill: Application LO: 3-2: To be able to distinguish the major value dimensions that define cultural differences among societies or groups AACSB: Analytical thinking 61) Which of the following is true of the way Arabs view time?

A) Deadlines and firm commitments are crucial to Arabs.

B) Arabs view time as a valuable and limited resource.

C) Arabs believe important decisions cannot be rushed.

D) Arabs honor deadlines by all means.

Answer: C Difficulty: 3: Challenging Chapter: 3 Skill: Concept LO: 3-2: To be able to distinguish the major value dimensions that define cultural differences among societies or groups AACSB: Diverse and multicultural work environments 62) Which of the following is true of the attitude toward work in Mexican culture?

A) Work is a sacred duty.

B) Group harmony at work is essential to success.

C) Workers are primarily focused on the future.

D) Leisure time is more important than work.

Answer: D Difficulty: 3: Challenging Chapter: 3 Skill: Concept LO: 3-2: To be able to distinguish the major value dimensions that define cultural differences among societies or groups AACSB: Diverse and multicultural work environments

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63) Which of the following factors can cause changes in traditional, non-Western societies?

A) media exposure B) religious activities C) stereotyping D) self-reference criterion Answer: A Difficulty: 2: Moderate Chapter: 3 Skill: Concept LO: 3-2: To be able to distinguish the major value dimensions that define cultural differences among societies or groups AACSB: Diverse and multicultural work environments 64) Which of the following factors primarily determines how the Internet is used in different countries?

A) local connection speeds B) availability of personal computer parlors C) local attitude to information privacy D) extent of intercultural communication systems Answer: C Difficulty: 2: Moderate Chapter: 3 Skill: Concept LO: 3-3: To understand the interaction between culture and the use of the Internet AACSB: Diverse and multicultural work environments 65) The German preference for closed doors and private space as evidence of the affinity for compartmentalization in organizations and in their own lives most likely stems from its ________.

A) foreign business practices B) global nature of information technology C) culture and history D) competitive origins Answer: C Difficulty: 2: Moderate Chapter: 3 Skill: Concept LO: 3-4: To be able to develop a working cultural profile typical of many people within a certain society as an aid to anticipating attitudes toward work, negotiations and so on AACSB: Diverse and multicultural work environments

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66) Based on the study conducted by Harris and Moran, which of the following is NOT a workplace behavior of most Americans?

A) following a formal culture B) being highly organized and institutionally minded C) having a strong work ethic D) being competitive and aggressive Answer: A Difficulty: 2: Moderate Chapter: 3 Skill: Concept LO: 3-4: To be able to develop a working cultural profile typical of many people within a certain society as an aid to anticipating attitudes toward work, negotiations and so on AACSB: Diverse and multicultural work environments 67) Which of the following is NOT a characteristic of the Arab culture?

A) emphasis on hospitality B) imposition of deadlines C) five times a day prayer pattern D) indirect communication style Answer: B Difficulty: 2: Moderate Chapter: 3 Skill: Concept LO: 3-4: To be able to develop a working cultural profile typical of many people within a certain society as an aid to anticipating attitudes toward work, negotiations and so on AACSB: Diverse and multicultural work environments 68) With regard to small family businesses in China, a "guanxi" can be described as a ________.

A) family hierarchy that determines who receives profits B) competitive management style based on Confucian values C) network of relationships centered on mutual obligations and favors D) combination of modern and traditional methods for managing employees Answer: C Difficulty: 1: Easy Chapter: 3 Skill: Concept LO: 3-4: To be able to develop a working cultural profile typical of many people within a certain society as an aid to anticipating attitudes toward work, negotiations and so on AACSB: Diverse and multicultural work environments

23 .

69) Cultural intelligence is also known as cultural quotient.

Answer: TRUE Difficulty: 1: Easy Chapter: 3 Skill: Concept LO: 3-1: To understand how culture affects all aspects of international management AACSB: Diverse and multicultural work environments 70) Ethnocentricity facilitates the establishment of new businesses abroad.

Answer: FALSE Difficulty: 2: Moderate Chapter: 3 Skill: Concept LO: 3-1: To understand how culture affects all aspects of international management AACSB: Diverse and multicultural work environments 71) An ethnocentric attitude requires the willingness to put oneself in another's shoes.

Answer: FALSE Difficulty: 1: Easy Chapter: 3 Skill: Concept LO: 3-1: To understand how culture affects all aspects of international management AACSB: Diverse and multicultural work environments 72) Creolization is the process where immigrants completely disregard all aspects of the local culture.

Answer: FALSE Difficulty: 1: Easy Chapter: 3 Skill: Concept LO: 3-1: To understand how culture affects all aspects of international management AACSB: Diverse and multicultural work environments 73) Organizational culture represents the expectations, norms, and goals held in common by members of a specific group.

Answer: TRUE Difficulty: 1: Easy Chapter: 3 Skill: Concept LO: 3-1: To understand how culture affects all aspects of international management AACSB: Diverse and multicultural work environments

24 .

74) Societal culture tends to be stronger than organizational culture.

Answer: TRUE Difficulty: 2: Moderate Chapter: 3 Skill: Concept LO: 3-1: To understand how culture affects all aspects of international management AACSB: Diverse and multicultural work environments 75) An organization where employees typically wear casual clothes and interact casually is most likely to have an informal organizational culture.

Answer: TRUE Difficulty: 1: Easy Chapter: 3 Skill: Concept LO: 3-1: To understand how culture affects all aspects of international management AACSB: Diverse and multicultural work environments 76) Parochialism describes the attitude of those who operate from the assumption that their ways of doing things are best.

Answer: FALSE Difficulty: 1: Easy Chapter: 3 Skill: Concept LO: 3-1: To understand how culture affects all aspects of international management AACSB: Diverse and multicultural work environments 77) Contingency management requires managers to adapt to the local environment and people, and to manage accordingly.

Answer: TRUE Difficulty: 1: Easy Chapter: 3 Skill: Concept LO: 3-1: To understand how culture affects all aspects of international management AACSB: Diverse and multicultural work environments 78) Values are a society's ideas about what is good or bad.

Answer: TRUE Difficulty: 1: Easy Chapter: 3 Skill: Concept LO: 3-2: To be able to distinguish the major value dimensions that define cultural differences among societies or groups AACSB: Diverse and multicultural work environments

25 .

79) Values determine how individuals will probably respond in any given circumstance.

Answer: TRUE Difficulty: 1: Easy Chapter: 3 Skill: Concept LO: 3-2: To be able to distinguish the major value dimensions that define cultural differences among societies or groups AACSB: Application of knowledge 80) According to the GLOBE project team, highly assertive societies emphasize loyalty and solidarity.

Answer: FALSE Difficulty: 1: Easy Chapter: 3 Skill: Concept LO: 3-2: To be able to distinguish the major value dimensions that define cultural differences among societies or groups AACSB: Diverse and multicultural work environments 81) Future-oriented societies tend to place more emphasis on instant gratification.

Answer: FALSE Difficulty: 2: Moderate Chapter: 3 Skill: Concept LO: 3-2: To be able to distinguish the major value dimensions that define cultural differences among societies or groups AACSB: Diverse and multicultural work environments 82) According to the GLOBE project team, Russia and Argentina, that tend to plan more in the shorter term and place more emphasis on instant gratification.

Answer: TRUE Difficulty: 1: Easy Chapter: 3 Skill: Concept LO: 3-2: To be able to distinguish the major value dimensions that define cultural differences among societies or groups AACSB: Diverse and multicultural work environments

26 .

83) According to the GLOBE project team, the Philippines, Ireland, Malaysia, and Egypt, indicate a focus on sympathy and support for vulnerable members of society, so they rank low on the humane orientation cultural dimension.

Answer: FALSE Difficulty: 2: Moderate Chapter: 3 Skill: Concept LO: 3-2: To be able to distinguish the major value dimensions that define cultural differences among societies or groups AACSB: Diverse and multicultural work environments 84) Multinational corporations may find it less risky and more profitable to expand into more similar cultures rather than those which are drastically different.

Answer: TRUE Difficulty: 1: Easy Chapter: 3 Skill: Concept LO: 3-2: To be able to distinguish the major value dimensions that define cultural differences among societies or groups AACSB: Diverse and multicultural work environments 85) Most researchers feel that there is not a relationship between geographic cultural clusters and their similar economic systems, histories, or environmental characteristics.

Answer: FALSE Difficulty: 1: Easy Chapter: 3 Skill: Concept LO: 3-2: To be able to distinguish the major value dimensions that define cultural differences among societies or groups AACSB: Diverse and multicultural work environments 86) In countries that display low power distance employees acknowledge the boss's authority simply by respecting that individual's formal position in the hierarchy, and they seldom bypass the chain of command.

Answer: FALSE Difficulty: 1: Easy Chapter: 3 Skill: Concept LO: 3-2: To be able to distinguish the major value dimensions that define cultural differences among societies or groups AACSB: Diverse and multicultural work environments

27 .

87) Countries with a high level of uncertainty avoidance (such as Japan, Portugal, and Greece) tend to have strict laws and procedures to which their people adhere closely, and a strong sense of nationalism prevails.

Answer: TRUE Difficulty: 2: Moderate Chapter: 3 Skill: Concept LO: 3-2: To be able to distinguish the major value dimensions that define cultural differences among societies or groups AACSB: Diverse and multicultural work environments 88) Cultures that score low on uncertainty avoidance tend to be less open to change and new ideas.

Answer: FALSE Difficulty: 1: Easy Chapter: 3 Skill: Concept LO: 3-2: To be able to distinguish the major value dimensions that define cultural differences among societies or groups AACSB: Diverse and multicultural work environments 89) Achievement and personal capabilities are valued in individualistic societies.

Answer: TRUE Difficulty: 2: Moderate Chapter: 3 Skill: Concept LO: 3-2: To be able to distinguish the major value dimensions that define cultural differences among societies or groups AACSB: Diverse and multicultural work environments 90) In collectivist societies, competition for resources is the norm, and those who compete best are rewarded financially.

Answer: FALSE Difficulty: 1: Easy Chapter: 3 Skill: Concept LO: 3-2: To be able to distinguish the major value dimensions that define cultural differences among societies or groups AACSB: Diverse and multicultural work environments

28 .

91) In highly masculine societies, social gender roles are distinct such that women are expected to be assertive, tough, and focused on material success; men are supposed to be more modest, tender, and concerned with the quality of life.

Answer: FALSE Difficulty: 1: Easy Chapter: 3 Skill: Concept LO: 3-2: To be able to distinguish the major value dimensions that define cultural differences among societies or groups AACSB: Diverse and multicultural work environments 92) Assertiveness and materialism are values of a feminine society.

Answer: FALSE Difficulty: 1: Easy Chapter: 3 Skill: Concept LO: 3-2: To be able to distinguish the major value dimensions that define cultural differences among societies or groups AACSB: Diverse and multicultural work environments 93) In specific-oriented cultures, work spills over into personal relationships and vice versa.

Answer: FALSE Difficulty: 1: Easy Chapter: 3 Skill: Concept LO: 3-2: To be able to distinguish the major value dimensions that define cultural differences among societies or groups AACSB: Diverse and multicultural work environments 94) In an ascription-oriented society, people ascribe status based on class, age, gender, and so on; one is more likely to be born into a position of influence.

Answer: TRUE Difficulty: 2: Moderate Chapter: 3 Skill: Concept LO: 3-2: To be able to distinguish the major value dimensions that define cultural differences among societies or groups AACSB: Diverse and multicultural work environments

29 .

95) In an achievement society, the source of status and influence is based on individual achievement—how well one performs the job and what level of education and experience one has to offer.

Answer: TRUE Difficulty: 1: Easy Chapter: 3 Skill: Concept LO: 3-2: To be able to distinguish the major value dimensions that define cultural differences among societies or groups AACSB: Diverse and multicultural work environments 96) Cultural values and attitudes can be transmitted through a variety of sources including parents, teachers, friends, government leaders, movies, television, and the Internet.

Answer: TRUE Difficulty: 1: Easy Chapter: 3 Skill: Concept LO: 3-3: To understand the interaction between culture and the use of the Internet AACSB: Information technology 97) The Internet and other communications technologies imply greater likelihood of crosscultural miscommunications and blunder.

Answer: TRUE Difficulty: 1: Easy Chapter: 3 Skill: Concept LO: 3-3: To understand the interaction between culture and the use of the Internet AACSB: Information technology 98) For Germans, work lives and private lives are much more closely integrated than those of Westerners, so they emphasize enjoying life and have a more relaxed attitude toward work.

Answer: FALSE Difficulty: 1: Easy Chapter: 3 Skill: Concept LO: 3-4: To be able to develop a working cultural profile typical of many people within a certain society as an aid to anticipating attitudes toward work, negotiations and so on AACSB: Diverse and multicultural work environments 99) Language is one of the strongest elements of Brazil's national unity. Nearly 100 percent of the population speaks Spanish.

Answer: FALSE Difficulty: 1: Easy Chapter: 3 Skill: Application LO: 3-5: To gain some insight into different management styles around the world AACSB: Written and oral communication 30 .

100) What is convergence?

Answer: Convergence describes the phenomenon of the shifting of individual management styles to become more similar to one another. The convergence argument is based on the belief that the demands of industrialization, worldwide coordination, and competition tend to factor out differences in organizational-level processes, such as choice of technology and structure.

Difficulty: 1: Easy Chapter: 3 Skill: Concept LO: 3-1: To understand how culture affects all aspects of international management AACSB: Diverse and multicultural work environments 101) What is the difference between parochialism and ethnocentrism?

Answer: Parochialism occurs when a Frenchman, for example, expects those from or in another country to automatically fall into patterns of behavior common in France. Ethnocentrism describes the attitude of those who operate from the assumption that their ways of doing things are best–no matter where or under what conditions they are applied.

Difficulty: 1: Easy Chapter: 3 Skill: Concept LO: 3-1: To understand how culture affects all aspects of international management AACSB: Diverse and multicultural work environments 102) What is contingency management, and why is it important?

Answer: Contingency management requires managers to adapt to the local environment and people and manage accordingly. That adaptation can be complex because the manager may confront differences not only in culture but also in business practices.

Difficulty: 1: Easy Chapter: 3 Skill: Concept LO: 3-1: To understand how culture affects all aspects of international management AACSB: Diverse and multicultural work environments

31 .

103) In reference to the GLOBE cultural dimensions, what does the performance orientation dimension measure? Which countries score high and low in performance orientation?

Answer: The performance orientation dimension measures the importance of performance improvement and excellence in society, and refers to whether or not people are encouraged to strive for continued improvement. Singapore, Hong Kong, and the United States score high on this dimension; typically, this means that people tend to take initiative and have a sense of urgency, and have the confidence to get things done. Countries like Russia and Italy have low scores on this dimension; they hold other priorities ahead of performance, such as tradition, loyalty, family, and background; and they associate competition with defeat.

Difficulty: 2: Moderate Chapter: 3 Skill: Concept LO: 3-2: To be able to distinguish the major value dimensions that define cultural differences among societies or groups AACSB: Diverse and multicultural work environments 104) According to Hofstede, what is the relationship between individualism and national economic performance?

Answer: Hofstede's research indicates strongly that individualistic cultures tend to have both a higher gross national product and a freer political system than those countries scoring low on individualism. There is a strong relationship among individualism, wealth, and a political system with balanced power.

Difficulty: 3: Challenging Chapter: 3 Skill: Concept LO: 3-2: To be able to distinguish the major value dimensions that define cultural differences among societies or groups AACSB: Diverse and multicultural work environments 105) What are the four culturally based variables that may cause frequent problems for Americans in international management?

Answer: The four common, culturally based variables that may cause frequent problems for American managers are time, change, material factors, and individualism.

Difficulty: 1: Easy Chapter: 3 Skill: Concept LO: 3-2: To be able to distinguish the major value dimensions that define cultural differences among societies or groups AACSB: Diverse and multicultural work environments

32 .

106) Differentiate between the characteristics of a universalist culture and a particularist culture?

Answer: A universalist culture applies rules and systems objectively without consideration for individual circumstances. In contrast, a particularist culture gives more weight to relationships and is more subjective.

Difficulty: 2: Moderate Chapter: 3 Skill: Concept LO: 3-2: To be able to distinguish the major value dimensions that define cultural differences among societies or groups AACSB: Diverse and multicultural work environments 107) Discuss the impact of the Internet on various cultures. How do cultural differences complicate international management in regard to the use of technology? Provide specific examples in your answer.

Answer: The Internet has affected many social variables, such as associations, education, and the economy. At the same time that the Internet is affecting culture, culture is also affecting how the Internet is used. One of the pervasive ways that culture is determining how the Internet may be used in various countries is through the local attitude to information privacy. Generally in Europe, each person must be informed and given the chance to object, if the information about that person is going to be used for direct marketing purposes or released to another party. That data cannot be used for secondary purposes, if the consumer objects. In the United States, personal data is collected and sold without government oversight. Differing cultures means that international managers will often need to "localize" their use of IT to different value sets about its use. This advice applies in particular to the many e-commerce companies doing business overseas. With 75 percent of the world's Internet market living outside the United States, multinational e-businesses are learning the hard way that their Web sites must reflect local markets, customs, languages, and currencies to be successful in foreign markets. Different legal systems, financial structures, tastes, and experiences necessitate attention to every detail to achieve global appeal. In other words, e-businesses must localize to globalize, which means much more than translating online content into local languages.

Difficulty: 3: Challenging Chapter: 3 Skill: Synthesis LO: 3-3: To understand the interaction between culture and the use of the Internet AACSB: Diverse and multicultural work environments

33 .

108) What types of behavior by international managers would most likely be offensive in Saudi Arabia?

Answer: • Using disparaging or swear words and off-color or obscene attempts at humor.

• Engaging in conversations on religion, politics, or Israel.

• Bringing gifts of alcohol or using alcohol, which is prohibited in Saudi Arabia.

• Requesting favors from those in authority or esteem, for it is considered impolite for Arabs to say no.

• Introducing business subjects too soon.

• Pointing your finger at someone or showing the soles of your feet when seated.

Difficulty: 2: Moderate Chapter: 3 Skill: Concept LO: 3-4: To be able to develop a working cultural profile typical of many people within a certain society as an aid to anticipating attitudes toward work, negotiations and so on AACSB: Diverse and multicultural work environments 109) An international manager can best develop an understanding of a particular culture by ________.

A) creating a cultural profile for that country or region in which the firm does business B) assuming that his or her own cultural styles and practices can be successfully followed in the host country C) using stereotypes to develop cross-cultural understanding in a business setting D) hiring locals rather than expatriates for management positions in overseas subsidiaries Answer: A Difficulty: 3: Challenging Chapter: 3 Skill: Concept LO: 3-5: To gain some insight into different management styles around the world AACSB: Diverse and multicultural work environments

34 .

110) Discuss some of the business and economic implications of the religion of Islam.

Answer: Religion appears to have an effect on economic and business activities. Islam encourages free trade through rules that prohibit restraints on market-based exchange, such as monopolies and price fixing. Islam encourages the free flow of information that facilitates efficient demand and supply. The Qur'an condemns charging interest for money loaned. Thus, banks in Islamic countries have devised methods for financing debt without violating Sharia law.

The Qur'an prohibits drinking alcohol, gambling, and showing too much skin. These restrictions affect firms that deal in alcoholic beverages, resorts, entertainment, and women's clothing. Many multinational firms are reaching out to Muslim communities. Nokia launched a mobile phone application that shows Muslims the direction toward Mecca, Islam's holiest site, when they pray.

Heineken, the Dutch brewing giant, rolled out the nonalcoholic malt drink Fayrouz for the Islamic market. In general, MNEs are allowed to operate as long as they abide by Sharia law, do not exploit people, and earn profits fairly.

Difficulty: 3: Challenging Chapter: 3 Skill: Concept LO: 3-5: To gain some insight into different management styles around the world AACSB: Diverse and multicultural work environments

35 .

International Management, 10e, (Deresky/Miller) Chapter 4 Communicating Across Cultures 1) ________ describes the process of transmitting information through media such as words, behavior, or material artifacts, to assist in decision making.

A) Ethics B) Communication C) Planning D) Strategy Answer: B Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-1: To recognize the communication process and how cultural differences can cause noise in that process AACSB: Written and oral communication 2) Communication to managers is of vital importance because it ________.

A) demonstrates the manager's depth of knowledge B) immediately results in an increase of revenue C) indicates technological advancement D) greatly helps in negotiating future plans Answer: D Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-1: To recognize the communication process and how cultural differences can cause noise in that process AACSB: Written and oral communication 3) Which of the following does NOT constitute a normal interpersonal communication task for managers?

A) coordinating activities B) disseminating information C) motivating employees D) giving speeches at conferences Answer: D Difficulty: 2: Moderate Chapter: 4 Skill: Concept LO: 4-1: To recognize the communication process and how cultural differences can cause noise in that process AACSB: Written and oral communication

1 .

4) John sent an email requesting George to join him in the conference room at 4 P.M. and to bring the final report on the building's floor plans. However, George's secretary skips reading the entire email and simply informs George to join John in the conference room at 4 P.M. This is an example of ________.

A) ambiguity B) divergence C) noise D) feedback Answer: C Difficulty: 1: Easy Chapter: 4 Skill: Application LO: 4-1: To recognize the communication process and how cultural differences can cause noise in that process AACSB: Analytical thinking; Written and oral communication 5) Anything that disrupts the communication process is known as ________.

A) noise B) encoded message C) decoded message D) feedback Answer: A Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-1: To recognize the communication process and how cultural differences can cause noise in that process AACSB: Written and oral communication 6) Which of the following is the primary cause of noise in the communication process?

A) a lack of cultural empathy B) poor listening skills C) the technology used in the medium of communication D) the difference between sender and receiver's life space Answer: D Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-1: To recognize the communication process and how cultural differences can cause noise in that process AACSB: Written and oral communication

2 .

7) Accurate interpersonal communication occurs when the message ________ by the sender is ________ by the receiver.

A) sent; received B) intended; understood C) implied; accepted D) encoded; decoded Answer: B Difficulty: 2: Moderate Chapter: 4 Skill: Concept LO: 4-1: To recognize the communication process and how cultural differences can cause noise in that process AACSB: Analytical thinking 8) Which of the following terms refers to any cultural variables that undermine the communication of intended meaning?

A) cultural ethics B) cultural empathy C) cultural noise D) cultural attribution Answer: C Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-1: To recognize the communication process and how cultural differences can cause noise in that process AACSB: Written and oral communication 9) Intercultural communication most likely occurs when ________.

A) messages are transmitted between members of the same culture B) a member of one culture sends a message to a member of another culture C) people from one culture migrate to another region D) the communication process between two cultures is hindered Answer: B Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-1: To recognize the communication process and how cultural differences can cause noise in that process AACSB: Written and oral communication

3 .

10) ________ is the process in which people look for the explanation of another person's behavior.

A) Attribution B) Dissonance C) Miscommunication D) Affirmation Answer: A Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-1: To recognize the communication process and how cultural differences can cause noise in that process AACSB: Written and oral communication 11) According to Hall and Hall, when people experience a failure in communication, they tend to blame the confusion on the other person's stupidity, deceit, or craziness. This process of trying to explain the other person's behavior is known as ________.

A) cultural noise B) attribution C) stereotyping D) kinesic behavior Answer: B Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-1: To recognize the communication process and how cultural differences can cause noise in that process AACSB: Written and oral communication 12) Trust improves cross-cultural communication by ________.

A) making sure that all of the business transactions are based on arm's-length relationships B) replacing formal legal contracts for global firms C) encouraging the open exchange of ideas and information D) helping people plan for known circumstances Answer: C Difficulty: 3: Challenging Chapter: 4 Skill: Concept LO: 4-1: To recognize the communication process and how cultural differences can cause noise in that process AACSB: Written and oral communication

4 .

13) Which of the following will help an international business manager cultivate trust in crosscultural communications?

A) staying away from conflicts that need to be addressed B) making communications as formal as possible and refraining from open communications C) socializing when possible and making friendly contacts with persons involved D) establishing trust and achieving hidden agenda without being conspicuous Answer: C Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-1: To recognize the communication process and how cultural differences can cause noise in that process AACSB: Written and oral communication 14) According to the GLOBE project, workers from countries that ranked high on performance orientation, e.g., the United States, ________.

A) do not take hard facts and figures seriously B) prefer direct and explicit communication C) make avoiding conflict a priority D) do not encourage friendly relationships Answer: B Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-1: To recognize the communication process and how cultural differences can cause noise in that process AACSB: Written and oral communication 15) According to the GLOBE project, a coworker or subordinate from Sweden, a country ranking low on assertiveness, would most likely recoil from ________.

A) explicitness in communication B) a two-way dialogue C) a gift exchange before talking business D) a direct approach along with facts and figures Answer: A Difficulty: 2: Moderate Chapter: 4 Skill: Concept LO: 4-1: To recognize the communication process and how cultural differences can cause noise in that process AACSB: Written and oral communication

5 .

16) Brenda is the head of a sports firm in Sweden. In order to communicate effectively with her workers, Brenda should ________.

A) build friendly relationships and encourage two way discourse B) communicate information in a direct and explicit way C) communicate information with facts and figures D) exchange gifts with her employees frequently Answer: A Difficulty: 2: Moderate Chapter: 4 Skill: Application LO: 4-1: To recognize the communication process and how cultural differences can cause noise in that process AACSB: Written and oral communication 17) Tom manages a U.S. pharmaceutical subsidiary located in Ireland. In order to communicate effectively with Irish employees and improve their productivity, Tom should ________.

A) emphasize achieving objective end results B) challenge the employees to perform better C) provide positive support to employees D) address conflicts during group meetings Answer: C Difficulty: 2: Moderate Chapter: 4 Skill: Application LO: 4-1: To recognize the communication process and how cultural differences can cause noise in that process AACSB: Analytical thinking 18) Which of the following is true about language?

A) Language does not entail facial expressions and gestures.

B) National languages, dialects, and translation facilitate straightforward communication.

C) Language has both verbal and nonverbal characteristics.

D) Business jargons are common across cultures.

Answer: C Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Written and oral communication

6 .

19) Communication senders and receivers from different cultures use ________ to encode or decode the message.

A) perceptions B) filters C) written tools D) media Answer: B Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Written and oral communication 20) Which of the following terms is used to refer to the positive or negative evaluations, feelings, and tendencies that individuals harbor toward objects or concepts and affects the communication process?

A) customs B) attitudes C) traditions D) values Answer: B Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Written and oral communication 21) Which of the following is defined as a group of people who share a unique way of life within a larger, dominant culture?

A) macroculture B) subculture C) cultural universal D) monoculture Answer: B Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Diverse and multicultural work environments

7 .

22) The Topangins are a minority group in the Canary Island, with a set of preferences, attitudes, and taboos, distinct from that of the national culture. Therefore, they are often overlooked when foreign businesses choose to customize their products for the inhabitants of the islands. The community is an example of ________.

A) cultural universal B) monoculture C) subculture D) stratification Answer: C Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Analytical thinking 23) In an interview, a British journalist asked a German athlete, "Are you a typical German?"

When asked to clarify, the journalist explained that a typical German loved machines, worked hard, and was dependable. This is an example of ________.

A) cultural noise B) discrimination C) kinesic behavior D) stereotyping Answer: D Difficulty: 1: Easy Chapter: 4 Skill: Application LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Analytical thinking 24) Which of the following is one of the reasons that language frequently causes miscommunication during international business situations?

A) frequent use of hand gesture with explanations B) translating a local language too literally C) speaking the local language with a native accent D) conveying facts while using appropriate body language or symbols Answer: B Difficulty: 2: Moderate Chapter: 4 Skill: Concept LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Written and oral communication

8 .

25) ________ are letters, figures, colors, or other characters that communicate a meaning.

A) Rituals B) Symbols C) Norms D) Customs Answer: B Difficulty: 1: Easy Chapter: 4 Skill: Application LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Application of knowledge 26) Understanding foreign languages is especially important for international managers because of ________.

A) increased diversity in the global workforce B) reduced incidence of outsourcing C) dominance of English in business communication D) decline in the status of the United States as a superpower Answer: A Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Written and oral communication 27) ________ refers to behavior that communicates without words.

A) Thought patterns B) Nonverbal communication C) Intrapersonal communication D) Cultural noise Answer: B Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Written and oral communication

9 .

28) ________ is one of the elements of nonverbal communication.

A) Ethnicity B) Gender C) Kinesic behavior D) Language Answer: C Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Written and oral communication 29) Jordan is employed in an American investment firm and is currently working with Japanese clients on a new project. He uses a lot of hand gestures during meetings which his clients find very distracting and rude. This has also led to many misunderstandings between Jordan and his Japanese clients in the recent past. Which of the following best describes such a situation?

A) risk aversion B) organizational anarchy C) cross-cultural risk D) acculturation Answer: C Difficulty: 2: Moderate Chapter: 4 Skill: Application LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Written and oral communication 30) Posture, gestures, facial expressions, and eye contact are examples of ________.

A) kinesic behavior B) proxemics C) paralanguage D) object language Answer: A Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Written and oral communication

10 .

31) Which of the following is a true statement regarding kinesic behavior?

A) Facial expressions have the same meaning across cultures.

B) Minor variations in body language are insignificant.

C) Hand gestures are universally interpreted.

D) The meaning of body movements varies by culture.

Answer: D Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Written and oral communication 32) Subtle differences in eye behavior are known as ________.

A) proxemics B) tics C) stereotypes D) oculesics Answer: D Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Written and oral communication 33) The tendency of Americans to look people in the eye contrasts with the tendency of the British to keep looking away while conversing. Such differences are categorized as ________.

A) oculesics B) proxemics C) paralanguage D) object language Answer: A Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Written and oral communication

11 .

34) During a business meeting in the United States, a relaxed posture is acceptable, but in Europe or Asia such body language would most likely be interpreted as ________.

A) personal space invasion B) rudeness C) curiosity D) reluctance Answer: B Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Written and oral communication 35) Which of the following terms refers to the influence of closeness and space on communication?

A) oculesics B) kinesics C) aesthetics D) proxemics Answer: D Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Written and oral communication 36) A ________ culture is characterized by people standing close together and touching a great deal.

A) low-contact B) monochronic C) high-contact D) polychronic Answer: C Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Diverse and multicultural work environments

12 .

37) Which of the following will a person working in a high-contact culture most likely experience?

A) coworkers spending time together socially B) managers using hand motions to express emotion C) managers bowing to their seniors as a token of respect D) coworkers putting an arm over their colleague's back Answer: D Difficulty: 2: Moderate Chapter: 4 Skill: Application LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Diverse and multicultural work environments 38) Which of the following is an example of proxemics?

A) using facial expressions B) standing close to others C) speaking quickly D) using a translator Answer: B Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Diverse and multicultural work environments 39) Josh, a tourist from the United States, goes on a five-day trip to Japan. Apart from learning their rich history and heritage, he notices that people do not shake hands, but bow to each other.

He is most likely to conclude that the Japanese have a ________.

A) low-context culture B) monotheistic culture C) polychronic culture D) low-contact culture Answer: D Difficulty: 1: Easy Chapter: 4 Skill: Application LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Diverse and multicultural work environments

13 .

40) Which of the following would most likely occur in a low-contact culture?

A) colleagues greeting each other by formal touch B) colleagues standing close to each other C) colleagues maintaining a respectful distance while greeting each other D) colleagues greeting each other by giving a peck on the cheek Answer: C Difficulty: 2: Moderate Chapter: 4 Skill: Concept LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Diverse and multicultural work environments 41) The culture of which of the following countries has a close conversational distance?

A) Russia B) Sweden C) Brazil D) United States Answer: C Difficulty: 1: Easy Chapter: 4 Skill: Application LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Diverse and multicultural work environments 42) ________ refers to how something is said rather than the content—i.e., the rate of speech, the tone and inflection of voice, other noises, laughing, or yawning.

A) Proxemics B) Paralanguage C) Object language D) Kinesic behavior Answer: B Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Written and oral communication

14 .

43) Which of the following is an element of paralanguage?

A) hand gesture B) body posture C) yawning D) personal touch Answer: C Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Written and oral communication 44) Changing the meaning of words by changing the inflection of your voice is an example of ________.

A) paralanguage B) object language C) proxemics D) oculesics Answer: A Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Written and oral communication 45) The considerable variation between Americans and Chinese in the use of silence during meetings is an aspect of ________.

A) proxemics B) haptics C) paralanguage D) object language Answer: C Difficulty: 2: Moderate Chapter: 4 Skill: Concept LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Written and oral communication

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46) The manner in which people communicate through material artifacts such as architecture, office design, and cars is known as ________.

A) object language B) oculesics C) paralanguage D) proxemics Answer: A Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Written and oral communication 47) Which of the following is true about monochronic and polychronic cultures?

A) Monochronic cultures experience time in a linear way; polychronic cultures view time as having a past, present, and future.

B) Monochronic cultures treat time as a tool for bringing order to life; polychronic cultures tolerate many events occurring simultaneously.

C) Monochronic cultures experience time in a nonlinear way; polychronic cultures focus on only one single event at a time.

D) Monochronic cultures tolerate many events occurring simultaneously; polychronic cultures treat time as a tool for bringing order to life.

Answer: B Difficulty: 2: Moderate Chapter: 4 Skill: Concept LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Diverse and multicultural work environments 48) Which of the following is a characteristic of a person in a monochronic culture?

A) considers time to be flexible B) adheres to plan commitments C) focuses on multiple tasks at a time D) is accustomed to long-term relationships Answer: B Difficulty: 2: Moderate Chapter: 4 Skill: Concept LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Written and oral communication

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49) Which of the following is a true statement about polychronic cultures?

A) Time serves to order life into compartments.

B) People in polychronic cultures focus on only one task at a time.

C) Polychronic people focus on relationships rather than material systems.

D) Polychronic people are highly driven to complete tasks by assigned deadlines.

Answer: C Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Diverse and multicultural work environments 50) Classified and compartmentalized, time serves to order life in a ________.

A) monochronic culture B) low-contact culture C) high-contact culture D) polychronic culture Answer: A Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Diverse and multicultural work environments 51) Carlos has an appointment with Josefa in a half hour at his office. However, Carlos decides to take care of some personal errands on his way to the office and informs Josefa. Carlos does not make it on time for the appointment. Josefa most likely concludes that Carlos is from a ________.

A) high-context culture B) low-context culture C) monochronic culture D) polychronic culture Answer: D Difficulty: 2: Moderate Chapter: 4 Skill: Application LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Diverse and multicultural work environments; Written and oral communication

17 .

52) Which of the following countries exhibit a high-context culture?

A) Japan B) Germany C) The United States of America D) Switzerland Answer: A Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Diverse and multicultural work environments 53) Saudi Arabia is a country characterized by a high-context culture. This implies that ________.

A) the people of Saudi Arabia tend to conduct negotiations as efficiently as possible B) the people of Saudi Arabia tend to use legalistic contracts to conclude agreements C) business is primarily deal-oriented in Saudi Arabia D) personal relations and goodwill are valued in Saudi Arabia Answer: D Difficulty: 2: Moderate Chapter: 4 Skill: Concept LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Diverse and multicultural work environments 54) Low-context cultures tend to ________.

A) emphasize nonverbal messages B) information processes tend to be more formal C) view communication as a means to promote smooth, harmonious relationships D) prefer an indirect and polite face-saving style of communication Answer: B Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Diverse and multicultural work environments

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55) Low-context cultures are characterized by ________.

A) a high degree of sensitivity to the context B) a high degree of mutual respect C) controlled information flows D) complex rituals Answer: C Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Diverse and multicultural work environments 56) In polychronic cultures, ________.

A) members are easily distracted and are inclined to do many tasks at once B) people view time as linear and punctuality as a virtue C) managers make commitments, set deadlines, and adhere to a strict schedule of meetings and activities D) managers and investors are impatient and want quick returns Answer: A Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Diverse and multicultural work environments 57) Which of the following is a characteristic of a person from a polychronic culture?

A) focuses only on one thing at a time B) changes plans frequently C) adheres to time commitments D) is accustomed to short-term relationships Answer: B Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Diverse and multicultural work environments; Written and oral communication

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58) Which of the following situations illustrate a polychronic perspective?

A) When an American talks to a Latin American, he or she may unconsciously back up to maintain personal space.

B) In Islamic countries close interaction between men and women is not encouraged in public places.

C) Latin Americans have a flexible perception of time and may not arrive exactly at the predetermined time for appointments.

D) People in young countries like Australia, Canada, and the United States are relatively focused on schedules, punctuality, and time as a resource.

Answer: C Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Diverse and multicultural work environments 59) Which of the following is the most accurate statement concerning the role of context in cross-cultural communication?

A) In high-context cultures, the message is implicit; in low-context cultures, the message is explicit.

B) In high-context cultures, there is a low sensory involvement; in low-context cultures, there is a high sensory involvement.

C) In high-context cultures, many tasks are handled simultaneously; in low-context cultures, only one task is handled at a time.

D) In high-context cultures, work time is flexible; in low-context cultures, work time is not flexible.

Answer: A Difficulty: 3: Challenging Chapter: 4 Skill: Concept LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Diverse and multicultural work environments 60) In high-context cultures, ________.

A) feelings and thoughts are not explicitly expressed B) information is readily shared C) people have high sensory involvement D) nonverbal communication is not important Answer: A Difficulty: 2: Moderate Chapter: 4 Skill: Concept LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Diverse and multicultural work environments 20 .

61) In ________ cultures, people expect others to understand unarticulated moods, subtle gestures, and environmental clues.

A) high-contact B) low-contact C) high-context D) monochronic Answer: C Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Diverse and multicultural work environments 62) Which of the following is true about high-context cultures?

A) One has to "read between the lines" and interpret meaning from one's general understanding.

B) Communication media is entirely explicit and information is readily available.

C) People convey their thoughts and plans in a direct, straightforward communication style.

D) People are talkative, obvious, and redundant.

Answer: A Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Diverse and multicultural work environments 63) In ________ cultures, communication occurs within an extensive network of close personal and business relationships.

A) high-contact B) monochronic C) high-context D) low-contact Answer: C Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Diverse and multicultural work environments

21 .

64) Which of the following is most likely a characteristic of low-context cultures?

A) Work and social relationships are inseparable.

B) Individuals base meaning on subtle gestures.

C) Individuals must read between the lines.

D) Feelings and thoughts are expressed in words.

Answer: D Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Diverse and multicultural work environments 65) The executives from Carlo Foods, United States, are in Japan to negotiate with Jeong, the head of a local investment firm. While Jeong listens to their plans, he realizes that there are considerable amounts of calculation errors in the market statistics involved in the plan. He starts showing signs of impatience and folds his hands, with a frown on his face. The executives realize that something is wrong and are confused about it. Jeong most likely belongs to a ________.

A) low-contact culture B) high-context culture C) high power-distance culture D) polychronic culture Answer: B Difficulty: 3: Challenging Chapter: 4 Skill: Application LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Diverse and multicultural work environments; Written and oral communication 66) The international business manager of Toro Automobiles, based in London, is currently in Indonesia negotiating with potential partners to set up a manufacturing plant. He is intrigued and startled by the lack of apprehension shown by every person he has met in standing close to him when greeting him. This is because the persons or the groups involved in the meeting are a part of a ________.

A) low-context culture B) polychronic culture C) high-context culture D) high-contact culture Answer: D Difficulty: 3: Challenging Chapter: 4 Skill: Application LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Diverse and multicultural work environments 22 .

67) Advertising themes often convey unfavorable and embarrassing interpretations. This is most likely because ________.

A) popular slogans used in international advertising do not use idiomatic expressions B) advertising themes often lose their original meaning in translation or give the wrong impression C) language is rarely subtle D) colloquial expressions are more likely than not to puzzle native speakers Answer: B Difficulty: 2: Moderate Chapter: 4 Skill: Application LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Written and oral communication 68) Al Razim, a construction engineer, recently traveled to Germany in order to find investors for his real-estate project. While he finally succeeded in getting an investor, he was surprised by the explicitness of the Germans. Sometimes all he got was a direct "No." This is because Germans are a ________ culture.

A) polychronic B) high-context C) low-context D) high-contact Answer: C Difficulty: 3: Challenging Chapter: 4 Skill: Application LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Diverse and multicultural work environments 69) Which of the following is most likely a characteristic of communication channels in lowcontext cultures?

A) rapid spread of information B) informal flow of information C) upward flow of information D) controlled flow of information Answer: D Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Written and oral communication

23 .

70) The Japanese preference for humanity, reciprocity, and analytic logic is known as ________.

A) kieretsu B) ringi-sho C) ningensei D) allogato Answer: C Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Diverse and multicultural work environments 71) Which of the following is a characteristic of the Japanese ningensei style?

A) reciprocity B) explicitness C) verbal agility D) immediate feedback Answer: A Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Diverse and multicultural work environments 72) Larry is a top-level manager at Smart-Tech, an American semiconductor firm. Larry is involved in the negotiation procedures between Smart-Tech and a Saudi Arabian financial group.

Larry has recently arrived in Saudi Arabia for the purpose of negotiating the final terms of the contract. Which of the following statements undermines the argument that Larry should adhere to a strict agenda when negotiating with the Arabs?

A) Both Saudi Arabia and the United States are low-contact cultures.

B) Both Saudi Arabia and the United States are high-contact cultures.

C) Saudi Arabia is a polychronic culture.

D) Saudi Arabia is a monochronic culture.

Answer: C Difficulty: 3: Challenging Chapter: 4 Skill: Application LO: 4-4: To learn how to successfully manage cross-cultural business communications successfully AACSB: Diverse and multicultural work environments; Written and oral communication

24 .

73) As manager with an international trade firm, John Smith frequently travels between Europe and Saudi Arabia. On John's most recent trip to Saudi Arabia, he noticed that Tariq, his business associate, not only talked about business matters but also talked about several other things, such as upcoming events in Saudi Arabia and the associated impact on the economy. This most likely indicates that Tariq is from a ________.

A) low-contact culture B) polychronic culture C) low-context culture D) high power-distance culture Answer: B Difficulty: 3: Challenging Chapter: 4 Skill: Application LO: 4-4: To learn how to successfully manage cross-cultural business communications successfully AACSB: Diverse and multicultural work environments 74) Larry is a top-level manager at Smart-Tech, an American semiconductor firm. Larry is involved in the negotiation procedures between Smart-Tech and a Saudi Arabian financial group.

Larry arrives in Saudi Arabia hoping to quickly conclude the business deal. However, to his surprise the Arabs show no great interest in coming to a decision, despite several rounds of discussion. This type of behavior from the Saudi Arabian financial group is most likely attributed towards its ________.

A) high-context culture B) monotheistic culture C) monochronic culture D) low-contact culture Answer: A Difficulty: 3: Challenging Chapter: 4 Skill: Application LO: 4-4: To learn how to successfully manage cross-cultural business communications successfully AACSB: Diverse and multicultural work environments; Written and oral communication

25 .

75) Jerry, representing a U.S firm, is sent to Saudi Arabia to negotiate his company's contracts.

Which of the following should Jerry keep in mind when negotiating with the Arabs?

A) Business should be conducted personally and not via telephone or email.

B) Arabs value time, and deadlines are to be kept at all costs.

C) Be explicit and express doubts wherever the subject's feasibility comes into question.

D) Get to the point when presenting and negotiating.

Answer: A Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-4: To learn how to successfully manage cross-cultural business communications successfully AACSB: Diverse and multicultural work environments; Analytical thinking 76) Which of the following tips is most likely to lead to effective intercultural communication?

A) Avoid being culturally sensitive over the Internet, as it might result in discrimination.

B) It is always better to use long and descriptive sentences.

C) Messages need to be encoded carefully.

D) Communication processes should be made quicker by removing feedback systems.

Answer: C Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-4: To learn how to successfully manage cross-cultural business communications successfully AACSB: Written and oral communication 77) ________ involves translating the intended meaning of the message into symbols for appropriate cross cultural communication.

A) Careful encoding B) Selective transmission C) Careful decoding D) Soliciting feedback Answer: A Difficulty: 2: Moderate Chapter: 4 Skill: Concept LO: 4-4: To learn how to successfully manage cross-cultural business communications successfully AACSB: Written and oral communication

26 .

78) When encoding a message during cross-cultural communication, it is most effective for senders to ________.

A) use idioms and expressions B) make gestures C) rely on personal interpretations D) speak slowly and loudly in their native language Answer: B Difficulty: 2: Moderate Chapter: 4 Skill: Concept LO: 4-4: To learn how to successfully manage cross-cultural business communications successfully AACSB: Written and oral communication 79) ________ is the process of translating the received symbols into the interpreted message.

A) Decoding B) Transmitting C) Encoding D) Fragmenting Answer: A Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-4: To learn how to successfully manage cross-cultural business communications successfully AACSB: Written and oral communication 80) What is the best method for avoiding miscommunication?

A) taking detailed notes of the messages B) learning foreign phrases and idioms C) practicing projective listening D) relying on technology to interpret meanings Answer: C Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-4: To learn how to successfully manage cross-cultural business communications successfully AACSB: Written and oral communication

27 .

81) Interaction posture is defined as the ________.

A) tendency to contradict the beliefs of others B) understanding and modeling of local proxemics C) ability to respond to others in a nonjudgmental way D) capacity to be flexible to promote group communication Answer: C Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-4: To learn how to successfully manage cross-cultural business communications successfully AACSB: Written and oral communication 82) Recognizing that one's knowledge, perceptions, and beliefs are valid only for oneself and not for everyone else is known as ________.

A) other-oriented role behavior B) orientation to knowledge C) tolerance for ambiguity D) interaction posture Answer: B Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-4: To learn how to successfully manage cross-cultural business communications successfully AACSB: Written and oral communication 83) ________ and ________ are personality traits categorized as openness.

A) Persistence; resourcefulness B) Proper orientation to knowledge; internal locus of control C) Tolerance for ambiguity; extrovertedness D) Empathy; external locus of control Answer: C Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-4: To learn how to successfully manage cross-cultural business communications successfully AACSB: Written and oral communication

28 .

84) Which of the following characteristics is shared by both openness in communication and resilience in communication?

A) tolerance for ambiguity B) extrovertedness C) resourcefulness D) internal locus of control Answer: A Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-4: To learn how to successfully manage cross-cultural business communications successfully AACSB: Written and oral communication 85) Cross cultural communication involves an understanding of how people from different cultures speak, communicate, and perceive the world around them.

Answer: TRUE Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-1: To recognize the communication process and how cultural differences can cause noise in that process AACSB: Written and oral communication 86) The term "communication" is the process of gathering messages through the Internet and printed media.

Answer: FALSE Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-1: To recognize the communication process and how cultural differences can cause noise in that process AACSB: Written and oral communication 87) Anything that serves to disrupt the communication process is typically referred to as noise.

Answer: TRUE Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-1: To recognize the communication process and how cultural differences can cause noise in that process AACSB: Written and oral communication

29 .

88) Cultural noise is the cultural variables that undermine the communication of intended meaning.

Answer: TRUE Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-1: To recognize the communication process and how cultural differences can cause noise in that process AACSB: Written and oral communication 89) In intercultural communication, when a message reaches a receiver, it undergoes a transformation in which the influence of the decoder's culture becomes part of the meaning.

Answer: TRUE Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-1: To recognize the communication process and how cultural differences can cause noise in that process AACSB: Written and oral communication 90) When a member of one culture imposes his or her cultural practices on a member of another culture, cross cultural communication takes place.

Answer: TRUE Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-1: To recognize the communication process and how cultural differences can cause noise in that process AACSB: Written and oral communication 91) Attribution is the process by which people look for an explanation of another person's behavior.

Answer: TRUE Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-1: To recognize the communication process and how cultural differences can cause noise in that process AACSB: Written and oral communication

30 .

92) The secondary cause of noise is that the sender and the receiver each exists in a unique, private world thought of as her or his life space.

Answer: FALSE Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-1: To recognize the communication process and how cultural differences can cause noise in that process AACSB: Written and oral communication 93) Language has both verbal and nonverbal characteristics.

Answer: TRUE Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Written and oral communication 94) Because of increasing workforce diversity around the world, the international business manager will have to deal with a medley of languages.

Answer: TRUE Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Written and oral communication 95) High-contact cultures, preferring to stand close, touch a great deal, and experience a close sensory involvement.

Answer: TRUE Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Diverse and multicultural work environments

31 .

96) High-contact cultures are mostly located in cooler climates, and low-contact cultures in warmer climates.

Answer: FALSE Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Diverse and multicultural work environments 97) Japan and China are examples of low-context cultures.

Answer: FALSE Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Diverse and multicultural work environments 98) In high-context cultures, trust is not an important part of business dealings.

Answer: FALSE Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Diverse and multicultural work environments 99) Organizations that have high-context cultures are collectivist and focus on.

Answer: TRUE Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Diverse and multicultural work environments 100) Stereotyping occurs when a person assumes that every member of a society or subculture has the same characteristics or traits.

Answer: TRUE Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Diverse and multicultural work environments 32 .

101) Stereotyping is a common cause of misunderstanding in intercultural communication.

Answer: TRUE Difficulty: 2: Moderate Chapter: 4 Skill: Concept LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Written and oral communication 102) The Japanese believe that true intentions are not readily revealed in words or contracts but are, in fact, masked by them.

Answer: TRUE Difficulty: 2: Moderate Chapter: 4 Skill: Concept LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Diverse and multicultural work environments 103) Language is an infrequent cause of miscommunication.

Answer: FALSE Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Written and oral communication 104) The term "kinesic behavior" refers to communication through body movements—posture, gestures, facial expressions, and eye contact.

Answer: TRUE Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Written and oral communication 105) Kinesics and proxemics are elements of nonverbal communication.

Answer: TRUE Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Written and oral communication 33 .

106) Kinesics deals with the influence of space on communication—both personal space and office space or layout.

Answer: FALSE Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Written and oral communication 107) In high-contact cultures, people prefer much less sensory involvement, standing farther apart and touching far less.

Answer: FALSE Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Diverse and multicultural work environments 108) In low-contact cultures, people prefer to stand close, touch a great deal, and experience a "close" sensory involvement.

Answer: FALSE Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Diverse and multicultural work environments 109) The term "paralanguage" refers to how something is said rather than the content—i.e., the rate of speech, the tone and inflection of voice, other noises, laughing, or yawning.

Answer: TRUE Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Written and oral communication

34 .

110) The term "object language", or "material culture", refers to the value of the material artifacts given to the parties involved in order to show our goodwill.

Answer: FALSE Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Diverse and multicultural work environments 111) In monochronic cultures, time is experienced in a linear way, with a past, a present, and a future, and time is treated as something to be spent, saved, made up, or wasted.

Answer: TRUE Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Diverse and multicultural work environments 112) In polychronic cultures, people focus on one thing at a time and adhere to time commitments.

Answer: FALSE Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Diverse and multicultural work environments 113) In high-context cultures, feelings and thoughts are not explicitly expressed; instead, one has to read between the lines and interpret meaning from one's general understanding.

Answer: FALSE Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Diverse and multicultural work environments

35 .

114) In low-context cultures, key information is embedded in the context rather than made explicit.

Answer: FALSE Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Diverse and multicultural work environments 115) In high-context cultures, feelings and thoughts are not explicitly expressed.

Answer: TRUE Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Diverse and multicultural work environments 116) In the United States, business transactions are based on networks of long-standing relationships based on trust rather than on the formal contracts and arm's-length relationships typical in China and Japan.

Answer: FALSE Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Diverse and multicultural work environments 117) The Japanese ningensei style of communication refers to the preference for humanity, reciprocity, a receiver orientation, and an underlying distrust of words and analytic logic.

Answer: TRUE Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Diverse and multicultural work environments

36 .

118) The Internet has hindered companies of all sizes in developing a presence in international markets.

Answer: FALSE Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-3: To be aware of the impact of IT on cross-border communications AACSB: Information technology 119) Communication over the internet requires firms to adjust to differences in language, culture and local laws.

Answer: TRUE Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-3: To be aware of the impact of IT on cross-border communications AACSB: Information technology 120) When communicating it is important that the received understands the message in the same way as the sender intended it to be sent.

Answer: TRUE Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-4: To learn how to successfully manage cross-cultural business communications successfully AACSB: Written and oral communication 121) In international communication, casual profanity is usually acceptable.

Answer: FALSE Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-4: To learn how to successfully manage cross-cultural business communications successfully AACSB: Written and oral communication

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122) What cultural variables create noise in cross-cultural communication? Use the steps in the communication process to explain methods of controlling cultural noise.

Answer: Cultural variables can affect the communication process by influencing a person's perceptions. These variables include attitudes, social organization, thought patterns, roles, language (spoken or written), nonverbal communication (including kinesic behavior, proxemics, paralanguage, and object language), and time. Noise can occur at any stage of the communication process: message encoding, the medium, decoding, or feedback. Noise can be reduced at encoding by being sensitive to the cultural differences of the receiver and incorporating knowledge of their culture into the message—this includes minimizing the use of idioms or regional expressions that are difficult to translate. Noise can be reduced by selecting the correct medium for the message. Most important messages should be delivered face to face whenever possible to facilitate the important nonverbal communication process. Decoding requires the receiver to consider the sender's culture as well as his or her own culture in translating the message. Finally, feedback is critical to assure the communication sent was the one received. However, the same noise that enters the original communication process can also influence the feedback.

Difficulty: 3: Challenging Chapter: 4 Skill: Synthesis LO: 4-1: To recognize the communication process and how cultural differences can cause noise in that process AACSB: Written and oral communication

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123) John is a manager at a New York based medical device manufacturer. He has flown to Japan to discuss a potential partnership with a local Japanese company. His business contact, Kenji is his counterpart within the Japanese company. John has never been to Japan before, and he's not familiar with their cultural norms. What are some of the ways that a lack of cultural understanding can create a barrier for business success by examining how John handles his meeting with Kenji.

Answer: The concept of high- and low-context culture relates to how an employee's thoughts, opinions, feelings, and upbringing affect how they act within a given culture. A low-context cultures means that businesses in these places have direct, individualistic employees who tend to base decisions on facts. This type of businessperson wants specifics noted in contracts and may have issues with trust.

High-context cultures are the opposite in that trust is the most important part of business dealings. Organizations that have high-context cultures are collectivist and focus on. Individuals from high-context cultures might be interested in getting to know the person they are conducting business within order to get a gut feeling on decision making. They may also be more concerned about business teams and group success rather than individual achievement.

John and Kenji ran into some difficulties during their business negotiations. John spoke quickly and profusely because he wanted to seal the deal as soon as possible. However, Kenji wanted to get to know Jack, and he felt that Jack spoke too much. Kenji also felt that John was only concerned with completing the deal for his own self-interest and was not concerned with the overall good of the company. Jack's nonverbal cues did not help the negotiations either.

Gestures and eye contact are two areas of nonverbal communication that are utilized differently across cultures. Companies must train employees in the correct way to handle nonverbal communication as to not offend other cultures. For example, American workers tend to wave their hand and use a finger to point when giving nonverbal direction. Extreme gesturing is considered rude in some cultures. While pointing may be considered appropriate in some in the United States, Kenji would never use a finger to point towards another person because that gesture is considered rude in Japan. Instead, he might gesture with an open hand, with his palm facing up, toward the person.

Eye contact is another form of nonverbal communication. In the U.S., eye contact is a good thing and is seen as a reflection of honesty and straightforwardness. However, in some cultures, prolonged eye contact can be seen as rude or aggressive in many situations. Women may need to avoid it altogether because lingering eye contact can be viewed as a sign of sexual interest.

During their meeting, John felt that Kenji was not listening to his talking points because Kenji was not looking John in the eyes. However, Kenji did not want John to think he was rude, so he avoided looking directly into John's eyes during his speech.

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The biggest issue dealing with cross-cultural communication is the difficulty created by language barriers. For example, John does not speak Japanese, so he is concerned with his ability to communicate effectively with Kenji. There are some strategies that John can use to help establish a rapport with Kenji. John can explain himself without words by using emotions, facial expressions, and other nonverbal cues. He can also use drawings and ask for an interpreter.

Difficulty: 2: Moderate Chapter: 4 Skill: Concept LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Written and oral communication 124) List the cultural variables in the communication process and explain the different types of nonverbal communication.

Answer: The cultural variables in the communication process are: attitudes, social organization, thought patterns, roles, language, nonverbal communication, and time.

Nonverbal communication can be categorized into four types: 1. Kinesic behavior: the term "kinesic behavior" refers to communication through body movements—posture, gestures, facial expressions, and eye contact.

2. Proxemics: Proxemics deals with the influence of proximity and space on communication— both personal space and office space or layout.

3. Paralanguage: the term "paralanguage" refers to how something is said rather than the content—i.e., the rate of speech, the tone and inflection of voice, other noises, laughing, or yawning.

4. Object language: the term "object language", or material culture, refers to how we communicate through material artifacts, whether architecture, office design and furniture, clothing, cars, or cosmetics.

Difficulty: 2: Moderate Chapter: 4 Skill: Concept LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Written and oral communication

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125) What is paralanguage? How is an international manager's ability to interpret paralanguage essential to cross-cultural business communication?

Answer: Paralanguage refers to how something is said rather than the content of what is said. It includes dimensions such as the rate of speech, the tone and inflection of voice, other noises, laughing, or yawning. The culturally aware manager learns how to interpret subtle differences in paralanguage, including silence. Silence is a powerful communicator. It may be a way of saying no, of being offended, or of waiting for more information to make a decision. There is considerable variation in the use of silence in meetings. While Americans get uncomfortable after 10 or 15 seconds of silence, Chinese prefer to think the situation over for 30 seconds before speaking. The typical scenario between Americans and Chinese, then, is that the American gets impatient, says something to break the silence, and offends the Chinese by interrupting his or her train of thought and comfort level with the subject.

Difficulty: 3: Challenging Chapter: 4 Skill: Concept LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Written and oral communication

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126) What is the difference between monochronic and polychronic time systems? Why is it important for global managers to understand this difference, and provide some examples?

Answer: To initiate effective cross-cultural business interactions, managers should know the difference between monochronic time systems and polychronic time systems because they affect business communications significantly. In monochronic cultures, time is experienced in a linear way, with a past, a present, and a future, and time is treated as something to be spent, saved, made up, or wasted. Monochronic people generally concentrate on one thing at a time and adhere to time commitments. In contrast, polychronic cultures tolerate many things occurring simultaneously and emphasize involvement with people. Polychronic people focus on several things at once, are highly distractible, and change plans often.

Young countries like Australia, Canada, and the United States are relatively focused on the present. They tend to have a monochronic orientation to time-a rigid orientation in which people are focused on schedules, punctuality, and time as a resource. They view time as linear, like a river flowing into the future, carrying workers from one activity to the next.

In such cultures, where people are highly focused on the clock, managers make commitments, set deadlines, and follow a strict schedule in meetings. Punctuality is a virtue and time is money.

Throughout the day, workers glance at their watches, their computer's clock, or the clock on the wall. Investors are impatient and want quick returns. Managers have a relatively short-term perspective when it comes to investments and making money. Company profitability is measured on a quarterly basis. In this way, people in the United States have acquired a reputation for being hurried and impatient. Indeed, the word business was originally spelled busyness.

Some cultures have a polychronic perspective on time. In such societies, instead of performing single tasks serially, people are inclined to do many things at once. In this way, members of polychronic cultures are easily distracted. They can change plans often and easily, and long delays are sometimes needed before taking action. Punctuality per se is relatively unimportant, and managers consider time commitments flexible. They do not strictly follow the clock and schedules. They put more value on relationships and spending time with people.

A polychromic orientation also shows a flexible, nonlinear orientation to time, in which the individual takes a long-term perspective and emphasizes human relationships. For example, Chinese and Japanese firms typically are future-oriented. They focus not on how the firm will perform next quarter but on how it will perform a decade from now. Many large Japanese firms offer lifetime employment and invest heavily in employee training. They expect workers to remain with the firm for decades. Latin Americans have a flexible perception of time and may not arrive exactly at the predetermined time for appointments. In the Middle East, strict Muslims view destiny as the will of God ("Inshallah," or "God willing," is a frequently used phrase). They tend to downplay the importance of future planning. They perceive appointments as relatively vague future obligations.

Difficulty: 3: Challenging Chapter: 4 Skill: Concept LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Diverse and multicultural work environments; Written and oral communication 42 .

127) What is object language? Provide an example of how object language might affect business communication.

Answer: The term "object language", or material culture, refers to how we communicate through material artifacts, whether architecture, office design and furniture, clothing, cars, or cosmetics. Material culture communicates what people hold as important. The importance of family to people in Spain and much of Latin America would be conveyed by family photographs around the office, so there is an expectation that the visitor would enquire about the family.

Difficulty: 2: Moderate Chapter: 4 Skill: Concept LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Written and oral communication 128) What is the difference between high-context and low-context cultures? In which type of culture would you prefer to work? Why? Answer: In high-context cultures, the context in which the communication takes place is vital to the communication of the message–the message is implicit. In these cultures, most communication takes place within a context of extensive information networks resulting from close personal relationships. In low-context cultures, where personal and business relationships are more compartmentalized, communication media need to be more explicit. Feelings and thoughts are expressed in words, and information is more readily available.

Difficulty: 3: Challenging Chapter: 4 Skill: Critical Thinking LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Diverse and multicultural work environments 129) How does the flow of information differ within organizations based in high-context cultures and low-context cultures?

Answer: Context affects information flow. In high-context cultures, information spreads rapidly and freely because of the constant close contact and the implicit ties among people and organizations. Information flow is often informal. In low-context cultures, information is controlled and focused, and thus it does not flow so freely. Compartmentalized roles and office layouts stifle information channels; information sources tend to be more formal.

Difficulty: 3: Challenging Chapter: 4 Skill: Application LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Diverse and multicultural work environments

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130) What are some ways that Japanese and American styles of communication differ?

Answer: Japanese tend to be indirect, and Americans are direct. Japanese focus on relationship communication, while Americans focus on task communication. Confrontational strategies are more acceptable in the United States but discouraged in Japan. Americans want immediate feedback, while Japanese delay feedback. Japanese are patient, longer-term negotiators, and Americans are shorter-term negotiators.

Difficulty: 2: Moderate Chapter: 4 Skill: Concept LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Diverse and multicultural work environments; Written and oral communication 131) In a brief essay, discuss some of the cultural variables that create noise in the communication process between Americans and Arabs.

Answer: Cultural variables that can influence a person's perceptions have been identified through research. The cultural variables are: attitudes, social organization, thought patterns, roles, language (spoken or written), nonverbal communication (including kinesic behavior, paralanguage, proxemics, and object language), and time. Saudi Arabia is a high-contact culture, where people prefer to stand close, touch a great deal, and experience a "close" sensory involvement. On the other hand, North America is a low-contact culture where people have less sensory involvement, stand farther apart, and touch far less. In addition, in monochronic cultures like the U.S., time is experienced in a linear way, with a past, a present, and a future, and time is treated as something to be spent, saved, made up, or wasted. Classified and compartmentalized, time serves to order life. Polychronic people—Latin Americans, Arabs, and those from other collectivist cultures—may focus on several things at once, be highly distractible, and change plans often.

Difficulty: 3: Challenging Chapter: 4 Skill: Synthesis LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Diverse and multicultural work environments; Written and oral communication

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132) Why is language often a cause of miscommunication across cultures? What can international managers do to minimize communication problems that stem from language differences?

Answer: Spoken and written language is a frequent cause of miscommunication stemming from a person's inability to speak the local language, or a poor or too literal translation, a speaker's failure to explain idioms, or a person missing the meaning conveyed through body language or certain symbols. Even among countries that share the same language, there can be problems in the subtleties and nuances inherent in the use of the language. International managers need either a good command of the local language or competent interpreters, although even interpreters do not guarantee successful communication. Managers can improve the communication process by using words, pictures, or gestures that are appropriate to the receiver's frame of reference. Ways to avoid problems are to speak slowly and clearly, avoid long sentences and colloquial expressions, and explain things in several different ways and through several media, if possible.

However, even though English is in common use around the world for business transactions, the manager's efforts to speak the local language will greatly improve the climate. To further clarify their messages, managers can hand out written summaries of verbal presentations and use visual aids, such as graphs or pictures. A good general guide is to move slowly, wait, and take cues from the receivers.

Difficulty: 3: Challenging Chapter: 4 Skill: Synthesis LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Written and oral communication 133) Define the concept of proxemics and provide examples of how proxemics differ between the cultures of Asia, Germany, the United States, and France.

Answer: Proxemics deals with the influence of proximity and space on communication, including personal space and office space or layout. Americans expect office layout to provide private space for each person, usually a larger and more private space as one goes up the hierarchy. In much of Asia, the custom is open office space with people at all levels working and talking in close proximity to one another. Space communicates power in both Germany and the United States, evidenced by the desire for a corner office or one on the top floor. The importance of French officials, however, is made clear by a position in the middle of subordinates, communicating that they have a central position in an information network, where they can stay informed and in control.

Difficulty: 3: Challenging Chapter: 4 Skill: Concept LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Diverse and multicultural work environments; Written and oral communication

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134) What are some of the differences between Japanese and American communication styles?

What can American managers do to improve business communications with Japanese managers?

Answer: Americans are more open and talk freely about almost anything, whereas Japanese will disclose little about their inner thoughts or private issues. Americans are willing to have a wide "public self," disclosing their inner reactions verbally and physically. In contrast, the Japanese prefer to keep their responses largely to their "private self." The Japanese share only a small portion of their thoughts. Cultural clashes between the public and private selves in intercultural communication between Americans and Japanese result when each party forces its cultural norms of communication on the other. In the American style, the American's cultural norms of explicit communication impose on the Japanese by invading the person's private self.

The Japanese style of implicit communication causes a negative reaction from the American because of what is perceived as too much formality and ambiguity, which wastes time. The Japanese believe that true intentions are not readily revealed in words or contracts but are, in fact, masked by them. In contrast to the typical American's verbal agility and explicitness, Japanese behaviors and communications are directed to defend and give face for everyone concerned; to do so, they avoid public disagreements at all costs. American managers benefit from scheduling more time for transactions, developing patience, and learning to get at needed information in more subtle ways–after building rapport and taking time to observe the local system for exchanging information.

Difficulty: 3: Challenging Chapter: 4 Skill: Synthesis LO: 4-2: To appreciate the cultural variables that affect communication for both the sender and the listener AACSB: Written and oral communication 135) How do cultural differences affect the way firms conduct e-commerce?

Answer: Companies are learning that they have to adapt their e-commerce and their enterprise resource planning (ERP) applications to regional idiosyncrasies beyond translation or content management issues; even asking for a name or an e-mail address can incur resistance in many countries where people do not like to give out personal information. Internet transactions must be regionalized and personalized to adjust to differences in language, culture, local laws, and business models, as well as differences in the level of development in the local telecommunications infrastructure.

Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-3: To be aware of the impact of IT on cross-border communications AACSB: Information technology

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136) What can American managers conducting business abroad do to counteract the view that Americans are culturally insensitive?

Answer: One not-for-profit group, called Business for Diplomatic Action, has the following advice for Americans when doing business abroad, in its attempts to counteract the stereotypical American traits such as boastfulness, loudness, and speed. Familiarize yourself with the local geography to avoid making insulting mistakes; dress up; avoid talking about wealth, power, or status; avoid using slang and speaking fast; listen as much as you talk; and refrain from discussing religion and politics.

Difficulty: 1: Easy Chapter: 4 Skill: Concept LO: 4-4: To learn how to successfully manage cross-cultural business communications successfully AACSB: Diverse and multicultural work environments 137) Define decoding and list three main causes of incongruence in the decoding process.

Answer: Decoding is the process of translating the received symbols into the interpreted message. The main causes of incongruence are: (1) the receiver misinterprets the message, (2) the receiver encodes his or her return message incorrectly, or (3) the sender misinterprets the feedback.

Difficulty: 2: Moderate Chapter: 4 Skill: Application LO: 4-4: To learn how to successfully manage cross-cultural business communications successfully AACSB: Diverse and multicultural work environments 138) What kinds of personal abilities and behaviors have been shown to facilitate intercultural communication effectiveness (ICE)?

Answer: Research has identified seven characteristics that facilitate intercultural communication effectiveness: respect, interaction posture, orientation to knowledge, empathy, interaction management, tolerance for ambiguity, and other-oriented role behavior.

Difficulty: 2: Moderate Chapter: 4 Skill: Concept LO: 4-4: To learn how to successfully manage cross-cultural business communications successfully AACSB: Diverse and multicultural work environments; Written and oral communication

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139) Explain the concepts of openness and resilience as they relate to intercultural communication.

Answer: Openness includes traits such as open-mindedness, tolerance for ambiguity, and extrovertedness, all of which facilitate intercultural communication and help the individual adjust to the cross-cultural experience. Resilience is an attribute that helps one achieve cultural adaptation in a cross-cultural context. It includes traits such as having an internal locus of control, persistence, a tolerance for ambiguity, and resourcefulness.

Difficulty: 3: Challenging Chapter: 4 Skill: Concept LO: 4-4: To learn how to successfully manage cross-cultural business communications successfully AACSB: Diverse and multicultural work environments; Written and oral communication

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International Management, 10e, (Deresky/Miller) Chapter 5 Cross-Cultural Negotiation and Decision Making 1) Which of the following terms refers to the process by which two or more parties meet to try to reach an agreement regarding conflicting interests?

A) polarization B) social loafing C) globalization D) negotiation Answer: D Difficulty: 1: Easy Chapter: 5 Skill: Concept LO: 5-1: To become familiar with the role of negotiation in implementing a firm's strategy and the various stakeholders who must be considered AACSB: Written and oral communication 2) Which of the following is most likely to be a reason for ineffective international business negotiations?

A) differences in cultural values and problem-solving techniques B) highly restrictive government legislations C) lack of socializing with the opposite party D) lack of nonverbal communication Answer: A Difficulty: 2: Moderate Chapter: 5 Skill: Concept LO: 5-1: To become familiar with the role of negotiation in implementing a firm's strategy and the various stakeholders who must be considered AACSB: Written and oral communication 3) Cultural values that affect international negotiations do NOT include?

A) lifestyle B) non-verbal communication C) approaches to informal decisions D) problem solving techniques Answer: C Difficulty: 1: Easy Chapter: 5 Skill: Application LO: 5-1: To become familiar with the role of negotiation in implementing a firm's strategy and the various stakeholders who must be considered AACSB: Diverse and multicultural work environments

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4) For long-term positive relations, the goal of negotiation should most likely be to ________.

A) establish clear objectives of the parties involved B) set up a win-win situation C) establish a clear line of communication D) avoid nonverbal communication Answer: B Difficulty: 1: Easy Chapter: 5 Skill: Concept LO: 5-1: To become familiar with the role of negotiation in implementing a firm's strategy and the various stakeholders who must be considered AACSB: Written and oral communication 5) A French businessman has a meeting scheduled with a Brazilian to negotiate terms of a joint venture. The Frenchman prepares for the meeting in the way he always does when negotiating with French firms. The Frenchman assumes that the Brazilian will perceive and reason the way he does. Which of the following terms best describes the Frenchman's mistake?

A) cognitive dissonance B) moral idealism C) parochialism D) projective cognitive similarity Answer: D Difficulty: 1: Easy Chapter: 5 Skill: Application LO: 5-1: To become familiar with the role of negotiation in implementing a firm's strategy and the various stakeholders who must be considered AACSB: Written and oral communication 6) Which of the following is one of the stages in the negotiation process?

A) preparation B) link building C) feedback D) orientation Answer: A Difficulty: 1: Easy Chapter: 5 Skill: Concept LO: 5-2: To learn the stages of the negotiation process and how to prepare for cross-cultural business negotiations AACSB: Written and oral communication

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7) Which of the following variables is LEAST relevant to the profile of an opposing party in a cross-cultural negotiation?

A) bases of trust B) value and uses of time C) risk-taking propensity D) location of the negotiation Answer: D Difficulty: 2: Moderate Chapter: 5 Skill: Concept LO: 5-2: To learn the stages of the negotiation process and how to prepare for cross-cultural business negotiations AACSB: Written and oral communication 8) Which aspect of the negotiation process will most likely occur on a continuous basis?

A) persuasion B) relationship building C) preparation D) concessions and agreement Answer: B Difficulty: 1: Easy Chapter: 5 Skill: Concept LO: 5-2: To learn the stages of the negotiation process and how to prepare for cross-cultural business negotiations AACSB: Written and oral communication 9) Which of the following statements is true regarding a negotiation process?

A) The negotiation process consists of six different stages.

B) The stages of the negotiation process are distinctly separate.

C) The concession and agreement stage typically occurs before the preparation stage.

D) The cultural norms of the place determine the order of the negotiation process stages.

Answer: D Difficulty: 2: Moderate Chapter: 5 Skill: Concept LO: 5-2: To learn the stages of the negotiation process and how to prepare for cross-cultural business negotiations AACSB: Written and oral communication

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10) ________ is the process of getting to know one's contacts in a host country and building mutual trust before embarking on business discussions and transactions.

A) Exchange of task-related information B) Relationship building C) Conflict management D) Persuasion Answer: B Difficulty: 1: Easy Chapter: 5 Skill: Concept LO: 5-2: To learn the stages of the negotiation process and how to prepare for cross-cultural business negotiations AACSB: Written and oral communication 11) One of the primary purposes of relationship building during the negotiation process is to ________.

A) build mutual trust B) create formal contracts C) exchange task-related information D) avoid direct confrontations Answer: A Difficulty: 2: Moderate Chapter: 5 Skill: Concept LO: 5-2: To learn the stages of the negotiation process and how to prepare for cross-cultural business negotiations AACSB: Written and oral communication 12) In the negotiation process, participation in social events, tours, ceremonies, and informal conversation is a characteristic of the ________ stage.

A) preparation B) information exchange C) relationship building D) concessions and agreement Answer: C Difficulty: 1: Easy Chapter: 5 Skill: Concept LO: 5-2: To learn the stages of the negotiation process and how to prepare for cross-cultural business negotiations AACSB: Written and oral communication

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13) Which of the following aspects of negotiating is most closely associated with nontask sounding?

A) relationship building B) information exchange C) persuasion D) final agreement stage Answer: A Difficulty: 1: Easy Chapter: 5 Skill: Concept LO: 5-2: To learn the stages of the negotiation process and how to prepare for cross-cultural business negotiations AACSB: Written and oral communication 14) Which of the following terms refers to general, polite conversation and informal communication before meetings, so that all people can get to know one another?

A) nontask sounding B) cultural noise C) kinesics behavior D) nonverbal behavior Answer: A Difficulty: 1: Easy Chapter: 5 Skill: Concept LO: 5-2: To learn the stages of the negotiation process and how to prepare for cross-cultural business negotiations AACSB: Written and oral communication 15) Which of the following serves as a bridge from relationship building to the more formal stages of negotiating?

A) mediating B) posturing C) conceding D) evaluating Answer: B Difficulty: 1: Easy Chapter: 5 Skill: Concept LO: 5-2: To learn the stages of the negotiation process and how to prepare for cross-cultural business negotiations AACSB: Written and oral communication

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16) Yu Fei, a negotiator for Tama Inc., has a conference with an American competitor's officials.

Her seniors advise her to completely understand the Americans' viewpoint during the conference.

Which of the following benefits will be most likely achieved by Yu Fei if she listens to her seniors' advice?

A) It will help Yu Fei fine tune her listening skills and help point out loopholes.

B) It will encourage Yu Fei to assess a wide range of alternatives for a resolution.

C) It will motivate Yu Fei to adapt to the negotiation style of the Americans.

D) It will help Yu Fei to delve specifically and repeatedly into the details at hand.

Answer: B Difficulty: 3: Challenging Chapter: 5 Skill: Application LO: 5-2: To learn the stages of the negotiation process and how to prepare for cross-cultural business negotiations AACSB: Analytical thinking 17) According to Adler, in order to understand the perspectives of both sides and to prepare for meetings effectively, a negotiator must ________.

A) avoid the use of nonverbal communication B) engage in lengthy, evasive conversations C) practice role reversal D) avoid direct conflicts Answer: C Difficulty: 2: Moderate Chapter: 5 Skill: Concept LO: 5-2: To learn the stages of the negotiation process and how to prepare for cross-cultural business negotiations AACSB: Written and oral communication 18) During which stage of the negotiations process does hard bargaining begin?

A) persuasion B) relationship building C) information gathering D) agreement Answer: A Difficulty: 1: Easy Chapter: 5 Skill: Concept LO: 5-2: To learn the stages of the negotiation process and how to prepare for cross-cultural business negotiations AACSB: Written and oral communication

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19) In the American culture, which of the following is most likely to be considered a dirty trick during cross-cultural negotiations?

A) establishing personal relationships B) deliberately distorting facts C) hard bargaining D) exchanging irrelevant information Answer: B Difficulty: 2: Moderate Chapter: 5 Skill: Concept LO: 5-2: To learn the stages of the negotiation process and how to prepare for cross-cultural business negotiations AACSB: Diverse and multicultural work environments 20) In the American culture, which of the following is most likely considered a rough tactic used during negotiations?

A) confrontations during conflicts B) use of emotional appeals C) informal seating arrangement D) uncomfortable room temperatures Answer: D Difficulty: 2: Moderate Chapter: 5 Skill: Concept LO: 5-2: To learn the stages of the negotiation process and how to prepare for cross-cultural business negotiations AACSB: Diverse and multicultural work environments 21) Which of the following stages of negotiations is most likely to take place immediately after the exchange of task-related information?

A) relationship building B) persuasion C) preparation D) concessions and agreement Answer: B Difficulty: 1: Easy Chapter: 5 Skill: Concept LO: 5-2: To learn the stages of the negotiation process and how to prepare for cross-cultural business negotiations AACSB: Written and oral communication

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22) In the Far East, details are likely to be worked out ahead of time through the "backdoor" approach. Which of the following terms refers to this approach?

A) mottainai B) lien C) guanxi D) houmani Answer: D Difficulty: 2: Moderate Chapter: 5 Skill: Concept LO: 5-2: To learn the stages of the negotiation process and how to prepare for cross-cultural business negotiations AACSB: Diverse and multicultural work environments 23) Which of the following tactics are not used by skilled international negotiators?

A) promises B) threats C) dirty tricks D) meaningful information Answer: D Difficulty: 1: Easy Chapter: 5 Skill: Concept LO: 5-2: To learn the stages of the negotiation process and how to prepare for cross-cultural business negotiations AACSB: Application of knowledge 24) Which of the following is most likely a subtle and complex behavior that makes crosscultural negotiations difficult?

A) developing goals of negotiation B) nonverbal communication C) exchanging objective information D) employing information technology Answer: B Difficulty: 2: Moderate Chapter: 5 Skill: Concept LO: 5-2: To learn the stages of the negotiation process and how to prepare for cross-cultural business negotiations AACSB: Written and oral communication

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25) Which of the following is most likely the last stage of negotiation?

A) analysis of an opponent's position B) concessions and agreement C) relationship building D) training Answer: B Difficulty: 1: Easy Chapter: 5 Skill: Concept LO: 5-2: To learn the stages of the negotiation process and how to prepare for cross-cultural business negotiations AACSB: Written and oral communication 26) In which of the following countries do people typically begin the concessions and agreement stage of negotiation with what they are prepared to accept rather than take extreme positions?

A) China B) Sweden C) Russia D) United States Answer: B Difficulty: 1: Easy Chapter: 5 Skill: Concept LO: 5-2: To learn the stages of the negotiation process and how to prepare for cross-cultural business negotiations AACSB: Diverse and multicultural work environments 27) Research in the United States indicates that during the final stage of negotiations, it is best to start with ________.

A) extreme positions B) a holistic approach C) relationship building D) finalized formal contracts Answer: A Difficulty: 1: Easy Chapter: 5 Skill: Concept LO: 5-2: To learn the stages of the negotiation process and how to prepare for cross-cultural business negotiations AACSB: Diverse and multicultural work environments

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28) Which of the following is most likely to be true about negotiators in the Far East?

A) Negotiators avoid building informal relationships.

B) Negotiators approach issues deciding on the whole deal at the end, rather than making incremental concessions.

C) Negotiators begin the discussions by pointing out proposals that they are prepared to accept.

D) Negotiators are particular about formal contracts and insist on specific clauses.

Answer: B Difficulty: 2: Moderate Chapter: 5 Skill: Concept LO: 5-2: To learn the stages of the negotiation process and how to prepare for cross-cultural business negotiations AACSB: Diverse and multicultural work environments 29) The method of using extreme positions during the concessions and agreement stage of negotiation involves ________.

A) careful timing of the disclosure of information and concessions B) approaching the issue in a holistic manner C) general and polite conversation to socialize D) building mutual trust before embarking on business discussions Answer: A Difficulty: 2: Moderate Chapter: 5 Skill: Concept LO: 5-2: To learn the stages of the negotiation process and how to prepare for cross-cultural business negotiations AACSB: Written and oral communication 30) From an American perspective, the ________ stage of negotiation is straightforward, objective, efficient, and direct.

A) relationship building B) exchanging task-related information C) nonverbal communication D) motivation Answer: B Difficulty: 2: Moderate Chapter: 5 Skill: Concept LO: 5-2: To learn the stages of the negotiation process and how to prepare for cross-cultural business negotiations AACSB: Diverse and multicultural work environments

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31) During the exchange of task-related information, who among the following people would most likely ask many questions of their counterparts, delve specifically and repeatedly into the details at hand, and provide only vague and ambiguous material during a presentation?

A) Chinese B) Arabs C) Americans D) Mexicans Answer: A Difficulty: 1: Easy Chapter: 5 Skill: Concept LO: 5-2: To learn the stages of the negotiation process and how to prepare for cross-cultural business negotiations AACSB: Diverse and multicultural work environments 32) What forms the basis for the enforcement of most business contracts in Mexico and China?

A) legal systems B) scientific research C) personal commitments to individuals D) international regulations Answer: C Difficulty: 1: Easy Chapter: 5 Skill: Concept LO: 5-2: To learn the stages of the negotiation process and how to prepare for cross-cultural business negotiations AACSB: Diverse and multicultural work environments 33) Which of the following cultures views formal contracts as insulting and wasteful, and prefers to make agreements based on mutual understanding and trust?

A) Swedes B) Japanese C) Russians D) Americans Answer: B Difficulty: 1: Easy Chapter: 5 Skill: Concept LO: 5-2: To learn the stages of the negotiation process and how to prepare for cross-cultural business negotiations AACSB: Diverse and multicultural work environments

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34) In the ________ culture, negotiators tend to use the word "no" repeatedly, and they are best described as spontaneous and talkative.

A) Brazilian B) Arabian C) American D) Japanese Answer: A Difficulty: 1: Easy Chapter: 5 Skill: Concept LO: 5-3: To gain insight into the various types of negotiating styles around the world AACSB: Diverse and multicultural work environments 35) When preparing for cross-cultural negotiations, managers should first evaluate their own negotiation styles in order to ________.

A) understand the reasons for failing or succeeding in domestic negotiations B) determine how they differ from the norm in other countries C) analyze the various stages of the negotiation process D) assess all social and cognitive influences Answer: B Difficulty: 2: Moderate Chapter: 5 Skill: Concept LO: 5-3: To gain insight into the various types of negotiating styles around the world AACSB: Written and oral communication 36) Which of the following is a similarity between the negotiation styles of both North Americans and Latin Americans?

A) They highly value emotional sensitivity.

B) They display strong commitment to their employers.

C) They give great importance to documentation.

D) They tend to be argumentative when they think they are right.

Answer: D Difficulty: 2: Moderate Chapter: 5 Skill: Concept LO: 5-3: To gain insight into the various types of negotiating styles around the world AACSB: Diverse and multicultural work environments

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37) When managers from different parts of the globe engage in negotiations, it is not common to ________.

A) misread unspoken signals B) draw incorrect conclusions C) draw correct conclusions D) undermine the intended goals Answer: C Difficulty: 1: Easy Chapter: 5 Skill: Concept LO: 5-3: To gain insight into the various types of negotiating styles around the world AACSB: Diverse and multicultural work environments 38) In South Korea, the keiretsu that are not linked together by ________.

A) business ties B) cross holdings of debt C) cross holding of equity D) familial relationships Answer: D Difficulty: 2: Moderate Chapter: 5 Skill: Concept LO: 5-3: To gain insight into the various types of negotiating styles around the world AACSB: Diverse and multicultural work environments 39) Which of the following is true about Japanese negotiators?

A) Personal benefit is the ultimate aim of the Japanese negotiators.

B) Japanese negotiators are often impulsive and make decisions spontaneously.

C) Japanese negotiators are outwardly expressive and take conflicts personally.

D) Japanese negotiators are calm and patient, and accustomed to long, detailed negotiating sessions.

Answer: D Difficulty: 2: Moderate Chapter: 5 Skill: Concept LO: 5-3: To gain insight into the various types of negotiating styles around the world AACSB: Diverse and multicultural work environments

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40) Japanese negotiators tend to ________.

A) lack emotional sensitivity B) be argumentative C) hide emotions D) lack commitment to their employers Answer: C Difficulty: 2: Moderate Chapter: 5 Skill: Concept LO: 5-3: To gain insight into the various types of negotiating styles around the world AACSB: Diverse and multicultural work environments 41) ________ are based on what North Americans believe is objective information, presented with the assumption that it is understood by the other side on a logical basis.

A) Factual appeals B) Affective appeals C) Axiomatic appeals D) Nonverbal messages Answer: A Difficulty: 1: Easy Chapter: 5 Skill: Concept LO: 5-3: To gain insight into the various types of negotiating styles around the world AACSB: Diverse and multicultural work environments 42) Which of the following types of appeals, typically used by Arabs, is based on emotions and subjective feelings?

A) factual appeals B) affective appeals C) axiomatic appeals D) virtual appeals Answer: B Difficulty: 1: Easy Chapter: 5 Skill: Concept LO: 5-3: To gain insight into the various types of negotiating styles around the world AACSB: Diverse and multicultural work environments

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43) Axiomatic appeals are generally based on ________.

A) socially accepted ideals B) level of loyalty C) subjective feelings D) objective information Answer: A Difficulty: 1: Easy Chapter: 5 Skill: Concept LO: 5-3: To gain insight into the various types of negotiating styles around the world AACSB: Written and oral communication 44) Which of the following behaviors is NOT consistent with Casse's profile of successful American negotiators?

A) refuse to make concessions in advance B) exhibits a good sense of timing C) never compromises D) understands the issues Answer: C Difficulty: 2: Moderate Chapter: 5 Skill: Concept LO: 5-3: To gain insight into the various types of negotiating styles around the world AACSB: Diverse and multicultural work environments 45) According to Pierre Casse, which of the following is a typical characteristic of a successful Indian negotiator?

A) never changes his or her mind B) lacks patience C) uses trade secrets to strengthen his position D) stays humble and trusts the opponent Answer: D Difficulty: 2: Moderate Chapter: 5 Skill: Concept LO: 5-3: To gain insight into the various types of negotiating styles around the world AACSB: Diverse and multicultural work environments

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46) According to Pierre Casse, Arab negotiators ________.

A) possess a level of trust, respect and prestige B) prefer short-term relationships to long-term relationships C) confront opponents directly and openly D) do not use conferences as mediating devices Answer: A Difficulty: 2: Moderate Chapter: 5 Skill: Concept LO: 5-3: To gain insight into the various types of negotiating styles around the world AACSB: Diverse and multicultural work environments 47) According to Pierre Casse, which of the following is a typical characteristic of a Swedish negotiator?

A) inflexible B) down to earth and overcautious C) inefficient D) confronts openly and directly Answer: B Difficulty: 1: Easy Chapter: 5 Skill: Concept LO: 5-3: To gain insight into the various types of negotiating styles around the world AACSB: Diverse and multicultural work environments 48) Which of the following is true about Arab negotiators?

A) Arab negotiators do not use conferences as mediating devices.

B) Arab negotiators generally use factual rather than affective appeals.

C) Arab negotiators prefer short-term relationships to long-term relationships.

D) Arab negotiators use mediators to settle disputes.

Answer: D Difficulty: 2: Moderate Chapter: 5 Skill: Concept LO: 5-3: To gain insight into the various types of negotiating styles around the world AACSB: Diverse and multicultural work environments

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49) Which of the following is true about the negotiating tactics used by the Russians?

A) They are quick decision makers.

B) They believe that "time is money."

C) They stall for time.

D) They are outwardly expressive.

Answer: C Difficulty: 2: Moderate Chapter: 5 Skill: Concept LO: 5-3: To gain insight into the various types of negotiating styles around the world AACSB: Diverse and multicultural work environments 50) Arab negotiators will most likely make concessions because of their interest in ________.

A) saving valuable time B) preventing embarrassment C) forming long-term relationships D) creating a good first impression Answer: C Difficulty: 1: Easy Chapter: 5 Skill: Concept LO: 5-3: To gain insight into the various types of negotiating styles around the world AACSB: Diverse and multicultural work environments 51) Which of the following terms refers to the nature and appearance of the relationship between the people pursuing common goals in a negotiation?

A) software of negotiation B) diplomacy of negotiation C) objectivity of negotiation D) transparency of negotiation Answer: A Difficulty: 1: Easy Chapter: 5 Skill: Concept LO: 5-4: To recognize that managing negotiation requires learning about the culturally based behavioral differences, values, and agendas of the negotiating parties and how to build trust for successful negotiations AACSB: Diverse and multicultural work environments

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52) A negotiation support system provides support to the negotiation process by ________.

A) increasing the likelihood that an agreement is reached when a zone of agreement exists B) increasing the ability to communicate nonverbally C) increasing costs associated with time delays D) increasing the fees paid to the attorneys Answer: A Difficulty: 1: Easy Chapter: 5 Skill: Concept LO: 5-4: To recognize that managing negotiation requires learning about the culturally based behavioral differences, values, and agendas of the negotiating parties and how to build trust for successful negotiations AACSB: Written and oral communication 53) According to the research conducted by Tung et al., which of the following cities in China has people who are business-savvy, confident, career-oriented, and materialistic?

A) Beijing B) Chengdu C) Shanghai D) Guangzhou Answer: C Difficulty: 1: Easy Chapter: 5 Skill: Concept LO: 5-4: To recognize that managing negotiation requires learning about the culturally based behavioral differences, values, and agendas of the negotiating parties and how to build trust for successful negotiations AACSB: Diverse and multicultural work environments 54) According to the research conducted by Tung et al., people in ________ are bureaucratic, educated, diversified, highly relationship-oriented, and more direct.

A) Shenzhen B) Shanghai C) Beijing D) Guangzhou Answer: C Difficulty: 1: Easy Chapter: 5 Skill: Concept LO: 5-4: To recognize that managing negotiation requires learning about the culturally based behavioral differences, values, and agendas of the negotiating parties and how to build trust for successful negotiations AACSB: Diverse and multicultural work environments

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55) Business people report two major areas of conflict in negotiating with the Chinese—their apparent insincerity about reaching an agreement and ________.

A) their unwillingness to develop relationships beyond a superficial level B) their insistence on a compromise whenever progress becomes difficult C) the amount of details desired about product characteristics D) the use of bureaucratic mechanisms to stall negotiations Answer: C Difficulty: 1: Easy Chapter: 5 Skill: Concept LO: 5-4: To recognize that managing negotiation requires learning about the culturally based behavioral differences, values, and agendas of the negotiating parties and how to build trust for successful negotiations AACSB: Diverse and multicultural work environments 56) Which of the following cultural norms greatly affects the negotiation process for the Chinese?

A) ingrained politeness and emotional restraint B) emphasis on impersonal relationships C) belief in explicit and direct approach D) tendency to approach conflicts directly Answer: A Difficulty: 1: Easy Chapter: 5 Skill: Concept LO: 5-4: To recognize that managing negotiation requires learning about the culturally based behavioral differences, values, and agendas of the negotiating parties and how to build trust for successful negotiations AACSB: Diverse and multicultural work environments 57) In Chinese culture, the term "________" refers to a person's moral character; it is the most important thing defining that person and without it, one cannot function in society.

A) mien-tzu B) lien C) guanxi D) houmani Answer: B Difficulty: 1: Easy Chapter: 5 Skill: Concept LO: 5-4: To recognize that managing negotiation requires learning about the culturally based behavioral differences, values, and agendas of the negotiating parties and how to build trust for successful negotiations AACSB: Diverse and multicultural work environments

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58) In Chinese culture, the term "________" refers to one's reputation or prestige, earned through accomplishments or through bureaucratic or political power.

A) mien-tzu B) lien C) guanxi D) houmani Answer: A Difficulty: 1: Easy Chapter: 5 Skill: Concept LO: 5-4: To recognize that managing negotiation requires learning about the culturally based behavioral differences, values, and agendas of the negotiating parties and how to build trust for successful negotiations AACSB: Diverse and multicultural work environments 59) Linda, the operations executive for Tango, is asked to travel to China in order to set up a new operational facility. When negotiating with the Chinese investors, Linda should ________.

A) be direct and explicit when conveying information, as time is of immense value B) be focused on establishing long-term, trusting relationships, even at the expense of some immediate returns C) be aggressive D) be quick in decision making and confront problems directly Answer: B Difficulty: 3: Challenging Chapter: 5 Skill: Application LO: 5-4: To recognize that managing negotiation requires learning about the culturally based behavioral differences, values, and agendas of the negotiating parties and how to build trust for successful negotiations AACSB: Diverse and multicultural work environments 60) Which of the following best defines guanxi?

A) personal reputation B) common group goals C) network of personal relations D) unacceptable negotiating tactics Answer: C Difficulty: 1: Easy Chapter: 5 Skill: Concept LO: 5-4: To recognize that managing negotiation requires learning about the culturally based behavioral differences, values, and agendas of the negotiating parties and how to build trust for successful negotiations AACSB: Diverse and multicultural work environments

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61) Fizzy is an American firm that manufactures carbonated soft drinks. Fizzy executives want to enter the global market, and they are considering the idea of a joint venture with a beverage company located overseas. After conducting research on different beverage firms, Fizzy executives selected a large beverage manufacturer located in China. Kevin Burns and three other top-level executives at Fizzy have been assigned to the negotiating team. The team recently arrived in China to negotiate the details of the joint venture. Which of the following, if true, strengthens the argument that Kevin should make token concessions to the Chinese throughout the negotiation process?

A) Fizzy executives hope to have other business deals with the Chinese firm in the future.

B) Fizzy executives want to demonstrate their aggressiveness and present factual appeals.

C) Fizzy executives want to ensure compliance with the ringi system at the Chinese firm.

D) Fizzy executives are not certain as to who has decision-making authority at the Chinese firm.

Answer: A Difficulty: 3: Challenging Chapter: 5 Skill: Application LO: 5-4: To recognize that managing negotiation requires learning about the culturally based behavioral differences, values, and agendas of the negotiating parties and how to build trust for successful negotiations AACSB: Analytical thinking 62) Fizzy is an American firm that manufactures carbonated soft drinks. Fizzy executives want to enter the global market, and they are considering the idea of a joint venture with a beverage company located overseas. After conducting research on different beverage firms, Fizzy executives selected a large beverage manufacturer located in China. Kevin Burns and three other top-level executives at Fizzy have been assigned to the negotiating team. The team has flown to China to negotiate the details of the joint venture. Which of the following, if true, strengthens the argument that Kevin should be prepared with specific details about the product specifications and technology that will be used?

A) The Chinese firm has joint ventures with many international firms.

B) The Chinese firm is state-owned and located in Beijing.

C) The Chinese firm uses a two-stage negotiation process: the technical and the commercial.

D) The Chinese firm reportedly uses delay tactics during negotiations.

Answer: C Difficulty: 3: Challenging Chapter: 5 Skill: Application LO: 5-4: To recognize that managing negotiation requires learning about the culturally based behavioral differences, values, and agendas of the negotiating parties and how to build trust for successful negotiations AACSB: Analytical thinking

21 .

63) Fizzy is an American firm that manufactures carbonated soft drinks. Fizzy executives want to enter the global market, and they are considering the idea of a joint venture with a beverage company located overseas. After conducting research on different beverage firms, Fizzy executives selected a large beverage manufacturer located in China. Kevin Burns and three other top-level executives at Fizzy have been assigned to the negotiating team. The team has flown to China to negotiate the details of the joint venture. Which of the following best supports Kevin's argument that he should be the primary negotiator?

A) Kevin has an aggressive and explicit attitude.

B) Kevin leads all negotiations with domestic U.S. firms.

C) Kevin is the oldest and the most experienced person on the negotiating team.

D) Kevin has full knowledge of guanxi; therefore, he should lead the team.

Answer: C Difficulty: 3: Challenging Chapter: 5 Skill: Application LO: 5-4: To recognize that managing negotiation requires learning about the culturally based behavioral differences, values, and agendas of the negotiating parties and how to build trust for successful negotiations AACSB: Analytical thinking 64) What are the two negotiation stages that Americans should expect when negotiating with the Chinese?

A) informational and agreement B) gift-exchange and socializing C) propositions and marketing D) technical and commercial Answer: D Difficulty: 1: Easy Chapter: 5 Skill: Concept LO: 5-4: To recognize that managing negotiation requires learning about the culturally based behavioral differences, values, and agendas of the negotiating parties and how to build trust for successful negotiations AACSB: Diverse and multicultural work environments

22 .

65) Which of the following is a common Chinese tactic used during negotiations with Americans?

A) refusing to answer the Americans' inquiries B) suggesting that the Americans are reneging on their friendship C) refusing to compromise until the last possible moment D) asking for concessions relating to product cost and delivery time Answer: B Difficulty: 2: Moderate Chapter: 5 Skill: Concept LO: 5-4: To recognize that managing negotiation requires learning about the culturally based behavioral differences, values, and agendas of the negotiating parties and how to build trust for successful negotiations AACSB: Diverse and multicultural work environments 66) The ________ approach to conflict is being used when both parties negotiate on the basis of factual information and logical analysis.

A) instrumental-oriented B) expressive-oriented C) affective-oriented D) individual-oriented Answer: A Difficulty: 1: Easy Chapter: 5 Skill: Concept LO: 5-4: To recognize that managing negotiation requires learning about the culturally based behavioral differences, values, and agendas of the negotiating parties and how to build trust for successful negotiations AACSB: Written and oral communication 67) Which of the following approaches to conflict involves handling the situation indirectly and implicitly without clear delineation of the situation from the person handling it?

A) instrumental-oriented B) expressive-oriented C) objective-oriented D) problem-oriented Answer: B Difficulty: 1: Easy Chapter: 5 Skill: Concept LO: 5-4: To recognize that managing negotiation requires learning about the culturally based behavioral differences, values, and agendas of the negotiating parties and how to build trust for successful negotiations AACSB: Written and oral communication

23 .

68) ________ decision making occurs at a high organizational level in one location, such as an organization's headquarters.

A) Centralized B) Decentralized C) Participative D) Consultative Answer: A Difficulty: 1: Easy Chapter: 5 Skill: Application LO: 5-5: To appreciate the variables in the decision-making process and understand the influence of culture on decision making AACSB: Application of knowledge 69) Decentralized decision making is beneficial when ________.

A) all subsidiaries use the same inputs in production B) fast-changing national business environments put a premium on local responsiveness C) one subsidiary's output is another's input D) it aims to create a single global organizational culture Answer: B Difficulty: 1: Easy Chapter: 5 Skill: Application LO: 5-5: To appreciate the variables in the decision-making process and understand the influence of culture on decision making AACSB: Application of knowledge 70) ________ is the process of choosing one alternative from among a set of alternatives in order to promote a specific objective.

A) Decision making B) Perception C) Motivation D) Leadership Answer: A Difficulty: 1: Easy Chapter: 5 Skill: Application LO: 5-5: To appreciate the variables in the decision-making process and understand the influence of culture on decision making AACSB: Application of knowledge

24 .

71) Which of the following is a part of the rational decision-making process?

A) background check on individuals involved in decision making B) gathering and analyzing relevant data C) comparison of competitor products D) marketing the respective products or services Answer: B Difficulty: 1: Easy Chapter: 5 Skill: Concept LO: 5-5: To appreciate the variables in the decision-making process and understand the influence of culture on decision making AACSB: Written and oral communication 72) Research shows that managers from ________ have the highest tolerance for risk.

A) United States B) Germany C) Belgium D) Austria Answer: A Difficulty: 1: Easy Chapter: 5 Skill: Concept LO: 5-5: To appreciate the variables in the decision-making process and understand the influence of culture on decision making AACSB: Diverse and multicultural work environments 73) Xuan-Li, a manager at a Japanese electronics firm, has initiated a ringi process, which is currently circulating through his work group. Xuan-Li most likely generated the ringi process for the purpose of ________.

A) identifying potential group leaders B) adhering to the firm's hierarchical structure C) encouraging group consensus D) documenting a problem raised by management Answer: C Difficulty: 2: Moderate Chapter: 5 Skill: Concept LO: 5-5: To appreciate the variables in the decision-making process and understand the influence of culture on decision making AACSB: Diverse and multicultural work environments

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74) American managers believe strongly in self-determination and perceive problem situations as something they can change. This shows that they ________.

A) belong to a high-context culture B) believe in socialism C) have internal locus of control D) belong to a high power distance culture Answer: C Difficulty: 1: Easy Chapter: 5 Skill: Concept LO: 5-5: To appreciate the variables in the decision-making process and understand the influence of culture on decision making AACSB: Diverse and multicultural work environments 75) Which of the following types of decision making is generally used in China, Germany, Turkey, and India?

A) participative B) autocratic C) totalitarian D) theocratic Answer: B Difficulty: 1: Easy Chapter: 5 Skill: Concept LO: 5-5: To appreciate the variables in the decision-making process and understand the influence of culture on decision making AACSB: Diverse and multicultural work environments 76) In Japanese culture, the term "________" refers to a process which involves gaining approval on a proposal by circulating documents to those concerned throughout the company. It usually comprises four steps: proposal, circulation, approval, and record.

A) nemawashi B) kaizen C) shinyo D) ringi Answer: D Difficulty: 1: Easy Chapter: 5 Skill: Concept LO: 5-5: To appreciate the variables in the decision-making process and understand the influence of culture on decision making AACSB: Diverse and multicultural work environments

26 .

77) Which of the following is a typical characteristic of a Japanese work group?

A) open expression of conflicts B) decision making based on a patient, long-term perspective C) lack of cooperation D) lack of mutual confidence Answer: B Difficulty: 1: Easy Chapter: 5 Skill: Concept LO: 5-5: To appreciate the variables in the decision-making process and understand the influence of culture on decision making AACSB: Diverse and multicultural work environments 78) Risk tolerance is one of the cultural variables that never affects the decision-making process.

Answer: FALSE Difficulty: 1: Easy Chapter: 5 Skill: Concept LO: 5-5: To appreciate the variables in the decision-making process and understand the influence of culture on decision making AACSB: Diverse and multicultural work environments 79) The ringi process involves gaining approval on a proposal by circulating documents to those concerned throughout the company.

Answer: TRUE Difficulty: 1: Easy Chapter: 5 Skill: Concept LO: 5-5: To appreciate the variables in the decision-making process and understand the influence of culture on decision making AACSB: Diverse and multicultural work environments 80) A win-win situation is one that brings about a settlement that is beneficial to all parties concerned Answer: TRUE Difficulty: 1: Easy Chapter: 5 Skill: Concept LO: 5-1: To become familiar with the role of negotiation in implementing a firm's strategy and the various stakeholders who must be considered AACSB: Written and oral communication

27 .

81) Projective cognitive similarity is the assumption that others perceive, judge, think, and reason in the same way when, in fact, they do not because of differential cultural and practical influences.

Answer: TRUE Difficulty: 1: Easy Chapter: 5 Skill: Concept LO: 5-1: To become familiar with the role of negotiation in implementing a firm's strategy and the various stakeholders who must be considered AACSB: Written and oral communication 82) Relationship building is the process of getting to know one's contacts in a host country and building mutual trust before embarking on business discussions and transactions.

Answer: TRUE Difficulty: 1: Easy Chapter: 5 Skill: Concept LO: 5-1: To become familiar with the role of negotiation in implementing a firm's strategy and the various stakeholders who must be considered AACSB: Written and oral communication 83) The relationship-building process during negotiation is over as soon as a negotiator is done exchanging task-related information.

Answer: FALSE Difficulty: 2: Moderate Chapter: 5 Skill: Concept LO: 5-1: To become familiar with the role of negotiation in implementing a firm's strategy and the various stakeholders who must be considered AACSB: Written and oral communication 84) Negotiators empathically enter the private world or cultural space of their counterparts while willingly sharing their own view of the situation.

Answer: TRUE Difficulty: 2: Moderate Chapter: 5 Skill: Concept LO: 5-1: To become familiar with the role of negotiation in implementing a firm's strategy and the various stakeholders who must be considered AACSB: Written and oral communication

28 .

85) Tactics used in international negotiation can include: location, time limits, and buyer-seller relations.

Answer: TRUE Difficulty: 1: Easy Chapter: 5 Skill: Application LO: 5-2: To learn the stages of the negotiation process and how to prepare for cross-cultural business negotiations AACSB: Application of knowledge 86) To understand cultural differences in negotiating styles, it is necessary for managers to determine how their systems differ from the norms in other countries.

Answer: TRUE Difficulty: 1: Easy Chapter: 5 Skill: Application LO: 5-2: To learn the stages of the negotiation process and how to prepare for cross-cultural business negotiations AACSB: Diverse and multicultural work environments 87) Relationship building is the process of getting to know one's contacts in a host country and building mutual trust before embarking on business discussions and transactions.

Answer: TRUE Difficulty: 1: Easy Chapter: 5 Skill: Concept LO: 5-2: To learn the stages of the negotiation process and how to prepare for cross-cultural business negotiations AACSB: Written and oral communication 88) Nontask sounding involves general, polite conversation and informal communication before meetings.

Answer: TRUE Difficulty: 1: Easy Chapter: 5 Skill: Concept LO: 5-2: To learn the stages of the negotiation process and how to prepare for cross-cultural business negotiations AACSB: Written and oral communication

29 .

89) In Mexico, Saudi Arabia, and the United Kingdom, personal commitments to individuals, rather than to the legal system, form the basis for the enforcement of contracts.

Answer: TRUE Difficulty: 1: Easy Chapter: 5 Skill: Concept LO: 5-2: To learn the stages of the negotiation process and how to prepare for cross-cultural business negotiations AACSB: Written and oral communication 90) It is important to consider the teams of people from both parties who will be negotiating.

Answer: TRUE Difficulty: 1: Easy Chapter: 5 Skill: Concept LO: 5-2: To learn the stages of the negotiation process and how to prepare for cross-cultural business negotiations AACSB: Diverse and multicultural work environments 91) During exchange of task-related information, Mexican negotiators tend to be wary of motives and so less direct and somewhat evasive with their presentations.

Answer: TRUE Difficulty: 2: Moderate Chapter: 5 Skill: Concept LO: 5-2: To learn the stages of the negotiation process and how to prepare for cross-cultural business negotiations AACSB: Diverse and multicultural work environments 92) Contracts in Saudi Arabia are expected to include a lot of details and therefore often take a long time to create and agree on.

Answer: FALSE Difficulty: 1: Easy Chapter: 5 Skill: Concept LO: 5-2: To learn the stages of the negotiation process and how to prepare for cross-cultural business negotiations AACSB: Diverse and multicultural work environments

30 .

93) Mexican negotiators tend to be wary of motives and so less direct and somewhat evasive with their presentations.

Answer: TRUE Difficulty: 1: Easy Chapter: 5 Skill: Concept LO: 5-2: To learn the stages of the negotiation process and how to prepare for cross-cultural business negotiations AACSB: Written and oral communication 94) French negotiators enjoy debate and conflict.

Answer: TRUE Difficulty: 1: Easy Chapter: 5 Skill: Concept LO: 5-2: To learn the stages of the negotiation process and how to prepare for cross-cultural business negotiations AACSB: Written and oral communication 95) The Chinese also ask many questions of their counterparts and delve specifically and repeatedly into the details at hand.

Answer: TRUE Difficulty: 1: Easy Chapter: 5 Skill: Concept LO: 5-2: To learn the stages of the negotiation process and how to prepare for cross-cultural business negotiations AACSB: Written and oral communication 96) Russians enter negotiations prepared in the specific details of the matter being presented.

Answer: TRUE Difficulty: 1: Easy Chapter: 5 Skill: Concept LO: 5-2: To learn the stages of the negotiation process and how to prepare for cross-cultural business negotiations AACSB: Written and oral communication 97) In Russia, when answering the other side's questions during negotiations, it is unwise to bring along someone with expertise to answer questions.

Answer: FALSE Difficulty: 1: Easy Chapter: 5 Skill: Concept LO: 5-2: To learn the stages of the negotiation process and how to prepare for cross-cultural business negotiations AACSB: Written and oral communication 31 .

98) If your negotiation in South Korea reaches a critical point, it can be most effective to have a one-on-one conversation with the most senior local manager in order to resolve disagreements.

Answer: TRUE Difficulty: 2: Moderate Chapter: 5 Skill: Application LO: 5-2: To learn the stages of the negotiation process and how to prepare for cross-cultural business negotiations AACSB: Diverse and multicultural work environments 99) Culturally based differences in verbal and nonverbal negotiation behavior influence the negotiation process at every stage.

Answer: TRUE Difficulty: 2: Moderate Chapter: 5 Skill: Concept LO: 5-2: To learn the stages of the negotiation process and how to prepare for cross-cultural business negotiations AACSB: Written and oral communication 100) During the stage of concessions and agreement, Russians and Chinese are generally very flexible and open to changes.

Answer: FALSE Difficulty: 1: Easy Chapter: 5 Skill: Concept LO: 5-2: To learn the stages of the negotiation process and how to prepare for cross-cultural business negotiations AACSB: Diverse and multicultural work environments 101) The sanctity of contracts has not traditionally been as respected a concept in Russian business as in American business.

Answer: TRUE Difficulty: 1: Easy Chapter: 5 Skill: Concept LO: 5-2: To learn the stages of the negotiation process and how to prepare for cross-cultural business negotiations AACSB: Written and oral communication

32 .

102) Negotiators in the Far East address issues one at a time, in a linear fashion.

Answer: FALSE Difficulty: 2: Moderate Chapter: 5 Skill: Concept LO: 5-2: To learn the stages of the negotiation process and how to prepare for cross-cultural business negotiations AACSB: Diverse and multicultural work environments 103) In the Far East, details are likely to be worked out ahead of time through an approach called houmani.

Answer: TRUE Difficulty: 1: Easy Chapter: 5 Skill: Concept LO: 5-2: To learn the stages of the negotiation process and how to prepare for cross-cultural business negotiations AACSB: Written and oral communication 104) Many Arab negotiators, following Islamic tradition, use mediators to settle disputes.

Answer: TRUE Difficulty: 2: Moderate Chapter: 5 Skill: Concept LO: 5-3: To gain insight into the various types of negotiating styles around the world AACSB: Written and oral communication 105) Your opening offer with a Sweden negotiator should leave at least 30-40% bargaining room, since your counterpart will expect you to stay flexible and allow them to obtain "a good deal."

Answer: FALSE Difficulty: 2: Moderate Chapter: 5 Skill: Concept LO: 5-3: To gain insight into the various types of negotiating styles around the world AACSB: Written and oral communication 106) Middle Easterners typically avoid hiring mediators, as they cannot deal with direct conflicts.

Answer: FALSE Difficulty: 1: Easy Chapter: 5 Skill: Concept LO: 5-3: To gain insight into the various types of negotiating styles around the world AACSB: Diverse and multicultural work environments

33 .

107) Americans are typically calm, quiet, patient negotiators; they are accustomed to long, detailed negotiating sessions.

Answer: FALSE Difficulty: 2: Moderate Chapter: 5 Skill: Concept LO: 5-3: To gain insight into the various types of negotiating styles around the world AACSB: Diverse and multicultural work environments 108) Fundamental to Japanese culture is a concern for the welfare of the group; anything that affects one member or part of society affects the others.

Answer: TRUE Difficulty: 1: Easy Chapter: 5 Skill: Concept LO: 5-3: To gain insight into the various types of negotiating styles around the world AACSB: Diverse and multicultural work environments 109) Russians employ axiomatic appeals—that is, their appeals are based on the ideals generally accepted in their society.

Answer: TRUE Difficulty: 2: Moderate Chapter: 5 Skill: Concept LO: 5-3: To gain insight into the various types of negotiating styles around the world AACSB: Diverse and multicultural work environments 110) Compared to Indian negotiators, American negotiators are more likely to withdraw, use silence, and learn from within.

Answer: FALSE Difficulty: 1: Easy Chapter: 5 Skill: Concept LO: 5-3: To gain insight into the various types of negotiating styles around the world AACSB: Diverse and multicultural work environments 111) Italian negotiators have a sense of drama and are not afraid to hide their emotions.

Answer: TRUE Difficulty: 1: Easy Chapter: 5 Skill: Concept LO: 5-3: To gain insight into the various types of negotiating styles around the world AACSB: Diverse and multicultural work environments

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112) The term "software of negotiation" refers to the contractual terms mentioned in a written document.

Answer: FALSE Difficulty: 2: Moderate Chapter: 5 Skill: Concept LO: 5-4: To recognize that managing negotiation requires learning about the culturally based behavioral differences, values, and agendas of the negotiating parties and how to build trust for successful negotiations AACSB: Written and oral communication 113) Negotiation support systems can provide support for the negotiation process by maximizing the chances for optimal outcomes.

Answer: TRUE Difficulty: 1: Easy Chapter: 5 Skill: Concept LO: 5-4: To recognize that managing negotiation requires learning about the culturally based behavioral differences, values, and agendas of the negotiating parties and how to build trust for successful negotiations AACSB: Written and oral communication 114) Since the Chinese have a preference for emotional restraint and saving face, aggressive or emotional attempts at persuasion in negotiation are likely to fail.

Answer: TRUE Difficulty: 1: Easy Chapter: 5 Skill: Concept LO: 5-4: To recognize that managing negotiation requires learning about the culturally based behavioral differences, values, and agendas of the negotiating parties and how to build trust for successful negotiations AACSB: Diverse and multicultural work environments 115) Does culture affect the negotiation process?

Answer: In the global arena cultural differences produce great differences in the negotiation process. Lack of knowledge of the various differing bargaining rituals between countries produces significant difficulties in the negotiation process. Differences in the negotiation process from country to country include (1) the amount and type of preparation for a negotiation, (2) the relative emphasis on tasks versus interpersonal relationships, (3) the reliance on general principles rather than specific issues, and (4) the number of people present and the extent of their influence.

Difficulty: 2: Moderate Chapter: 5 Skill: Application LO: 5-1: To become familiar with the role of negotiation in implementing a firm's strategy and the various stakeholders who must be considered AACSB: Diverse and multicultural work environments 35 .

116) What is projective cognitive similarity? How do successful negotiators avoid projective cognitive similarity?

Answer: Projective cognitive similarity refers to the common practice of assuming that those you are negotiating with perceive, judge, think, and reason in the same way, when in reality they do not because of different cultural values. Successful negotiators will empathize with their counterparts and share their own viewpoint.

Difficulty: 1: Easy Chapter: 5 Skill: Concept LO: 5-1: To become familiar with the role of negotiation in implementing a firm's strategy and the various stakeholders who must be considered AACSB: Written and oral communication 117) What is negotiation?

Answer: The word negotiation describes the process of discussion between two or more parties aimed at reaching a mutually acceptable agreement. The goal of successful negotiation should be to benefit all parties involved. It is a complex activity, especially in the international context, because of differences in cultural values, lifestyles, expectations, verbal and nonverbal language, approaches to formal procedures, and problem-solving techniques. Due to the high number of stakeholders involved in international negotiations, the task becomes very complicated.

Difficulty: 1: Easy Chapter: 5 Skill: Concept LO: 5-1: To become familiar with the role of negotiation in implementing a firm's strategy and the various stakeholders who must be considered AACSB: Written and oral communication 118) How does nonverbal communication affect the negotiation process?

Answer: The most subtle behaviors in the negotiation process and often the most difficult to deal with, are usually the nonverbal messages–the use of voice intonation, facial and body expressions, eye contact, dress, and the timing of the discussion. Nonverbal behaviors are ingrained aspects of culture used by people in their daily lives; they are not specifically changed for the purposes of negotiation.

Difficulty: 2: Moderate Chapter: 5 Skill: Concept LO: 5-2: To learn the stages of the negotiation process and how to prepare for cross-cultural business negotiations AACSB: Written and oral communication

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119) Discuss the relative use of nonverbal behaviors, such as silent periods, interruptions, facial gazing, and touching by people from various cultural backgrounds. How does this affect the negotiation process in a cross-cultural context?

Answer: Nonverbal behaviors are the most subtle part of the negotiating process and the most difficult for most managers to deal with because of widely varying cultural differences.

Negotiators must be aware of their own nonverbal agendas, as well as those of the other party.

Particular attention should be placed on determining which nonverbal behaviors make the other party comfortable and uncomfortable.

In comparing the Japanese to Americans, the use of silence is viewed differently. The Japanese frequently have periods of silence, usually for reflection. In many cases Americans may assume that negotiations are not going well and offer concessions. This misunderstanding of nonverbal communication can be costly to American negotiators. Cultures also differ in terms of the desirability of physical touching. North Americans (as well as others such as Latin Americans, Arabs, etc.) are more likely to appreciate physical touch, whereas the Japanese deem it appropriate Difficulty: 2: Moderate Chapter: 5 Skill: Concept LO: 5-2: To learn the stages of the negotiation process and how to prepare for cross-cultural business negotiations AACSB: Written and oral communication 120) Discuss the stages in the negotiation process and how culturally based value systems influence these stages. Specifically, explain the role and relative importance of relationship building in different countries.

Answer: The five interrelated phases in the negotiation process are: preparation, relationship building, exchange of task information, persuasion, and concessions and agreement. Relationship building, the second stage, is more important in other parts of the world than it is in the United States. In many countries, the personal relationship forms the basis for the enforcement of contracts.

Difficulty: 2: Moderate Chapter: 5 Skill: Concept LO: 5-2: To learn the stages of the negotiation process and how to prepare for cross-cultural business negotiations AACSB: Analytical thinking

37 .

121) In what ways can communication styles differ in international negotiation?

Answer: Negotiators can differ in the way that they disagree. In some countries, the same response may adversely affect the business relationship. Negotiators can differ in terms of expressing emotion. In some cultures, it is normal to express emotions and even touch your counterpart (e.g., on the arm). In other cultures, such emotion and contact may be viewed as unprofessional, intrusive and inappropriate. Negotiators can differ in terms of how they establish trust. Some cultures value cognitive trust, which is based on how the confident one is with the counterpart's accomplishments, capabilities, and dependability. Alternatively, some cultures value affective trust, which stems from a sense of emotional attachment, empathy, and relational strength. Negotiators can differ in terms of the willingness to say "no" or with respect to what "no" means. In some cultures, people have a difficult time saying "no." Other cultures may say "no" as a means to debate the issues. Negotiators may assign a different meaning to a "contract."

In some countries, a contract signifies a deal has been reached. In other countries, a contract indicates a non-legally binding commitment to do business or simply the beginning of a business relationship.

Difficulty: 3: Challenging Chapter: 5 Skill: Application LO: 5-3: To gain insight into the various types of negotiating styles around the world AACSB: Diverse and multicultural work environments 122) What is the difference between affective, axiomatic, and factual appeals? Provide examples of cultures that use each type.

Answer: For North Americans, negotiations are businesslike; their factual appeals are based on what they believe is objective information, presented with the assumption that it is understood by the other side on a logical basis. Arabs use affective appeals based on emotions and subjective feelings. Russians employ axiomatic appeals–that is, their appeals are based on the ideals generally accepted in their society.

Difficulty: 2: Moderate Chapter: 5 Skill: Concept LO: 5-3: To gain insight into the various types of negotiating styles around the world AACSB: Diverse and multicultural work environments 123) In what ways might the American style of negotiation be misinterpreted in another culture?

Answer: The American's desire to get down to business quickly might be interpreted as a lack of concern for rigorous process or a lack of concern for relationship building. The American rational (unemotional) style might be misperceived as showing a lack of commitment. The emphasis on time might be misinterpreted as a rough tactic–attempting to pressure the other team into making a decision too quickly or before consensus has been reached.

Difficulty: 2: Moderate Chapter: 5 Skill: Concept LO: 5-3: To gain insight into the various types of negotiating styles around the world AACSB: Diverse and multicultural work environments

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124) What are the main differences between Japanese and American negotiators?

Answer: The Japanese are calm, quiet, patient negotiators; they are accustomed to long, detailed negotiating sessions. Whereas Americans often plunge straight to the matter at hand, the Japanese instead prefer to develop long-term, personal relationships. The Japanese want to get to know those on the other side and will spend some time in nontask sounding.

Difficulty: 3: Challenging Chapter: 5 Skill: Concept LO: 5-3: To gain insight into the various types of negotiating styles around the world AACSB: Diverse and multicultural work environments 125) How can modern technology, such as negotiation support systems (NSS), be used to improve the negotiating process?

Answer: NSS can provide support for the negotiation process in three ways: (1) increase the likelihood that an agreement is reached when a zone of agreement exists; (2) decrease the direct and indirect costs of negotiations; and (3) maximize the chances for optimal outcomes.

Difficulty: 1: Easy Chapter: 5 Skill: Concept LO: 5-4: To recognize that managing negotiation requires learning about the culturally based behavioral differences, values, and agendas of the negotiating parties and how to build trust for successful negotiations AACSB: Information technology 126) How is conflict during negotiations handled in high-context and low-context cultures?

Answer: In low-context cultures, such as the United States, conflict is handled directly and explicitly. It is also regarded as separate from the person negotiating–that is, the negotiators draw a distinction between the people involved and the information or opinions they represent. They also tend to negotiate on the basis of factual information and logical analysis, which is known as instrumental-oriented conflict. In high-context cultures, such as the Middle East, the approach to conflict is called expressive-oriented conflict—that is, the situation is handled indirectly and implicitly, without clear delineation of the situation by the person handling it.

Difficulty: 2: Moderate Chapter: 5 Skill: Concept LO: 5-4: To recognize that managing negotiation requires learning about the culturally based behavioral differences, values, and agendas of the negotiating parties and how to build trust for successful negotiations AACSB: Diverse and multicultural work environments

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127) Describe the process of decision making that is common in Japanese companies.

Answer: Japanese decision making is a very participative process, characterized by an elaborate and formal system for achieving consensus and agreement among everyone affected by a particular decision. This system, called the ringi system, works from the bottom up in contrast with the American centralized decision-making process, which takes a top-down approach. The ringi process consists of four steps: proposal, circulation, approval, and record.

Difficulty: 1: Easy Chapter: 5 Skill: Concept LO: 5-5: To appreciate the variables in the decision-making process and understand the influence of culture on decision making AACSB: Diverse and multicultural work environments 128) What is the difference between an internal locus of control and an external locus of control?

What cultures use each type?

Answer: Some managers feel that they can plan on certain outcomes because they are in control of events that will direct the future in the desired way. This is called internal locus of control. In contrast, other managers believe such decisions are of no value because they have little control over the future that lies in the hands of outside forces such as fate, God, or nature. This is called external locus of control. American managers function with an internal locus of control whereas managers in many other countries such as Indonesia and Malaysia do not believe they have as much control over events.

Difficulty: 3: Challenging Chapter: 5 Skill: Concept LO: 5-5: To appreciate the variables in the decision-making process and understand the influence of culture on decision making AACSB: Diverse and multicultural work environments

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International Management, 10e, (Deresky/Miller) Chapter 6 Formulating Strategy 1) ________ is the process of developing a particular international strategy.

A) Strategic planning B) Global management C) Multinational flexibility D) International strategic management Answer: A Difficulty: 1: Easy Chapter: 6 Skill: Concept LO: 6-1: To understand the reasons companies engage in international business AACSB: Application of knowledge 2) ________ is the framework that managers apply to determine the competitive moves and business approaches that run the company.

A) Competition B) Growth C) Strategy D) Vision Answer: C Difficulty: 1: Easy Chapter: 6 Skill: Concept LO: 6-1: To understand the reasons companies engage in international business AACSB: Application of knowledge 3) When developing strategies, managers start by ________.

A) configuring and coordinating the firm's activities around the world B) deciding which customers to target C) analyzing the particular opportunities and challenges that confront the firm D) examining the firm's specific strengths and weaknesses Answer: D Difficulty: 1: Easy Chapter: 6 Skill: Concept LO: 6-1: To understand the reasons companies engage in international business AACSB: Application of knowledge

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4) Which of the following activities would be considered last by a manager while developing strategies?

A) analyzing the particular challenges that confront the firm B) deciding how best to contend with competitors C) examining the firm's specific strengths and weaknesses D) analyzing the particular opportunities for the firm Answer: B Difficulty: 2: Moderate Chapter: 6 Skill: Concept LO: 6-1: To understand the reasons companies engage in international business AACSB: Application of knowledge 5) Which of the following would be considered an international business transaction?

A) purchasing products in one country and assembling them in the same country B) recruiting employees internationally C) borrowing money from a major bank to finance capital improvements D) shipping finished products from one country to another for retail sale Answer: D Difficulty: 2: Moderate Chapter: 6 Skill: Concept LO: 6-1: To understand the reasons companies engage in international business AACSB: Application of knowledge 6) Which of the following is a reactive reason for a firm to extend its operations overseas?

A) tax incentives B) economies of scale C) regulations and restrictions D) resource access and cost savings Answer: C Difficulty: 1: Easy Chapter: 6 Skill: Concept LO: 6-1: To understand the reasons companies engage in international business AACSB: Application of knowledge

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7) Trade barriers often provide a reactive reason for companies to switch from exporting to overseas manufacturing. Which of the following is not an example of a trade barrier?

A) tariffs B) quotas C) import licensing requirements D) buy-local policies Answer: C Difficulty: 1: Easy Chapter: 6 Skill: Concept LO: 6-1: To understand the reasons companies engage in international business AACSB: Application of knowledge 8) Restrictive trade barriers most likely influence the globalization of businesses by encouraging firms to ________.

A) develop joint ventures with local firms B) import supplies from foreign vendors C) expand the exportation of raw materials D) switch from exporting to overseas manufacturing Answer: D Difficulty: 2: Moderate Chapter: 6 Skill: Concept LO: 6-1: To understand the reasons companies engage in international business AACSB: Application of knowledge 9) Toyota has manufacturing plants in the United States to circumvent ________.

A) by local policies B) import quotas C) high import tariffs D) fluctuating exchange rates Answer: B Difficulty: 2: Moderate Chapter: 6 Skill: Application LO: 6-1: To understand the reasons companies engage in international business AACSB: Analytical thinking

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10) Which of the following is the most likely result of regulations and restrictions enforced by a firm's home government that prove to be expensive for the firm's operations?

A) the firm searches for less restrictive operating environments overseas B) the firm responds to customers' demands more promptly C) the firm becomes entangled in lengthy litigation D) the firm expands its domestic operations Answer: A Difficulty: 2: Moderate Chapter: 6 Skill: Concept LO: 6-1: To understand the reasons companies engage in international business AACSB: Application of knowledge 11) Due to the high demand for its handmade soaps in Canada, Fragrance Exotica, an Indian Soap manufacturer, has decided to open a new manufacturing unit in Canada, thereby expanding overseas. In this scenario, which of the following reasons prompted Fragrance Exotica to set up a manufacturing unit overseas?

A) trade barriers B) manufacturer demands C) customer demands D) tax incentives Answer: C Difficulty: 3: Challenging Chapter: 6 Skill: Application LO: 6-1: To understand the reasons companies engage in international business AACSB: Analytical thinking 12) Which of the following is the proactive reason that prompts firms to expand overseas?

A) avoiding restrictive trade barriers B) solving logistics-related problems C) responding to foreign competition D) seeking growth opportunities Answer: D Difficulty: 1: Easy Chapter: 6 Skill: Concept LO: 6-1: To understand the reasons companies engage in international business AACSB: Application of knowledge

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13) Which of the following is a reactive reason that prompts a firm to expand overseas?

A) globalization of competitors B) seeking economies of scale C) growth opportunities D) seeking incentives Answer: A Difficulty: 1: Easy Chapter: 6 Skill: Concept LO: 6-1: To understand the reasons companies engage in international business AACSB: Application of knowledge 14) Poland is seeking new infusions of capital, technology, and know-how. It announces that it shall exempt taxes, provide subsidies, loans and grant concessions for foreign investors. Which of the following measures is the country employing?

A) providing incentives B) imposing regulations C) establishing trade barriers D) ensuring economies of scale Answer: A Difficulty: 1: Easy Chapter: 6 Skill: Concept LO: 6-1: To understand the reasons companies engage in international business AACSB: Analytical thinking 15) In 2014, the Cuban government passed a law offering tax breaks for foreign companies planning joint ventures with Cuban companies or the Cuban state. This is most likely an example of a firm expanding overseas due to ________.

A) globalization of competitors B) restrictive trade barriers C) home country regulations D) provision of incentives Answer: D Difficulty: 3: Challenging Chapter: 6 Skill: Application LO: 6-1: To understand the reasons companies engage in international business AACSB: Analytical thinking

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16) Which of the following are NOT costs associated with the liability of foreignness?

A) home-country costs B) host-country costs C) unfamiliarity costs D) coordination costs Answer: D Difficulty: 1: Easy Chapter: 6 Skill: Application LO: 6-1: To understand the reasons companies engage in international business AACSB: Application of knowledge 17) Which of the following is true about liability of foreignness?

A) It reflects all additional costs a local firm operating in a market overseas incurs that a foreign firm would not incur.

B) It arises mainly from the foreign firm not being sufficiently embedded in the information networks in the country of location.

C) It affects new local firms as well as foreign firms.

D) It reflects the worldwide competitiveness of a firm.

Answer: A Difficulty: 1: Easy Chapter: 6 Skill: Application LO: 6-1: To understand the reasons companies engage in international business AACSB: Application of knowledge 18) Which of the following statements is true of the strategic formulation process?

A) The global strategic formulation process is completely independent of the process followed in domestic companies.

B) The strategic formulation process is part of the strategic management process in which most firms engage, either formally or informally.

C) Strategic formulation consists of four defined stages that occur in a consecutive order.

D) Most firms operate on planning cycles of one or two years with periodic strategy reviews.

Answer: B Difficulty: 2: Moderate Chapter: 6 Skill: Concept LO: 6-2: To become familiar with the strategic formulation process AACSB: Application of knowledge

6 .

19) Which of the following is the first stage of the strategic management process?

A) identification of value-creating activities B) formulation of strategies C) define/clarify mission and objectives D) identification of core competency Answer: C Difficulty: 1: Easy Chapter: 6 Skill: Concept LO: 6-2: To become familiar with the strategic formulation process AACSB: Application of knowledge 20) Jamie decides to plan his strategies for starting an electric equipment manufacturing company. His main aim is to ensure that it runs efficiently. He decides to do this in two phases: the planning phase and the implementation phase. Which of the following processes is Jamie employing?

A) retrenchment B) organizational restructuring C) strategic management D) globalization Answer: C Difficulty: 3: Challenging Chapter: 6 Skill: Application LO: 6-3: To learn the steps in global strategic planning, including assessing entry strategies for different markets AACSB: Analytical thinking 21) Which of the following is the first step of the planning phase of a strategic management process?

A) assessment of the external environment that the firm will face in the future B) establish the company's mission and objectives C) analysis of the firm's relative capabilities to deal successfully with the external environment D) seeking alternative strategies using competitive analysis Answer: B Difficulty: 1: Easy Chapter: 6 Skill: Concept LO: 6-3: To learn the steps in global strategic planning, including assessing entry strategies for different markets AACSB: Application of knowledge

7 .

22) The second part of the strategic management process involves the ________.

A) implementation phase B) assessment stage C) planning phase D) analysis stage Answer: A Difficulty: 1: Easy Chapter: 6 Skill: Concept LO: 6-3: To learn the steps in global strategic planning, including assessing entry strategies for different markets AACSB: Application of knowledge 23) Which of the following would be categorized as a global production objective of an international firm?

A) foreign-exchange management B) long-term profit growth C) quality and cost control D) company market share Answer: C Difficulty: 1: Easy Chapter: 6 Skill: Concept LO: 6-3: To learn the steps in global strategic planning, including assessing entry strategies for different markets AACSB: Application of knowledge 24) Which of the following would most likely be categorized as a global financial objective of an international firm?

A) effective financing of overseas subsidiaries B) long-term profit growth C) quality and cost control D) company market share Answer: A Difficulty: 1: Easy Chapter: 6 Skill: Concept LO: 6-3: To learn the steps in global strategic planning, including assessing entry strategies for different markets AACSB: Application of knowledge

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25) Which of the following would most likely be categorized as a global marketing objective of an international firm?

A) effective financing of overseas subsidiaries B) long-term profit growth C) quality and cost control D) coordination of regional markets for economies of scale Answer: D Difficulty: 1: Easy Chapter: 6 Skill: Concept LO: 6-3: To learn the steps in global strategic planning, including assessing entry strategies for different markets AACSB: Application of knowledge 26) Which of the following is NOT one of the five elements of the strategy diamond?

A) Vehicles B) Areas C) Staging D) Economic logic Answer: B Difficulty: 2: Moderate Chapter: 6 Skill: Application LO: 6-3: To learn the steps in global strategic planning, including assessing entry strategies for different markets AACSB: Application of knowledge 27) Microtech Corporation has three business divisions. Each one of them customizes its products for each national market. This company uses a(n) ________.

A) global strategy B) transnational strategy C) international strategy D) multidomestic strategy Answer: D Difficulty: 2: Moderate Chapter: 6 Skill: Application LO: 6-3: To learn the steps in global strategic planning, including assessing entry strategies for different markets AACSB: Application of knowledge

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28) Which of the following charts the direction of the company and provides a basis for strategic decision making?

A) environmental assessment B) corporate structure C) organizational mission D) SWOT analysis Answer: C Difficulty: 1: Easy Chapter: 6 Skill: Concept LO: 6-3: To learn the steps in global strategic planning, including assessing entry strategies for different markets AACSB: Application of knowledge 29) Which of the following clarifies the organization's purpose, values, and direction?

A) a code of ethics B) a SWOT analysis C) a strategic plan D) a mission statement Answer: D Difficulty: 1: Easy Chapter: 6 Skill: Concept LO: 6-3: To learn the steps in global strategic planning, including assessing entry strategies for different markets AACSB: Application of knowledge 30) Which of the following statements is true of objectives?

A) Objectives of individual business units in a company tend to be stated in the most general terms.

B) Objectives become more precise at the level of individual departments.

C) Objectives at the highest level in an organization tend to be more specific.

D) Objectives at the highest level in an organization are more concrete as they contain numerical targets.

Answer: B Difficulty: 2: Moderate Chapter: 6 Skill: Concept LO: 6-3: To learn the steps in global strategic planning, including assessing entry strategies for different markets AACSB: Application of knowledge

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31) Goals for market volume and profitability are usually set higher for international than domestic operations due to the ________.

A) fluctuating exchange rates B) presence of unstable market conditions C) involvement of greater risks D) presence of stable exchange rates Answer: C Difficulty: 2: Moderate Chapter: 6 Skill: Concept LO: 6-3: To learn the steps in global strategic planning, including assessing entry strategies for different markets AACSB: Application of knowledge 32) ________ includes the process of gathering information and forecasting relevant trends, competitive actions, and circumstances that will affect operations in geographic areas of potential interest.

A) Environmental mitigation B) Internal analysis C) Competitive analysis D) Environmental scanning Answer: D Difficulty: 1: Easy Chapter: 6 Skill: Concept LO: 6-3: To learn the steps in global strategic planning, including assessing entry strategies for different markets AACSB: Application of knowledge 33) According to the CAGE Model, which of the following refers to the physical, communications, and transportation links between countries?

A) cultural distance B) administrative distance C) geographic distance D) economic distance Answer: C Difficulty: 2: Moderate Chapter: 6 Skill: Concept LO: 6-3: To learn the steps in global strategic planning, including assessing entry strategies for different markets AACSB: Application of knowledge

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34) Which strategy combines the benefits of global scale efficiencies and local responsiveness?

A) multidomestic strategy B) home replication strategy C) transnational strategy D) global strategy Answer: C Difficulty: 2: Moderate Chapter: 6 Skill: Concept LO: 6-3: To learn the steps in global strategic planning, including assessing entry strategies for different markets AACSB: Application of knowledge 35) Which of the following terms refers to a firm's capabilities relative to those of its competitors?

A) business process reengineering B) SWOT analysis C) environmental assessment D) fundamental analysis Answer: B Difficulty: 1: Easy Chapter: 6 Skill: Concept LO: 6-3: To learn the steps in global strategic planning, including assessing entry strategies for different markets AACSB: Application of knowledge 36) Which of the following is a global risk with regard to strategic entry scanning?

A) economic and fiscal policies B) corruption C) political and economic risk D) trade restrictions Answer: C Difficulty: 1: Easy Chapter: 6 Skill: Concept LO: 6-3: To learn the steps in global strategic planning, including assessing entry strategies for different markets AACSB: Application of knowledge

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37) Which of the following is a regional risk with regard to strategic entry scanning?

A) economic and fiscal policies B) varying fiscal strategies C) repatriation policies D) shifting production and consumption Answer: A Difficulty: 1: Easy Chapter: 6 Skill: Concept LO: 6-3: To learn the steps in global strategic planning, including assessing entry strategies for different markets AACSB: Application of knowledge 38) Which of the following is a national risk with regard to strategic entry scanning?

A) energy availability and prices B) trade restrictions C) nationalism D) currency wars Answer: C Difficulty: 1: Easy Chapter: 6 Skill: Concept LO: 6-3: To learn the steps in global strategic planning, including assessing entry strategies for different markets AACSB: Application of knowledge 39) ________ includes environmental scanning and continuous monitoring to keep abreast of variables around the world that are pertinent to the firm.

A) Internal analysis B) Sustainable development C) Cultural analysis D) Environmental assessment Answer: D Difficulty: 1: Easy Chapter: 6 Skill: Concept LO: 6-3: To learn the steps in global strategic planning, including assessing entry strategies for different markets AACSB: Application of knowledge

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40) At which three levels should firms ideally perform global environmental analysis?

A) product, domestic market, and consumer B) global, regional and national C) operational, tactical, and top management D) innovation, production, and local distribution Answer: B Difficulty: 2: Moderate Chapter: 6 Skill: Concept LO: 6-3: To learn the steps in global strategic planning, including assessing entry strategies for different markets AACSB: Application of knowledge 41) The first broad scan of all potential world markets should result in the firm being able to ________.

A) identify the strengths and weaknesses of its competitors B) eliminate markets with unreasonable entry conditions C) determine the best sources for raw materials D) eliminate countries with high cultural risk Answer: B Difficulty: 2: Moderate Chapter: 6 Skill: Concept LO: 6-3: To learn the steps in global strategic planning, including assessing entry strategies for different markets AACSB: Application of knowledge 42) Which of the following is a way in which formal institutions affect international competition?

A) decreasing trade restrictions B) enforcing organizational laws C) creation of trade barriers D) enforcing strict exit barriers Answer: C Difficulty: 2: Moderate Chapter: 6 Skill: Concept LO: 6-3: To learn the steps in global strategic planning, including assessing entry strategies for different markets AACSB: Application of knowledge

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43) Which of the following is the most preferred source of environmental information for environmental scanning purposes in a firm?

A) computer database B) corporate clipping service C) internal sources D) information packages Answer: C Difficulty: 1: Easy Chapter: 6 Skill: Concept LO: 6-3: To learn the steps in global strategic planning, including assessing entry strategies for different markets AACSB: Application of knowledge 44) A(n) ________ determines which areas of a firm's operations represent strengths or weaknesses (currently or potentially) compared to competitors.

A) transactional analysis B) internal analysis C) structural analysis D) break-even analysis Answer: B Difficulty: 1: Easy Chapter: 6 Skill: Concept LO: 6-3: To learn the steps in global strategic planning, including assessing entry strategies for different markets AACSB: Application of knowledge 45) An internal analysis focuses on the company's ________.

A) resources and operations B) market share C) competitors D) foreign opportunities Answer: A Difficulty: 1: Easy Chapter: 6 Skill: Concept LO: 6-3: To learn the steps in global strategic planning, including assessing entry strategies for different markets AACSB: Application of knowledge

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46) ________ may reveal an inefficient use of assets that restricts profitability.

A) Financial ratios B) Concentration ratios C) An internal resource audit D) Competitive analyses Answer: A Difficulty: 1: Easy Chapter: 6 Skill: Concept LO: 6-3: To learn the steps in global strategic planning, including assessing entry strategies for different markets AACSB: Analytical thinking 47) ________ are usually difficult for competitors to imitate and represent a major focus for strategic development at the corporate level.

A) Break-even points B) Comparative advantages C) Absolute advantages D) Core competencies Answer: D Difficulty: 1: Easy Chapter: 6 Skill: Concept LO: 6-3: To learn the steps in global strategic planning, including assessing entry strategies for different markets AACSB: Analytical thinking 48) Futura-Core Technologies, an electronics manufacturing firm, has advantages in financial capability and sustainability, but a disadvantage in speed of innovation. It is also at a disadvantage relative to Core-Dynamix Technologies, another electronics manufacturing firm, in important factors such as manufacturing capability and adaptability to market conditions. Which of the following terms best describes Futura-Core's abilities in comparison to Core-Dynamix?

A) comparative advantage B) collective bargaining C) competitive advantage D) absolute advantage Answer: A Difficulty: 3: Challenging Chapter: 6 Skill: Application LO: 6-3: To learn the steps in global strategic planning, including assessing entry strategies for different markets AACSB: Analytical thinking

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49) ________ refers to the establishment of worldwide operations and the development of standardized products and marketing.

A) Customization B) Globalization C) Nationalization D) Regionalization Answer: B Difficulty: 1: Easy Chapter: 6 Skill: Concept LO: 6-3: To learn the steps in global strategic planning, including assessing entry strategies for different markets AACSB: Application of knowledge 50) As market globalization intensifies, ________.

A) the gap between the rich and the poor shrinks rapidly B) the distance between consumers worldwide expands C) individual firms respond to the challenges and new advantages that it brings D) firms internationalize solely as a reaction to it Answer: C Difficulty: 3: Challenging Chapter: 6 Skill: Application LO: 6-3: To learn the steps in global strategic planning, including assessing entry strategies for different markets AACSB: Application of knowledge 51) Which of the following global strategy entails the greatest degree of risk for a company?

A) fully owned subsidiaries B) greenfield investments C) strategic alliances D) acquisitions Answer: A Difficulty: 1: Easy Chapter: 6 Skill: Concept LO: 6-3: To learn the steps in global strategic planning, including assessing entry strategies for different markets AACSB: Application of knowledge

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52) Regional strategies are more appropriate than global strategies for firms that operate in ________.

A) multidomestic industries B) high-tech industries C) newly emerging industries D) mature industries Answer: A Difficulty: 2: Moderate Chapter: 6 Skill: Concept LO: 6-3: To learn the steps in global strategic planning, including assessing entry strategies for different markets AACSB: Application of knowledge 53) Columbia Cosmetics Manufacturing Inc. is a cosmetics manufacturer based in California, United States. The firm varies its products to suit the different conditions abroad. Columbia Cosmetics is an example of a ________.

A) multidomestic industry B) regional industry C) global industry D) globally integrated industry Answer: A Difficulty: 2: Moderate Chapter: 6 Skill: Application LO: 6-3: To learn the steps in global strategic planning, including assessing entry strategies for different markets AACSB: Application of knowledge 54) Which of the following most likely encourages firms to localize?

A) increasing tariffs at the host country B) economies of scale C) demand for undifferentiated, standardized products D) providing domestic subsidies Answer: B Difficulty: 2: Moderate Chapter: 6 Skill: Concept LO: 6-3: To learn the steps in global strategic planning, including assessing entry strategies for different markets AACSB: Application of knowledge

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55) Apple is an American corporation that deals with computer technology. With its worldwide sourcing and fully merged production and marketing system, Apple is considered to be a ________.

A) greenfield investment B) turnkey operation C) shell corporation D) globally integrated company Answer: D Difficulty: 3: Challenging Chapter: 6 Skill: Application LO: 6-3: To learn the steps in global strategic planning, including assessing entry strategies for different markets AACSB: Analytical thinking 56) According to Ghemawat, which of the following offers room for cross-border strategy to have content distinct from single-country strategy?

A) regional integration B) nationalization C) semi-globalization D) privatization Answer: C Difficulty: 1: Easy Chapter: 6 Skill: Concept LO: 6-3: To learn the steps in global strategic planning, including assessing entry strategies for different markets AACSB: Application of knowledge 57) Which of the following terms best describes a company that has operations in various countries, follows policies to develop local R&D to tailor products to markets, lets plants set their own rules, and aims at being a good corporate citizen in every country?

A) global company B) global elite C) counter trade D) global commons Answer: A Difficulty: 1: Easy Chapter: 6 Skill: Concept LO: 6-3: To learn the steps in global strategic planning, including assessing entry strategies for different markets AACSB: Application of knowledge

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58) ________ are companies that start out with a global reach, typically by using their Internet capabilities and also through hiring people with international experience and contacts around the world.

A) GLOCALS B) Global civics C) Born globals D) Global commons Answer: C Difficulty: 1: Easy Chapter: 6 Skill: Concept LO: 6-3: To learn the steps in global strategic planning, including assessing entry strategies for different markets AACSB: Application of knowledge 59) Which of the following is a relatively low risk way for a company to begin international expansion?

A) exporting B) licensing C) contract manufacturing D) franchising Answer: A Difficulty: 1: Easy Chapter: 6 Skill: Concept LO: 6-3: To learn the steps in global strategic planning, including assessing entry strategies for different markets AACSB: Application of knowledge 60) Which of the following is a contractual entry mode grants the rights to a firm in the host country to either produce or sell a product, or both?

A) franchising B) licensing C) management contract D) strategic alliance Answer: B Difficulty: 1: Easy Chapter: 6 Skill: Concept LO: 6-3: To learn the steps in global strategic planning, including assessing entry strategies for different markets AACSB: Application of knowledge

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61) Which of the following can be regarded as a pressure to globalize?

A) decreasing competitive clout B) information technology expansion C) increasing tariffs D) spread of economic nationalism Answer: B Difficulty: 1: Easy Chapter: 6 Skill: Concept LO: 6-3: To learn the steps in global strategic planning, including assessing entry strategies for different markets AACSB: Application of knowledge 62) Licensing is especially suitable for ________.

A) firms with a single product line and a constant technological environment B) large firms with huge financial and managerial resources for direct investment abroad C) when competition is intense and profit margins are declining D) firms that want to control all of the licensee's activities and performances Answer: C Difficulty: 2: Moderate Chapter: 6 Skill: Concept LO: 6-3: To learn the steps in global strategic planning, including assessing entry strategies for different markets AACSB: Application of knowledge 63) Which of the following statements is true of licensing?

A) Licensing restricts finances needed for international expansion.

B) Cross licensing grants a company the right to use a property but does not grant it sole access to a market.

C) It can avoid the tariffs and quotas usually imposed on exports.

D) Licensing increases the likelihood that a licensor's product will appear on the black market.

Answer: C Difficulty: 2: Moderate Chapter: 6 Skill: Concept LO: 6-3: To learn the steps in global strategic planning, including assessing entry strategies for different markets AACSB: Application of knowledge

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64) ________ is an ideal strategy for small businesses because outlets require little investment in capital or human resources.

A) A joint venture B) Franchising C) Offshoring D) A turnkey operation Answer: B Difficulty: 2: Moderate Chapter: 6 Skill: Concept LO: 6-3: To learn the steps in global strategic planning, including assessing entry strategies for different markets AACSB: Application of knowledge 65) The primary motive in using an outsourcing strategy is ________.

A) utilizing inexpensive overseas labor B) obtaining rights to patented technology C) sharing managerial expertise D) sharing financial resources Answer: A Difficulty: 2: Moderate Chapter: 6 Skill: Concept LO: 6-3: To learn the steps in global strategic planning, including assessing entry strategies for different markets AACSB: Application of knowledge

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66) Panera Bread is a chain of cafes serving sandwiches, soups, and freshly baked breads. The company began in 1981 with stores primarily located along the east coast of the United States.

Since then, the firm has expanded to over 1,300 locations throughout the United States and Canada. The firm has strong earnings and has been designated by Business Week as a "Significant Growth Company." Panera Bread executives are considering the idea of expanding globally by opening cafes in Asia through a franchising strategy. Which of the following, if true, supports the argument that Panera Bread should expand into Asia through franchising?

A) Panera Bread executives want to test the Asian market with a short-term commitment that allows them to make quick profits.

B) Panera Bread executives want fast access to the Asian market without a significant investment of capital.

C) The Panera Bread menu changes rapidly, and each cafe's artisan bread bakers receive regular training on new recipes.

D) The Panera Bread mission is to make excellent bread available to customers around the world.

Answer: B Difficulty: 3: Challenging Chapter: 6 Skill: Critical Thinking LO: 6-3: To learn the steps in global strategic planning, including assessing entry strategies for different markets AACSB: Reflective thinking 67) Panera Bread is a chain of cafes serving sandwiches, soups, and freshly baked breads. The company began in 1981 with stores primarily located along the east coast of the United States.

Since then, the firm has expanded to over 1,300 locations throughout the United States and Canada. The firm has strong earnings and has been designated by Business Week as a "Significant Growth Company." Panera Bread executives are considering the idea of expanding globally by opening cafes in Asia through a franchising strategy. Which of the following, if true, undermines the argument that Panera Bread should expand into Asia through franchising?

A) Quality control is a high priority for Panera Bread.

B) Panera Bread wants to access the Asian market quickly.

C) Panera Bread's primary competitor has already expanded to Asia.

D) Many Panera Bread managers have expressed interest in relocating to Asia.

Answer: A Difficulty: 3: Challenging Chapter: 6 Skill: Critical Thinking LO: 6-3: To learn the steps in global strategic planning, including assessing entry strategies for different markets AACSB: Reflective thinking

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68) Offshoring provides the company with access to foreign markets while avoiding ________.

A) relocation of the company to other countries B) competition between companies in the global market C) trade risks D) trade barriers Answer: D Difficulty: 1: Easy Chapter: 6 Skill: Concept LO: 6-3: To learn the steps in global strategic planning, including assessing entry strategies for different markets AACSB: Application of knowledge 69) Which of the following terms refers to operating in concentrations of related, interdependent companies within an industry that uses the same suppliers, specialized labor, and distribution channels?

A) outsourcing B) dumping C) franchising D) clustering Answer: D Difficulty: 1: Easy Chapter: 6 Skill: Concept LO: 6-3: To learn the steps in global strategic planning, including assessing entry strategies for different markets AACSB: Application of knowledge 70) Which of the following statements is true of clustering?

A) It uses different suppliers and distribution channels for interdependent companies within an industry.

B) It helps a firm gain an increase in efficiencies.

C) It seldom uses specialized labor.

D) It typically increases the costs of production and distribution.

Answer: B Difficulty: 2: Moderate Chapter: 6 Skill: Concept LO: 6-3: To learn the steps in global strategic planning, including assessing entry strategies for different markets AACSB: Analytical thinking

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71) The use of professional or skilled workers located in countries other than that of the home country is referred to as ________.

A) franchising B) licensing C) outsourcing D) importing Answer: C Difficulty: 1: Easy Chapter: 6 Skill: Concept LO: 6-3: To learn the steps in global strategic planning, including assessing entry strategies for different markets AACSB: Application of knowledge 72) Which of the following involves a company designing and constructing a facility abroad, trains local personnel, and then transfers ownership over to local management?

A) wholly owned subsidies B) turnkey projects C) joint ventures D) strategic alliances Answer: B Difficulty: 1: Easy Chapter: 6 Skill: Concept LO: 6-3: To learn the steps in global strategic planning, including assessing entry strategies for different markets AACSB: Application of knowledge 73) Which of the following is a relatively low risk entry strategy, but is likely to be short term and provide limited income to the company?

A) licensing agreement B) management contract C) turnkey operation D) lease Answer: B Difficulty: 1: Easy Chapter: 6 Skill: Concept LO: 6-3: To learn the steps in global strategic planning, including assessing entry strategies for different markets AACSB: Application of knowledge

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74) A(n) ________ gives a foreign company the rights to oversee the daily operations of a business but does not make decisions regarding ownership, financing, or strategic policy changes?

A) joint venture B) management contract C) offshoring D) fully owned subsidiary Answer: B Difficulty: 1: Easy Chapter: 6 Skill: Concept LO: 6-3: To learn the steps in global strategic planning, including assessing entry strategies for different markets AACSB: Application of knowledge 75) Which of the following strategy would involve sharing ownership with a local partner, through agreed on proportions of equity?

A) international joint venture B) greenfield investment C) turnkey operation D) offshoring Answer: A Difficulty: 3: Challenging Chapter: 6 Skill: Application LO: 6-3: To learn the steps in global strategic planning, including assessing entry strategies for different markets AACSB: Analytical thinking 76) Which of the following is an advantage of establishing a new, fully owned foreign manufacturing?

A) absence of expropriation risks B) currency stability C) realize all revenues and control D) repatriation Answer: C Difficulty: 2: Moderate Chapter: 6 Skill: Concept LO: 6-3: To learn the steps in global strategic planning, including assessing entry strategies for different markets AACSB: Application of knowledge

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77) Which of the following is generally viewed as an advantage of a service sector outsourcing strategy?

A) limited cost and risk B) lower employment costs C) share costs and risks D) realize all revenues and control Answer: B Difficulty: 1: Easy Chapter: 6 Skill: Concept LO: 6-3: To learn the steps in global strategic planning, including assessing entry strategies for different markets AACSB: Application of knowledge 78) Which of the following environmental factors would most likely increase the risk for a firm that has established a fully owned subsidiary in a country?

A) expropriation threats B) unreliable distributors C) infrastructure weaknesses D) quality control issues Answer: A Difficulty: 1: Easy Chapter: 6 Skill: Concept LO: 6-3: To learn the steps in global strategic planning, including assessing entry strategies for different markets AACSB: Application of knowledge 79) Which of the following statements best differentiates between franchising and licensing?

A) Licensing gives a company greater control than franchising over the sale of its product in a target market.

B) Franchising is common in manufacturing industries while licensing is primarily used in service industries.

C) Franchising requires ongoing assistance from the franchiser while licensing normally involves a one-time transfer of property.

D) Licensees must often meet strict guidelines on product quality, day-to-day management duties, and marketing promotions unlike franchisees.

Answer: C Difficulty: 1: Easy Chapter: 6 Skill: Concept LO: 6-3: To learn the steps in global strategic planning, including assessing entry strategies for different markets AACSB: Application of knowledge

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80) Which of the following is the primary advantage of using exporting as an entry strategy?

A) shared costs and risks B) access to highly skilled workers C) low risk D) avoidance of tariffs and regulations Answer: C Difficulty: 1: Easy Chapter: 6 Skill: Concept LO: 6-3: To learn the steps in global strategic planning, including assessing entry strategies for different markets AACSB: Application of knowledge 81) Which of the following is an internal factor that affects the choice of international entry mode for a company?

A) potential of local market B) knowledge of local market C) industrial globalization D) global experience of firm and managers Answer: D Difficulty: 1: Easy Chapter: 6 Skill: Concept LO: 6-3: To learn the steps in global strategic planning, including assessing entry strategies for different markets AACSB: Application of knowledge 82) Which of the following is an external factor that affects the choice of international entry mode for a company?

A) industry growth rate B) long-term strategy C) costs of making or enforcing contracts with local partners D) intent to conduct research and development with local partners Answer: A Difficulty: 1: Easy Chapter: 6 Skill: Concept LO: 6-3: To learn the steps in global strategic planning, including assessing entry strategies for different markets AACSB: Application of knowledge

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83) According to Gupta and Govindarajan, an alliance-based entry strategy is most suitable when ________.

A) firms have a significant amount of capital B) the risk of asymmetric learning by the partner is low C) cultural distance between home and host countries is extremely low D) the subsidiary would be highly integrated with the rest of the global operations Answer: B Difficulty: 1: Easy Chapter: 6 Skill: Concept LO: 6-3: To learn the steps in global strategic planning, including assessing entry strategies for different markets AACSB: Application of knowledge 84) Black and Decker produces tools at a plant in North Carolina and ships the tools to retailers in England. This is an example of which type of international business activity?

A) merchandising B) importing C) exporting D) trading Answer: C Difficulty: 2: Moderate Chapter: 6 Skill: Application LO: 6-3: To learn the steps in global strategic planning, including assessing entry strategies for different markets AACSB: Application of knowledge 85) ________ are investments made for the purpose of actively controlling property, assets, or companies located in host countries.

A) Licensing investments B) Portfolio investments C) Fully owned subsidiaries D) Indirect global investments Answer: C Difficulty: 1: Easy Chapter: 6 Skill: Concept LO: 6-3: To learn the steps in global strategic planning, including assessing entry strategies for different markets AACSB: Application of knowledge

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86) ________ is a contractual arrangement in which a firm in one country allows the use of its intellectual property by a firm in a second country in return for a royalty payment.

A) Leasing B) Franchising C) Licensing D) Merchandising Answer: C Difficulty: 1: Easy Chapter: 6 Skill: Concept LO: 6-3: To learn the steps in global strategic planning, including assessing entry strategies for different markets AACSB: Application of knowledge 87) Walt Disney permits a German clothing manufacturer to market children's pajamas embroidered with Mickey Mouse in return for a percentage of company sales. This is an example of ________.

A) franchising B) licensing C) leasing D) piracy Answer: B Difficulty: 2: Moderate Chapter: 6 Skill: Application LO: 6-3: To learn the steps in global strategic planning, including assessing entry strategies for different markets AACSB: Application of knowledge 88) A(n) ________ involves a firm in one country agreeing to operate facilities for a firm in another country for an agreed fee.

A) franchising agreement B) licensing agreement C) management contract D) indirect investment Answer: C Difficulty: 2: Moderate Chapter: 6 Skill: Application LO: 6-3: To learn the steps in global strategic planning, including assessing entry strategies for different markets AACSB: Application of knowledge

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89) Using Rivoli and Salorio's framework, assume there is high uncertainty in a country and that the company's proposed investment is highly irreversible investment. Identify the conditions in which a firm will "Get toes wet or investigate alternative mode."

A) Monopolistic advantages, Low country early mover advantages B) Monopolistic advantages, High country early mover advantages C) Non-monopolistic advantages, Low country early mover advantages D) Non-monopolistic advantages, High country early mover advantages Answer: B Difficulty: 3: Challenging Chapter: 6 Skill: Application LO: 6-4: To understand the need for strategic planning for emerging markets AACSB: Application of knowledge 90) Using Rivoli and Salorio's framework, assume there is high uncertainty in a country and that the company's proposed investment is highly irreversible investment. Identify the conditions in which a firm will "Wait for competitors' moves and follow if they invest."

A) Monopolistic advantages; Low country early mover advantages B) Monopolistic advantages; High country early mover advantages C) Non-monopolistic advantages; Low country early mover advantages D) Non-monopolistic advantages; High country early mover advantages Answer: C Difficulty: 2: Moderate Chapter: 6 Skill: Application LO: 6-4: To understand the need for strategic planning for emerging markets AACSB: Application of knowledge 91) The process by which a firm's managers evaluate the future prospects of the firm and set long term objectives and then identify the appropriate courses of action need to accomplish those objectives is called strategic planning.

Answer: TRUE Difficulty: 1: Easy Chapter: 6 Skill: Concept LO: 6-1: To understand the reasons companies engage in international business AACSB: Application of knowledge 92) The imposition of trade barriers is one of the reactive reasons that prompt a company to operate overseas.

Answer: TRUE Difficulty: 1: Easy Chapter: 6 Skill: Concept LO: 6-1: To understand the reasons companies engage in international business AACSB: Application of knowledge 31 .

93) A firm's home government regulations and restrictions can become so expensive that companies will seek out more restrictive foreign operating environments.

Answer: FALSE Difficulty: 2: Moderate Chapter: 6 Skill: Concept LO: 6-1: To understand the reasons companies engage in international business AACSB: Application of knowledge 94) A company will often consider establishing operations in a foreign country as a response to increased customer demand.

Answer: TRUE Difficulty: 1: Easy Chapter: 6 Skill: Concept LO: 6-1: To understand the reasons companies engage in international business AACSB: Application of knowledge 95) One pressing reason for many large firms to expand overseas is to pursue growth opportunities.

Answer: TRUE Difficulty: 2: Moderate Chapter: 6 Skill: Concept LO: 6-1: To understand the reasons companies engage in international business AACSB: Application of knowledge 96) Trade barriers, such as tariffs and quotas, increase risk and decreases profits. Hence, they are attractive to foreign companies.

Answer: TRUE Difficulty: 2: Moderate Chapter: 6 Skill: Concept LO: 6-1: To understand the reasons companies engage in international business AACSB: Application of knowledge 97) The first phase of the strategic management process is the planning phase, which requires structure, systems and processes to make the strategy work.

Answer: FALSE Difficulty: 1: Easy Chapter: 6 Skill: Concept LO: 6-2: To become familiar with the strategic formulation process AACSB: Application of knowledge

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98) Production, one of the five global corporate objectives, deals with development of new products with global patents.

Answer: FALSE Difficulty: 2: Moderate Chapter: 6 Skill: Concept LO: 6-3: To learn the steps in global strategic planning, including assessing entry strategies for different markets AACSB: Application of knowledge 99) After clarifying the corporate mission and objectives, the first major step in weighing international strategic options is the environmental assessment.

Answer: TRUE Difficulty: 2: Moderate Chapter: 6 Skill: Concept LO: 6-3: To learn the steps in global strategic planning, including assessing entry strategies for different markets AACSB: Application of knowledge 100) Environmental scanning should be conducted only on the local level exclusively.

Answer: FALSE Difficulty: 2: Moderate Chapter: 6 Skill: Concept LO: 6-3: To learn the steps in global strategic planning, including assessing entry strategies for different markets AACSB: Application of knowledge 101) An environmental assessment, includes environmental scanning and continuous monitoring to keep abreast of variables around the world that are pertinent to the firm.

Answer: TRUE Difficulty: 1: Easy Chapter: 6 Skill: Concept LO: 6-3: To learn the steps in global strategic planning, including assessing entry strategies for different markets AACSB: Application of knowledge

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102) Companies of all sizes are increasingly looking to the Internet as a means of expanding their global operations.

Answer: TRUE Difficulty: 1: Easy Chapter: 6 Skill: Application LO: 6-3: To learn the steps in global strategic planning, including assessing entry strategies for different markets AACSB: Application of knowledge 103) Political and economic risk in a particular country introduces a high degree of uncertainty and, in turn, raises concerns about the foreign direct investment decision by managers of multinational enterprises.

Answer: TRUE Difficulty: 1: Easy Chapter: 6 Skill: Concept LO: 6-4: To understand the need for strategic planning for emerging markets AACSB: Application of knowledge 104) What is strategy? What is strategic planning?

Answer: Strategy is the basic means by which a company competes. It includes the choice of business or businesses in which to operate and the ways to differentiate itself from competitors.

Strategic planning is the process by which a firm's managers evaluate the future prospects of the firm and decide on appropriate strategies to achieve long-term objectives.

Difficulty: 1: Easy Chapter: 6 Skill: Concept LO: 6-1: To understand the reasons companies engage in international business AACSB: Application of knowledge 105) List the reasons a company would have if it wants to operate internationally.

Answer: A company can operate internationally for different reasons. These reasons are of two types: reactive (or defensive) and proactive (or aggressive). The reactive reasons are globalization of competitors, trade barriers, regulations and restrictions, and customer demands.

The proactive reasons are seeking economies of scale, growth opportunities, resource access and cost savings, and incentives.

Difficulty: 1: Easy Chapter: 6 Skill: Concept LO: 6-1: To understand the reasons companies engage in international business AACSB: Application of knowledge

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106) Briefly describe the strategy formulation process of international organizations.

Answer: The strategy-formulation process involves both planning and strategy. Strategy formulation permits managers to step back from day-to-day activities and get a fresh perspective on the current and future direction of the company and its industry.

Identify Company Mission and Goals-Most companies have a general purpose for why they exist that they express in a mission statement—a written statement of why a company exists and what it plans to accomplish.

The first phase of the strategic management process, the planning phase, starts with the company establishing its mission and overall objectives. The next two steps comprise an assessment of the external environment that the firm faces in the future and an analysis of the firm's relative capabilities to deal successfully with the environment. Strategic alternatives are then considered, and then plans are made on the strategic choice. These five steps constitute the planning phase.

The second part of the strategic management process is the implementation phase. Successful implementation requires the establishment of the structure, systems, and processes suitable to make the strategy work.

Difficulty: 1: Easy Chapter: 6 Skill: Concept LO: 6-2: To become familiar with the strategic formulation process AACSB: Application of knowledge 107) What is environmental scanning? What areas are most commonly focused in environmental scanning?

Answer: Environmental scanning is the process of gathering information and forecasting relevant trends, competitive actions, and circumstances that will affect operations in geographic areas of potential interest. This activity should be conducted on three levels—multinational, regional, and national. Scanning should focus on the future interests of the firm and should cover the major variables such as political and economic risk; major technological, legal, and physical constraints; and the global competitive arena, as well as the opportunities available in different countries.

Difficulty: 2: Moderate Chapter: 6 Skill: Concept LO: 6-3: To learn the steps in global strategic planning, including assessing entry strategies for different markets AACSB: Application of knowledge

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108) What is the difference between environmental scanning at the multinational level and the regional level?

Answer: Companies should assess the multinational level for significant worldwide trends through identification, monitoring, and forecasting activities. These trends would include the political and economic developments of nations around the world, as well as global technological progress. From this information, managers can choose certain appropriate regions of the world to consider further. At the regional level, the analysis should focus more on the critical environmental factors that would generate threats or opportunities for marketing the company's products, services, or technologies.

Difficulty: 2: Moderate Chapter: 6 Skill: Concept LO: 6-3: To learn the steps in global strategic planning, including assessing entry strategies for different markets AACSB: Application of knowledge 109) What are the five forces identified in Michael Porter's industry based model, that examines the dynamics within an industry?

Answer: (1) The relative level of global and local competition already in the industry, (2) The relative ease with which new competitors may or may not enter the market, (3) The degree of power that buyers have within the industry, (4) The level of bargaining power of the suppliers within the industry, and (5) The level of threat of substitute products or services.

Difficulty: 2: Moderate Chapter: 6 Skill: Application LO: 6-3: To learn the steps in global strategic planning, including assessing entry strategies for different markets AACSB: Application of knowledge 110) What are the five elements of strategy based on the "Strategy Diamond," which was developed by Donald Hambrick and James Frederickson?

Answer: The diamond identifies five elements of a firm's strategy: (1) Arenas, (2) Vehicles, (3) Differentiators, (4) Economic Logic, and (5) Staging. Arenas answers the question "In what business will we compete?" The Vehicles describe the manner in which the arenas will be served, "How will we get there?" The Differentiators describe how a firm will succeed in the marketplace, Economic logic stresses how a firm will generate profits and Staging capture the pace and sequence of major strategic moves of a firm.

Difficulty: 2: Moderate Chapter: 6 Skill: Application LO: 6-3: To learn the steps in global strategic planning, including assessing entry strategies for different markets AACSB: Application of knowledge

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111) Describe the various sources of information that are available to managers.

Answer: The various sources of information that are available to managers are: (1) computer databases, having business information services that are tailored to specific industries and regions; (2) corporate "clipping" services; (3) information packages; (4) alert field personnel who, with firsthand observations, can provide up-to-date and relevant information for the firm.

Difficulty: 2: Moderate Chapter: 6 Skill: Concept LO: 6-3: To learn the steps in global strategic planning, including assessing entry strategies for different markets AACSB: Application of knowledge 112) What is a SWOT analysis? How is it used in strategic planning?

Answer: A SWOT analysis is a summary of the external issues (opportunities and threats) and internal resources (strengths and weaknesses) that are most likely to influence the future or intended direction of the firm. In comparing the company with potential international competitors in host markets, a SWOT analysis becomes useful for managers to draw up a competitive position matrix for each potential location. This analysis is used after assessing the external and internal environments to help firms determine their strategic direction.

Difficulty: 1: Easy Chapter: 6 Skill: Concept LO: 6-3: To learn the steps in global strategic planning, including assessing entry strategies for different markets AACSB: Application of knowledge 113) Describe the strategies of globalization and regionalization. When can each strategy be used most effectively?

Answer: A globalization strategy is based on the premise that the world can be treated as an undifferentiated marketplace and the firm can develop and market standardized products. The rationale is to compete by establishing worldwide economies of scale, offshore manufacturing, and international cash flows. Companies such as Sony, Caterpillar, and ICI follow globalization strategies. A regionalization strategy is more effective for those firms that are in multidomestic industries. In such cases, local markets are linked together within a region, allowing more local responsiveness and specialization. Top managers within each region decide on their own investment locations, product mixes, and competitive positioning–thus running their subsidiaries as quasi-independent organizations. Such a strategy often reduces environmental risk and allows for more adaptation to the local market. Samsung Tesco is an example of a firm that has successfully used the regionalization strategy.

Difficulty: 2: Moderate Chapter: 6 Skill: Concept LO: 6-3: To learn the steps in global strategic planning, including assessing entry strategies for different markets AACSB: Application of knowledge

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114) What are the two levels of strategic alternatives that a firm must consider when competing internationally?

Answer: The first level, global strategic alternatives, determines what overall approach to the global marketplace a firm wishes to take. The second level, entry strategy alternatives, applies to firms of any size; these alternatives determine what specific entry strategy is appropriate for each country in which the firm plans to operate.

Difficulty: 1: Easy Chapter: 6 Skill: Concept LO: 6-3: To learn the steps in global strategic planning, including assessing entry strategies for different markets AACSB: Application of knowledge 115) What strategic management challenges are faced by international businesses that have business units scattered around the world? How can a business strategy help improve a firm's ability to compete?

Answer: Managers in an international business must coordinate the implementation of their firm's strategy among business units located in different parts of the world with different time zones, different cultural contexts, and different economic conditions, as well as monitoring and controlling their performance. Business strategy focuses on specific businesses, subsidiaries, or operating units within the firm. Business strategy seeks to answer the question: "How should we compete in each market we have chosen to enter?" By focusing on the competitive environment of each business, business strategy helps the firm improve its distinctive competence for that business or unit. Once a firm selects a business strategy, it typically uses that strategy in all geographical markets they serve. The firm may develop a unique business strategy for each of its divisions, or it may pursue the same business strategy for all of them.

Difficulty: 3: Challenging Chapter: 6 Skill: Synthesis LO: 6-4: To understand the need for strategic planning for emerging markets AACSB: Application of knowledge

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International Management, 10e, (Deresky/Miller) Chapter 7 Implementing Strategy 1) ________ are partnerships between two or more firms that decide they can better pursue their mutual goals by combining their resources as well as their existing distinctive competitive advantages.

A) Greenfield investments B) Strategic alliances C) Foreign subsidiaries D) Turnkey operations Answer: B Difficulty: 1: Easy Chapter: 7 Skill: Concept LO: 7-1: To become familiar with the types of strategic alliances for international business, the challenges in implementing them, and guidelines for success in alliances AACSB: Application of knowledge 2) Company X and Company Z have established a business arrangement whereby the two firms will cooperate for their mutual benefit. Which of the following has most likely been established?

A) competitive advantage B) licensing agreement C) franchising arrangement D) strategic alliance Answer: D Difficulty: 1: Easy Chapter: 7 Skill: Concept LO: 7-1: To become familiar with the types of strategic alliances for international business, the challenges in implementing them, and guidelines for success in alliances AACSB: Application of knowledge 3) Alliances are also known as ________.

A) competitive strategies B) cooperative agreements C) relational strategies D) virtual strategies Answer: B Difficulty: 1: Easy Chapter: 7 Skill: Concept LO: 7-1: To become familiar with the types of strategic alliances for international business, the challenges in implementing them, and guidelines for success in alliances AACSB: Application of knowledge

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4) ________ are transition mechanisms that propel the partners' strategies forward in a turbulent environment faster than would be possible for each company alone.

A) Cooperative agreements B) Entry strategies C) Options strategies D) Competitive strategies Answer: A Difficulty: 1: Easy Chapter: 7 Skill: Concept LO: 7-1: To become familiar with the types of strategic alliances for international business, the challenges in implementing them, and guidelines for success in alliances AACSB: Application of knowledge 5) Nestle and General Mills created Cereal Partners Worldwide to compete effectively in the European market. Cereal Partners Worldwide is owned equally by the two firms, so CPW is an example of a(n) ________.

A) franchising arrangement B) acquisition strategy C) joint venture D) FDI Answer: C Difficulty: 1: Easy Chapter: 7 Skill: Concept LO: 7-1: To become familiar with the types of strategic alliances for international business, the challenges in implementing them, and guidelines for success in alliances AACSB: Application of knowledge 6) A ________ is a special type of strategic alliance in which two or more firms join together to create a new business entity that is legally separate and distinct from its parents.

A) joint venture B) licensing agreement C) franchising arrangement D) greenfield strategy Answer: A Difficulty: 1: Easy Chapter: 7 Skill: Concept LO: 7-1: To become familiar with the types of strategic alliances for international business, the challenges in implementing them, and guidelines for success in alliances AACSB: Application of knowledge

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7) All of the following would be examples of international joint ventures EXCEPT ________.

A) two Japanese companies sharing ownership of a company in Canada B) a Danish company sharing ownership with a South African company in South Africa C) a government-owned company from China sharing ownership with an Australian company in Panama D) two Venezuelan companies sharing ownership of a company in Venezuela Answer: D Difficulty: 3: Challenging Chapter: 7 Skill: Application LO: 7-1: To become familiar with the types of strategic alliances for international business, the challenges in implementing them, and guidelines for success in alliances AACSB: Analytical thinking 8) A(n) ________ refers to a JV among companies in different countries.

A) international joint venture B) equity joint venture C) global joint venture D) transnational joint venture Answer: A Difficulty: 1: Easy Chapter: 7 Skill: Concept LO: 7-1: To become familiar with the types of strategic alliances for international business, the challenges in implementing them, and guidelines for success in alliances AACSB: Application of knowledge 9) Which of the following is the most beneficial aspect of an international joint venture?

A) the international partner receives the entire profit B) the responsibility of risks is solely taken by the international partner C) the partner's local contacts and markets will be utilized D) the entire cost of production will be borne by the local partner Answer: C Difficulty: 2: Moderate Chapter: 7 Skill: Concept LO: 7-1: To become familiar with the types of strategic alliances for international business, the challenges in implementing them, and guidelines for success in alliances AACSB: Application of knowledge

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10) Trout Corp., Kirgo Ltd., and Sturgeon Inc., three of the leading construction companies in the United States, have decided to join hands and create a new cement manufacturing company.

According to their agreement, Trout Corp. will have 20 percent equity, Kirgo Ltd. will have 30 percent equity, and Sturgeon Inc. will have 50 percent equity. In this given scenario, Sturgeon Inc. is referred to as a ________.

A) minority JV partner B) majority JV partner C) sole proprietor D) franchisor Answer: B Difficulty: 2: Moderate Chapter: 7 Skill: Application LO: 7-1: To become familiar with the types of strategic alliances for international business, the challenges in implementing them, and guidelines for success in alliances AACSB: Analytical thinking 11) What is an equity alliance?

A) a collaborative arrangement in which at least one collaborating company takes an ownership position in the other B) a collaboration in which each contributor receives an equitable return based on relative contribution C) a collaboration in which partners agree to share technology with each other D) a wholly owned acquisition to prevent appropriation of intellectual property Answer: A Difficulty: 1: Easy Chapter: 7 Skill: Concept LO: 7-1: To become familiar with the types of strategic alliances for international business, the challenges in implementing them, and guidelines for success in alliances AACSB: Application of knowledge 12) France's Thomson Electronics combined with China's TCL to form TCL-Thomson Electronics. Thomson owns 60% and TCL owns the remaining 40% of TCL-Thomson Electronics. This is best described as a(n) ________.

A) turnkey operation B) acquisition C) international licensing agreement D) equity strategic alliance Answer: D Difficulty: 3: Challenging Chapter: 7 Skill: Application LO: 7-1: To become familiar with the types of strategic alliances for international business, the challenges in implementing them, and guidelines for success in alliances AACSB: Analytical thinking 4 .

13) Alliances that are carried out through contract rather than ownership sharing are called ________.

A) cultural strategic alliances B) equity strategic alliances C) non-equity strategic alliances D) transmodal strategic alliances Answer: C Difficulty: 1: Easy Chapter: 7 Skill: Concept LO: 7-1: To become familiar with the types of strategic alliances for international business, the challenges in implementing them, and guidelines for success in alliances AACSB: Application of knowledge 14) Runnerz Inc., a leading manufacturing and retail company that designs and develops footwear and apparel, has signed a contract with a particular courier service for managing the delivery process. The courier service is required to deliver goods from the factory to the warehouse, to customers, and also to collect customer payments for the goods. This is a typical example of a(n) ________.

A) non-equity strategic alliance B) turnkey operation C) greenfield investment D) international licensing agreement Answer: A Difficulty: 3: Challenging Chapter: 7 Skill: Application LO: 7-1: To become familiar with the types of strategic alliances for international business, the challenges in implementing them, and guidelines for success in alliances AACSB: Analytical thinking 15) ________ refers to value achieved through the combination of market entry, risk sharing, and learning potential that is greater than what the firm could have done alone.

A) Shared risk B) Shared knowledge C) Synergy D) Scale economy Answer: C Difficulty: 2: Moderate Chapter: 7 Skill: Concept LO: 7-1: To become familiar with the types of strategic alliances for international business, the challenges in implementing them, and guidelines for success in alliances AACSB: Application of knowledge

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16) When Toyota and GM created a joint venture because Toyota wanted to learn about how to deal with labor and parts suppliers in the U.S. market while GM wanted to observe Japanese management practices. What benefit of strategic alliances were Toyota and GM primarily seeking?

A) ease of market entry B) shared risk C) shared knowledge D) synergy Answer: C Difficulty: 2: Moderate Chapter: 7 Skill: Concept LO: 7-1: To become familiar with the types of strategic alliances for international business, the challenges in implementing them, and guidelines for success in alliances AACSB: Application of knowledge 17) Which of the following types of alliances can be formed between a company and a foreign government?

A) international joint venture B) equity strategic alliance C) non-equity strategic alliance D) global strategic alliance Answer: D Difficulty: 2: Moderate Chapter: 7 Skill: Concept LO: 7-1: To become familiar with the types of strategic alliances for international business, the challenges in implementing them, and guidelines for success in alliances AACSB: Application of knowledge 18) Which of the following is NOT a typical reason for forming cross-border alliances?

A) to avoid import barriers B) to share R&D costs and risks C) to gain access to specific markets D) to test marketing campaigns overseas Answer: D Difficulty: 2: Moderate Chapter: 7 Skill: Concept LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies AACSB: Application of knowledge

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19) Which of the following motivates a company to form cross-border alliances?

A) to regulate and favor domestic companies B) to gain rapid entry into a new and consolidating market C) to remove exporting barriers for domestic companies D) to allow local companies to gain access to international products and services Answer: B Difficulty: 2: Moderate Chapter: 7 Skill: Concept LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies AACSB: Application of knowledge 20) Globe Cars, a leading automobile ancillary firm in China, has decided to form a global alliance with Fulda, a German tire manufacturing company. Which of the following is a primary challenge that Globe Cars is most likely to face in this alliance?

A) existing competitors B) risk of investment C) extreme trade barriers in China D) differences in national cultures Answer: D Difficulty: 3: Challenging Chapter: 7 Skill: Application LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies AACSB: Analytical thinking 21) Which of the following is a pitfall of cross-border alliances?

A) increase in the number of existing competitors B) disputes over management C) convincing expatriates D) finding local skilled employees Answer: B Difficulty: 2: Moderate Chapter: 7 Skill: Concept LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies AACSB: Application of knowledge

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22) Which of the following factors greatly influences the success of multinational firm alliances?

A) form of governance chosen B) introduction of new competition C) differing national cultures D) cumulative learning of partner Answer: A Difficulty: 2: Moderate Chapter: 7 Skill: Concept LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies AACSB: Application of knowledge 23) Joint ventures are often the chosen form of multinational firm alliances because they ________.

A) provide greater control of proprietary technology B) increase the level of competition between partner firms C) enhance the specific skills of the personnel D) enhance the rewards of the firm Answer: A Difficulty: 2: Moderate Chapter: 7 Skill: Concept LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies AACSB: Application of knowledge 24) IMAX, the entertainment firm, enters into a joint venture with Wanda Cinema Line, a Chinese theater chain. What is IMAX primarily seeking by forming this arrangement?

A) easing entry into the Chinese market B) acquiring technology from the Chinese firm C) reducing economies of scale in China D) obtaining a growing, niche Chinese market Answer: A Difficulty: 2: Moderate Chapter: 7 Skill: Concept LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies AACSB: Application of knowledge

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25) According to researcher David Lei, the single greatest impediment managers face when seeking to learn or renew sources of competitive advantage is that ________.

A) good venture partners are hard to find B) technologies change very rapidly C) partners can become competitors D) governments can be fickle Answer: C Difficulty: 2: Moderate Chapter: 7 Skill: Concept LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies AACSB: Application of knowledge 26) Cross-border allies often have difficulty collaborating effectively, especially in competitively sensitive areas. This generally leads to ________.

A) mistrust and secrecy B) limitation of investment C) short-term corporate restructuring D) lowering of exit barriers Answer: A Difficulty: 2: Moderate Chapter: 7 Skill: Concept LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies AACSB: Application of knowledge 27) The initial challenge in implementing strategies in emerging markets is likely to be how to ________.

A) compete with other emerging markets B) allocate responsibilities between the partners C) set up new policies and regulations D) navigate poor infrastructures Answer: D Difficulty: 2: Moderate Chapter: 7 Skill: Concept LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies AACSB: Application of knowledge

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28) The dual role of strategic alliance refers to the ________.

A) constant requirement of resources and markets B) process of finding skilled personnel and training them to work efficiently C) conflict between cooperation and competition D) differences between home and host governments Answer: C Difficulty: 2: Moderate Chapter: 7 Skill: Concept LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies AACSB: Application of knowledge 29) All of the following are cooperative aspects of strategic alliances, EXCEPT ________.

A) creating economies of scale in tangible assets B) forming upstream–downstream divisions of labor C) limiting investment risks through shared resources D) learning new intangible skills from alliance partners Answer: D Difficulty: 2: Moderate Chapter: 7 Skill: Concept LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies AACSB: Application of knowledge 30) Which of the following is a competitive aspect of strategic alliances?

A) sharing resources to limit investment risk when entering new markets or uncertain technological fields B) lowering exit barriers in mature industries, therefore, assisting short-term corporate restructurings C) accelerating diffusion of industry standards and new technologies to create barriers to entry D) creating a critical mass to develop new technologies to protect domestic, strategic industries Answer: C Difficulty: 2: Moderate Chapter: 7 Skill: Concept LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies AACSB: Application of knowledge

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31) Which of the following is a cooperative aspect of strategic alliances?

A) creating economies of scale in tangible assets B) accelerating diffusion of industry standards to erect barriers to entry C) learning new intangible skills from alliance partners D) denying technological and learning initiative to partners Answer: A Difficulty: 2: Moderate Chapter: 7 Skill: Concept LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies AACSB: Application of knowledge 32) Parent companies use the IJV control process in order to ensure that the management of the joint venture conforms to ________.

A) international accounting standards B) qualitative standards C) its own interests D) industry standards Answer: C Difficulty: 2: Moderate Chapter: 7 Skill: Concept LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies AACSB: Application of knowledge 33) ________ is the overall pattern of structural components and configurations used to manage the total organization.

A) Organizational design B) Functional design C) Management D) Strategy Answer: A Difficulty: 2: Moderate Chapter: 7 Skill: Concept LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies AACSB: Application of knowledge

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34) Organizational design as a mechanism for factoring international joint venture control refers to the ________.

A) human resource plans and policies of the joint venture B) market share and profitability ratios of the organization C) geographic location of the joint venture's facilities D) amount of decision-making power that the joint venture holds Answer: D Difficulty: 2: Moderate Chapter: 7 Skill: Concept LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies AACSB: Application of knowledge 35) ________ refers to the processes that management puts in place in order to direct the success of the joint venture's goals.

A) IJV control B) Knowledge management C) Turnkey operations D) Offshoring Answer: A Difficulty: 1: Easy Chapter: 7 Skill: Concept LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies AACSB: Application of knowledge 36) The most important single factor determining IJV success or failure is the ________.

A) percentage of equity share held by each partner B) choice of a partner C) proprietary technologies held by a partner D) amount of decision-making control given to each firm Answer: B Difficulty: 2: Moderate Chapter: 7 Skill: Concept LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies AACSB: Application of knowledge

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37) International joint ventures are like a marriage because ________.

A) the firms cannot be separated into single entities after the merging B) each firm will have access to all of the others' proprietary technologies and competitively sensitive information C) the more issues that can be settled before the merger, the less likely it will be to break up D) each firm will have equal decision-making powers Answer: C Difficulty: 2: Moderate Chapter: 7 Skill: Concept LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies AACSB: Application of knowledge 38) International joint ventures are less likely to break up when ________.

A) issues are settled before the merger B) new policies are created after the merger C) one partner has all the decision-making autonomy and the other has none D) each firm explicitly states its actions and requirements after the merger Answer: A Difficulty: 2: Moderate Chapter: 7 Skill: Concept LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies AACSB: Application of knowledge 39) Which of the following human resource problems can be simplified by increasing the autonomy of the IJV? A) workplace deviance B) employment discrimination C) staffing friction D) employee silence Answer: C Difficulty: 1: Easy Chapter: 7 Skill: Concept LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies AACSB: Application of knowledge

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40) In spite of the potential problems with local partners, many firms rush the process of partner selection because ________.

A) they want to reduce the amount spent on establishing subsidiaries abroad B) they want to take advantage of the local partner's technological innovations C) they mostly aim at increasing the number of equity shares within a short period of time D) they are anxious to get into an attractive market Answer: D Difficulty: 2: Moderate Chapter: 7 Skill: Concept LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies AACSB: Application of knowledge 41) With regard to less-developed countries, most problems with international joint ventures involve ________.

A) the parent corporation B) the local partner C) differences in accounting standards between nations D) differences in control system information management between nations Answer: B Difficulty: 2: Moderate Chapter: 7 Skill: Concept LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies AACSB: Application of knowledge 42) Where ownership is divided among several partners, the parent organizations are more likely to delegate the operational running of the IJV to ________.

A) local IJV management B) parent company management C) middle managers at the parent company level D) management teams from the largest company in the joint venture Answer: A Difficulty: 2: Moderate Chapter: 7 Skill: Concept LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies AACSB: Application of knowledge

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43) All of the following are examples of IJV control mechanisms used by parent firms EXCEPT ________.

A) staffing policies B) legal contracts C) regional authorities D) organizational design Answer: C Difficulty: 2: Moderate Chapter: 7 Skill: Concept LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies AACSB: Application of knowledge 44) Which of the following primarily determines the extent of control exercised over an IJV by its parent company?

A) staffing choices for top IJV positions B) policies of the smaller firm C) cultural background D) IJV industry Answer: A Difficulty: 2: Moderate Chapter: 7 Skill: Concept LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies AACSB: Application of knowledge 45) MNCs often partner with local SMEs in order to ________.

A) capture new innovations and ideas B) reduce the potential risks of the company C) ensure international expansion D) maximize the autonomy of the partners Answer: A Difficulty: 1: Easy Chapter: 7 Skill: Concept LO: 7-3: To consider how to manage the firm's performance in international joint ventures, with attention to knowledge management, government and cultural influence, and the role of ecommerce AACSB: Application of knowledge

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46) According to researcher Dovev Lavie, which of the following is a value-creation strategy?

A) setting organizational buffers between competing partners B) allying with multiple partners in one industry to limit power C) assimilating network resources to acquire new skills and capabilities D) aligning organizational units to create coherent interfaces Answer: C Difficulty: 1: Easy Chapter: 7 Skill: Concept LO: 7-3: To consider how to manage the firm's performance in international joint ventures, with attention to knowledge management, government and cultural influence, and the role of ecommerce AACSB: Application of knowledge 47) According to researcher Dovev Lavie, which of the following is a caution given to global companies by value capture strategies?

A) Set organizational and technological buffers between competing partners.

B) Avoid partners that compete in your industry if they enjoy superior bargaining power.

C) Learn and assimilate network resources in order to develop new skills and capabilities.

D) Align organizational units and create a coherent interface with each partner in the alliance.

Answer: B Difficulty: 1: Easy Chapter: 7 Skill: Concept LO: 7-3: To consider how to manage the firm's performance in international joint ventures, with attention to knowledge management, government and cultural influence, and the role of ecommerce AACSB: Application of knowledge 48) In order to minimize potential problems in alliances, companies should most likely choose partners with ________.

A) competitively sensitive technology B) complementary products and skills C) significant control of the target market D) superior bargaining power in the same industry Answer: B Difficulty: 1: Easy Chapter: 7 Skill: Concept LO: 7-3: To consider how to manage the firm's performance in international joint ventures, with attention to knowledge management, government and cultural influence, and the role of ecommerce AACSB: Application of knowledge

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49) Which of the following is NOT a characteristic of strategic implementation of the McDonald's corporation?

A) minimizing autonomy B) hiring locals whenever possible C) forming paradigm-busting arrangements with suppliers D) making minor changes to the standard menu based on location Answer: A Difficulty: 2: Moderate Chapter: 7 Skill: Concept LO: 7-3: To consider how to manage the firm's performance in international joint ventures, with attention to knowledge management, government and cultural influence, and the role of ecommerce AACSB: Application of knowledge 50) Which of the following is an implementation strategy used by McDonald's?

A) keeping prices low to build market share B) altering menu items significantly to match cultural norms C) using American managers to run international franchises D) forming joint ventures with foreign restaurants to enter new markets Answer: A Difficulty: 2: Moderate Chapter: 7 Skill: Concept LO: 7-3: To consider how to manage the firm's performance in international joint ventures, with attention to knowledge management, government and cultural influence, and the role of ecommerce AACSB: Application of knowledge 51) Which of the following most likely provides a strategic advantage during the implementation of a global alliance?

A) non-collaboration in competitively sensitive areas B) unified technology infrastructure C) centralized decision making by one partner D) high levels of competition between the partners Answer: B Difficulty: 2: Moderate Chapter: 7 Skill: Concept LO: 7-3: To consider how to manage the firm's performance in international joint ventures, with attention to knowledge management, government and cultural influence, and the role of ecommerce AACSB: Application of knowledge

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52) Which of the following factors most significantly affects all other variables necessary for the successful implementation of a global alliance?

A) organizational policies B) organizational structure C) employee leadership D) product performance Answer: C Difficulty: 1: Easy Chapter: 7 Skill: Concept LO: 7-3: To consider how to manage the firm's performance in international joint ventures, with attention to knowledge management, government and cultural influence, and the role of ecommerce AACSB: Application of knowledge 53) Which of the following terms suggests that global sourcing can produce gains in efficiency, productivity, quality, and profitability by fully leveraging talent around the world?

A) transformational outsourcing B) business process reengineering C) inverted sourcing D) lean integration Answer: A Difficulty: 1: Easy Chapter: 7 Skill: Concept LO: 7-3: To consider how to manage the firm's performance in international joint ventures, with attention to knowledge management, government and cultural influence, and the role of ecommerce AACSB: Application of knowledge

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54) Barton & Green is an MNC based in the United States that provides a wide range of software development products. Executives at the firm are considering the idea of outsourcing the company's IT infrastructure. Which of the following best supports the argument that Barton & Green should outsource its IT infrastructure to TMC Enterprises, one of the best IT infrastructure maintenance firms in India?

A) The main competitor of Barton & Green outsources all IT functions.

B) Outsourcing will enhance Barton & Green's competitiveness.

C) Barton & Green's employees frequently need IT support, so it is best to outsource the IT infrastructure.

D) Barton & Green has proprietary technology and processes.

Answer: B Difficulty: 3: Challenging Chapter: 7 Skill: Critical Thinking LO: 7-3: To consider how to manage the firm's performance in international joint ventures, with attention to knowledge management, government and cultural influence, and the role of ecommerce AACSB: Reflective thinking 55) Barton & Green is an MNC based in the U.S. that makes a wide range of software development products. Executives at the firm are considering the idea of outsourcing the company's IT infrastructure. Which of the following questions is the most relevant to Barton & Green's decision to outsource its IT infrastructure to TMC Enterprises, a firm in India?

A) Which type of operating system is primarily used by TMC Enterprises?

B) What is the attitude of U.S. consumers about TMC Enterprises?

C) What is the financial health of TMC Enterprises?

D) Which other firms have outsourced their processes to TMC Enterprises?

Answer: C Difficulty: 3: Challenging Chapter: 7 Skill: Critical Thinking LO: 7-3: To consider how to manage the firm's performance in international joint ventures, with attention to knowledge management, government and cultural influence, and the role of ecommerce AACSB: Reflective thinking

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56) Opening its own subsidiaries in the host country may be better than contracting with an outside firm in the host country, if it is crucial for the firm to ________.

A) produce gains in efficiency, productivity, and quality B) keep control of proprietary technology and processes C) minimize job losses in the home country D) market its products in the host country Answer: B Difficulty: 2: Moderate Chapter: 7 Skill: Concept LO: 7-3: To consider how to manage the firm's performance in international joint ventures, with attention to knowledge management, government and cultural influence, and the role of ecommerce AACSB: Application of knowledge 57) The need for knowledge management in IJVs primarily stems from ________.

A) employee concerns regarding job security and benefits B) cultural and system differences between partners C) local government regulations and restrictions D) proprietary information legalities Answer: B Difficulty: 1: Easy Chapter: 7 Skill: Concept LO: 7-3: To consider how to manage the firm's performance in international joint ventures, with attention to knowledge management, government and cultural influence, and the role of ecommerce AACSB: Application of knowledge 58) Which of the following terms refers to the process by which the firm integrates and benefits from the experiences and skills learned by its employees?

A) knowledge management B) employee value proposition C) employee retention D) business process outsourcing Answer: A Difficulty: 1: Easy Chapter: 7 Skill: Concept LO: 7-3: To consider how to manage the firm's performance in international joint ventures, with attention to knowledge management, government and cultural influence, and the role of ecommerce AACSB: Application of knowledge

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59) ________ is the conscious and active management of creating, disseminating, evolving, and applying facts, information, or skills acquired through experience or education, to strategic ends.

A) Business continuity management B) Employee value proposition C) Knowledge management D) Employee retention Answer: C Difficulty: 1: Easy Chapter: 7 Skill: Concept LO: 7-3: To consider how to manage the firm's performance in international joint ventures, with attention to knowledge management, government and cultural influence, and the role of ecommerce AACSB: Application of knowledge 60) According to Berdrow and Lane, the process of transfer can be defined as ________.

A) managing the flow of existing knowledge between parents and from the parents to the IJV B) managing the transformation and creation of knowledge within the IJV through its independent activities C) managing the flow of transformed and newly created knowledge from the IJV back to the parents D) capturing and keeping knowledge confidential that exists among the local partners Answer: A Difficulty: 1: Easy Chapter: 7 Skill: Concept LO: 7-3: To consider how to manage the firm's performance in international joint ventures, with attention to knowledge management, government and cultural influence, and the role of ecommerce AACSB: Application of knowledge 61) According to Berdrow and Lane, the process of harvest can be defined as ________.

A) managing the flow of existing knowledge between parents and from the parents to the IJV B) managing the flow of transformed and newly created knowledge from the IJV back to the parents C) capturing knowledge of local partners and keeping it confidential D) managing the transformation and creation of knowledge within the IJV through its independent activities Answer: B Difficulty: 1: Easy Chapter: 7 Skill: Concept LO: 7-3: To consider how to manage the firm's performance in international joint ventures, with attention to knowledge management, government and cultural influence, and the role of ecommerce AACSB: Application of knowledge 21 .

62) According to Berdrow and Lane, the process of transformation can be defined as ________.

A) transforming the existing knowledge of parents and managing the flow of this transformed knowledge between parents B) managing the transformation and creation of knowledge within the IJV through its independent activities C) capturing and keeping knowledge that exists within the local partners confidential D) managing the flow of transformed and newly created knowledge from the IJV back to the parents Answer: B Difficulty: 1: Easy Chapter: 7 Skill: Concept LO: 7-3: To consider how to manage the firm's performance in international joint ventures, with attention to knowledge management, government and cultural influence, and the role of ecommerce AACSB: Application of knowledge 63) Which of the following is NOT a knowledge management process?

A) transferring existing knowledge B) transforming and creating of knowledge C) harvesting knowledge from the IJV to the parents D) distributing knowledge to clients and media outlets Answer: D Difficulty: 2: Moderate Chapter: 7 Skill: Concept LO: 7-3: To consider how to manage the firm's performance in international joint ventures, with attention to knowledge management, government and cultural influence, and the role of ecommerce AACSB: Application of knowledge 64) Which of the following represents government influence on IJVs? A) copyright protection B) partnership of firm C) organization structure D) negotiation practice Answer: A Difficulty: 2: Moderate Chapter: 7 Skill: Concept LO: 7-3: To consider how to manage the firm's performance in international joint ventures, with attention to knowledge management, government and cultural influence, and the role of ecommerce AACSB: Application of knowledge

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65) Which of the following is an area where the host government influences the strategic choices and implementations of foreign firms?

A) level of taxation B) equity share in joint venture C) knowledge management D) partnership of target firms Answer: A Difficulty: 2: Moderate Chapter: 7 Skill: Concept LO: 7-3: To consider how to manage the firm's performance in international joint ventures, with attention to knowledge management, government and cultural influence, and the role of ecommerce AACSB: Application of knowledge 66) Which of the following variables is frequently overlooked when deciding on entry strategies and alliances, particularly when the target country is perceived to be similar to the home country?

A) political stability B) culture C) currency stability D) competition Answer: B Difficulty: 2: Moderate Chapter: 7 Skill: Concept LO: 7-3: To consider how to manage the firm's performance in international joint ventures, with attention to knowledge management, government and cultural influence, and the role of ecommerce AACSB: Application of knowledge 67) Overlooking cultural differences in cross-border alliances can create a negative impact when ________.

A) target country has similar views on organizational formality B) target country and host country equally participate in decision making C) target country is technologically superior to the host country D) target country has conflicting practices and systems Answer: D Difficulty: 2: Moderate Chapter: 7 Skill: Concept LO: 7-3: To consider how to manage the firm's performance in international joint ventures, with attention to knowledge management, government and cultural influence, and the role of ecommerce AACSB: Application of knowledge

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68) In a cross-border alliance, cultural differences can be overlooked when ________.

A) the target country is similar to the home country B) when there is a considerable difference in practices of the target country C) the target country has a high number of domestic mergers D) the target country insists on participating in the decision-making processes Answer: A Difficulty: 2: Moderate Chapter: 7 Skill: Concept LO: 7-3: To consider how to manage the firm's performance in international joint ventures, with attention to knowledge management, government and cultural influence, and the role of ecommerce AACSB: Application of knowledge 69) Which of the following is a cultural difference that can significantly affect cross-border alliances?

A) use of e-commerce enablers B) emergence of market firms in the host country C) organizational formality D) protectionist legislation Answer: C Difficulty: 2: Moderate Chapter: 7 Skill: Concept LO: 7-3: To consider how to manage the firm's performance in international joint ventures, with attention to knowledge management, government and cultural influence, and the role of ecommerce AACSB: Application of knowledge 70) Which of the following terms refers to a bond between specially connected firms that generates preferential treatment to members of the network?

A) kanban B) kaizen C) guanxihu D) guanxi Answer: C Difficulty: 1: Easy Chapter: 7 Skill: Concept LO: 7-3: To consider how to manage the firm's performance in international joint ventures, with attention to knowledge management, government and cultural influence, and the role of ecommerce AACSB: Application of knowledge

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71) Which of the following terms refers to company specialists who provide other companies with services such as Web site translation?

A) e-commerce enablers B) virtual global teams C) e-businesses D) born globals Answer: A Difficulty: 1: Easy Chapter: 7 Skill: Concept LO: 7-3: To consider how to manage the firm's performance in international joint ventures, with attention to knowledge management, government and cultural influence, and the role of ecommerce AACSB: Information technology 72) Which of the following best describes the role of e-commerce enablers?

A) They facilitate multinational companies to collaborate with medium-sized organizations.

B) They allow innovative transnational companies to gain entry into foreign markets.

C) They help small- and medium-sized companies to go global without the internal capabilities to carry out global activities.

D) They reduce the risks involved in joint venture and other forms of alliances.

Answer: C Difficulty: 1: Easy Chapter: 7 Skill: Concept LO: 7-3: To consider how to manage the firm's performance in international joint ventures, with attention to knowledge management, government and cultural influence, and the role of ecommerce AACSB: Information technology 73) Which of the following is a typical task performed by e-commerce enablers?

A) evaluating skill sets of personnel B) conducting performance appraisals C) establishing criteria for partnership D) screening orders Answer: D Difficulty: 2: Moderate Chapter: 7 Skill: Concept LO: 7-3: To consider how to manage the firm's performance in international joint ventures, with attention to knowledge management, government and cultural influence, and the role of ecommerce AACSB: Information technology

25 .

74) NextLinx Corporation provides a wide range of strategic implementation services for smalland medium-sized organizations. It allows all trading partners to collaborate in a single online location, using the same information and processes. Therefore, NextLinx is an example of a(n) ________.

A) e-commerce enabler B) knowledge management firm C) IJV controller D) outsourcing company Answer: A Difficulty: 1: Easy Chapter: 7 Skill: Concept LO: 7-3: To consider how to manage the firm's performance in international joint ventures, with attention to knowledge management, government and cultural influence, and the role of ecommerce AACSB: Information technology 75) Cross-border alliances necessitate acquiring a local partner to counteract political risk factors and to take advantage of local knowledge and contacts.

Answer: TRUE Difficulty: 1: Easy Chapter: 7 Skill: Concept LO: 7-1: To become familiar with the types of strategic alliances for international business, the challenges in implementing them, and guidelines for success in alliances AACSB: Application of knowledge 76) A major advantage of global and cross-border alliances is that they share the cost and risk of research and development of new products.

Answer: TRUE Difficulty: 2: Moderate Chapter: 7 Skill: Concept LO: 7-1: To become familiar with the types of strategic alliances for international business, the challenges in implementing them, and guidelines for success in alliances AACSB: Application of knowledge 77) Cross-border alliances seldom necessitate acquiring a local partner to counteract political risk factors and to take advantage of local knowledge and contacts.

Answer: FALSE Difficulty: 1: Easy Chapter: 7 Skill: Concept LO: 7-1: To become familiar with the types of strategic alliances for international business, the challenges in implementing them, and guidelines for success in alliances AACSB: Application of knowledge 26 .

78) Alliances can be formed for various purposes, e.g., sharing technology, marketing, or production joint ventures.

Answer: TRUE Difficulty: 1: Easy Chapter: 7 Skill: Concept LO: 7-1: To become familiar with the types of strategic alliances for international business, the challenges in implementing them, and guidelines for success in alliances AACSB: Application of knowledge 79) An alliance is a transition mechanism that propels the partner's strategies forward in a turbulent environment faster than would be possible for each company alone.

Answer: TRUE Difficulty: 2: Moderate Chapter: 7 Skill: Concept LO: 7-1: To become familiar with the types of strategic alliances for international business, the challenges in implementing them, and guidelines for success in alliances AACSB: Application of knowledge 80) A joint venture is a new independent entity jointly created and owned by two or more parent companies.

Answer: TRUE Difficulty: 1: Easy Chapter: 7 Skill: Concept LO: 7-1: To become familiar with the types of strategic alliances for international business, the challenges in implementing them, and guidelines for success in alliances AACSB: Application of knowledge 81) The JV agreement for a firm requires that each firm maintain a 50 percent equity in the operation.

Answer: TRUE Difficulty: 1: Easy Chapter: 7 Skill: Concept LO: 7-1: To become familiar with the types of strategic alliances for international business, the challenges in implementing them, and guidelines for success in alliances AACSB: Application of knowledge

27 .

82) An international joint venture (IJV)is a joint venture among two or more companies in same country.

Answer: FALSE Difficulty: 1: Easy Chapter: 7 Skill: Concept LO: 7-1: To become familiar with the types of strategic alliances for international business, the challenges in implementing them, and guidelines for success in alliances AACSB: Application of knowledge 83) The JV agreement for a firm may comprise a majority JV (in which the firm has more than 50 percent equity), a minority JV (less than 50 percent equity), or a 60-40 JV (when two firms have equal equity).

Answer: FALSE Difficulty: 1: Easy Chapter: 7 Skill: Concept LO: 7-1: To become familiar with the types of strategic alliances for international business, the challenges in implementing them, and guidelines for success in alliances AACSB: Application of knowledge 84) Strategic alliances are partnerships between two or more firms that decide they can better pursue their mutual goals by combining their resources.

Answer: TRUE Difficulty: 1: Easy Chapter: 7 Skill: Concept LO: 7-1: To become familiar with the types of strategic alliances for international business, the challenges in implementing them, and guidelines for success in alliances AACSB: Application of knowledge 85) Wholly owned operations abroad inhibit a company's ability to pursue a global strategy.

Answer: FALSE Difficulty: 2: Moderate Chapter: 7 Skill: Concept LO: 7-1: To become familiar with the types of strategic alliances for international business, the challenges in implementing them, and guidelines for success in alliances AACSB: Application of knowledge

28 .

86) A firm shares the profits, costs, and risks with a local partner (or a global partner) and benefits from the local partner's local contacts and markets in an International Joint Venture.

Answer: TRUE Difficulty: 1: Easy Chapter: 7 Skill: Concept LO: 7-1: To become familiar with the types of strategic alliances for international business, the challenges in implementing them, and guidelines for success in alliances AACSB: Application of knowledge 87) Most global manufacturers have equity alliances with suppliers, sub-assemblers, and distributors.

Answer: TRUE Difficulty: 1: Easy Chapter: 7 Skill: Concept LO: 7-1: To become familiar with the types of strategic alliances for international business, the challenges in implementing them, and guidelines for success in alliances AACSB: Application of knowledge 88) Two or more partners have identical ownership shares (equity percentages) in the new venture in an equity strategic alliance.

Answer: FALSE Difficulty: 2: Moderate Chapter: 7 Skill: Concept LO: 7-1: To become familiar with the types of strategic alliances for international business, the challenges in implementing them, and guidelines for success in alliances AACSB: Application of knowledge 89) Working partnerships between two or more companies across national boundaries and increasingly across industries are referred to as global strategic alliances.

Answer: TRUE Difficulty: 1: Easy Chapter: 7 Skill: Concept LO: 7-1: To become familiar with the types of strategic alliances for international business, the challenges in implementing them, and guidelines for success in alliances AACSB: Application of knowledge

29 .

90) In a highly competitive environment, alliances are a slow and risky route to globalization, and therefore, are likely to be avoided.

Answer: FALSE Difficulty: 2: Moderate Chapter: 7 Skill: Concept LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies AACSB: Application of knowledge 91) Cross-border allies usually collaborate effectively, and are most often associated with long lasting trust and loyalty.

Answer: FALSE Difficulty: 2: Moderate Chapter: 7 Skill: Concept LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies AACSB: Application of knowledge 92) When Russian firms form an alliance with a foreign firm, they expect assistance with market entry through forming the alliance and that they need assistance in solving bribes, kickbacks, and other under-the-table transactions.

Answer: TRUE Difficulty: 1: Easy Chapter: 7 Skill: Concept LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies AACSB: Application of knowledge 93) The initial challenge in implementing strategies in emerging markets is likely to be the navigation of poor infrastructures, supply chains, and distribution networks.

Answer: TRUE Difficulty: 1: Easy Chapter: 7 Skill: Concept LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies AACSB: Application of knowledge

30 .

94) A major benefit of cross-border alliances is that they facilitate the access to specific markets where regulations favor domestic companies.

Answer: TRUE Difficulty: 1: Easy Chapter: 7 Skill: Concept LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies AACSB: Application of knowledge 95) Cross-border alliances are used to gain rapid entry into a new or consolidating industry and to take advantage of synergies.

Answer: TRUE Difficulty: 2: Moderate Chapter: 7 Skill: Concept LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies AACSB: Application of knowledge 96) One major advantage of cross-border alliances is that there is a potential loss of a company's technology and knowledge.

Answer: FALSE Difficulty: 2: Moderate Chapter: 7 Skill: Concept LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies AACSB: Application of knowledge 97) The least important single factor determining International Joint Venture success or failure is the choice of a partner.

Answer: FALSE Difficulty: 2: Moderate Chapter: 7 Skill: Concept LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies AACSB: Application of knowledge

31 .

98) The term "International Joint Venture" (IJV) control refers to the processes that management puts in place so as to direct the success of the firm's goals.

Answer: TRUE Difficulty: 1: Easy Chapter: 7 Skill: Concept LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies AACSB: Application of knowledge 99) The profitability of firms that set up operations abroad is greatly influenced, for example, by the level of taxation in the host country, but not by any restrictions on profit repatriation.

Answer: FALSE Difficulty: 1: Easy Chapter: 7 Skill: Concept LO: 7-3: To consider how to manage the firm's performance in international joint ventures, with attention to knowledge management, government and cultural influence, and the role of ecommerce AACSB: Application of knowledge 100) Risk-taking firms are likely to pursue aggressive strategies and deal well with change, whereas risk-averse companies are likely to tread more carefully and employ incremental strategies.

Answer: TRUE Difficulty: 1: Easy Chapter: 7 Skill: Concept LO: 7-3: To consider how to manage the firm's performance in international joint ventures, with attention to knowledge management, government and cultural influence, and the role of ecommerce AACSB: Application of knowledge 101) Americans see themselves as the world's leading country, and it's not easy for them to accept having a European in charge.

Answer: TRUE Difficulty: 1: Easy Chapter: 7 Skill: Concept LO: 7-3: To consider how to manage the firm's performance in international joint ventures, with attention to knowledge management, government and cultural influence, and the role of ecommerce AACSB: Application of knowledge

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102) The horizon of Americans often goes only as far as the U.S. border. As a result, Americans always give equal importance to a foreign customer. If a foreign customer has a special need, the response is sometimes: It works here, why do they need it to be different?

Answer: FALSE Difficulty: 1: Easy Chapter: 7 Skill: Concept LO: 7-3: To consider how to manage the firm's performance in international joint ventures, with attention to knowledge management, government and cultural influence, and the role of ecommerce AACSB: Application of knowledge 103) E-commerce enablers help small and medium-sized companies to go global without the internal capabilities to carry out global e-commerce functions.

Answer: TRUE Difficulty: 1: Easy Chapter: 7 Skill: Concept LO: 7-3: To consider how to manage the firm's performance in international joint ventures, with attention to knowledge management, government and cultural influence, and the role of ecommerce AACSB: Information technology 104) Guanxihu refers to a bond between specially connected firms that generates preferential treatment for members of the network.

Answer: TRUE Difficulty: 1: Easy Chapter: 7 Skill: Concept LO: 7-3: To consider how to manage the firm's performance in international joint ventures, with attention to knowledge management, government and cultural influence, and the role of ecommerce AACSB: Application of knowledge 105) MNCs often partner with local small enterprises to capture new ideas and innovations.

Answer: TRUE Difficulty: 2: Moderate Chapter: 7 Skill: Concept LO: 7-3: To consider how to manage the firm's performance in international joint ventures, with attention to knowledge management, government and cultural influence, and the role of ecommerce AACSB: Application of knowledge

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106) Transformational outsourcing refers to the view that global sourcing can produce gains in efficiency and profitability by fully leveraging talent around the world.

Answer: TRUE Difficulty: 2: Moderate Chapter: 7 Skill: Concept LO: 7-3: To consider how to manage the firm's performance in international joint ventures, with attention to knowledge management, government and cultural influence, and the role of ecommerce AACSB: Application of knowledge 107) Discuss the reasons that companies embark on cross-border strategic alliances. What other motivations may prompt such alliances?

Answer: There are five motives for cross border alliances: 1) to avoid import barriers, licensing requirements, and other protectionist legislation; 2) to share the costs and risks of the research and development of new products and processes; 3) to gain access to specific markets; 4) to reduce political risk while making inroads into a new market; and 5) to gain rapid entry into a new or consolidating industry, and to take advantage of synergies.

Difficulty: 2: Moderate Chapter: 7 Skill: Concept LO: 7-1: To become familiar with the types of strategic alliances for international business, the challenges in implementing them, and guidelines for success in alliances AACSB: Application of knowledge 108) What are the primary motivation and benefits behind global and cross-border alliances?

Answer: (1) To avoid import barriers, licensing requirements, and other protectionist legislation. (2) To share the costs and risks of the research and development of new products and processes, and (3) To gain access to specific markets, such as China and Russia, where regulations favor domestic companies.

Difficulty: 2: Moderate Chapter: 7 Skill: Concept LO: 7-1: To become familiar with the types of strategic alliances for international business, the challenges in implementing them, and guidelines for success in alliances AACSB: Application of knowledge

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109) Why should a company seek a global alliance over other forms of market entry?

Answer: Alliances have advantages over other entry forms, such as exporting. For example, an alliance will give faster market access than exporting and will avoid entry barriers such as tariffs.

In addition, while an exporting strategy requires the firm to find customers, the alliance partner may already have a customer base. Further, an alliance is a means of spreading risk over a larger, more diversified enterprise than a single domestic firm. In large technological firms, an alliance is often a way to share costs and share technology.

Difficulty: 3: Challenging Chapter: 7 Skill: Concept LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies AACSB: Application of knowledge 110) What are some of the strategies available for small businesses (SME) venturing abroad for the first time?

Answer: The first step is often that of exporting. This can be a daunting task; however, many government sources are available to help small-business managers embark on exporting, For SME firms wishing to expand beyond their domestic markets and exporting, they typically need to find a market niche in the chosen countries between the MNCs and the local firms where they know they can compete. While they do not have the economies of scale and financial and marketing resources of the MNCs; they also do not have the local connections, suppliers, and consumer knowledge of the small local companies. If those SMEs can find an opportunity, or niche, that the MNCs find too minor to bother with, and also that are not being targeted by local firms, they may be able to gain a foothold and establish their own reputation as leaders.

Difficulty: 2: Moderate Chapter: 7 Skill: Concept LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies AACSB: Application of knowledge 111) What motivates a company to develop a cross-border alliance?

Answer: The commonly noted motivations for developing a cross-border alliance include: to avoid import barriers, licensing requirements, and other protectionist legislation; to share the costs and risks of the research and development of new products and processes; to gain access to specific markets where regulations favor domestic companies; to reduce political risk while making inroads into a new market; to gain rapid entry into a new or consolidating industry; and to take advantage of synergies.

Difficulty: 2: Moderate Chapter: 7 Skill: Concept LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies AACSB: Application of knowledge

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112) What are some of the challenges in implementing global alliances?

Answer: Problems relate to shared ownership, differences in national cultures, the integration of widely different structures and systems, the distribution of power between the companies involved, and the conflicts in their relative locus of decision making and control.

Difficulty: 2: Moderate Chapter: 7 Skill: Concept LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies AACSB: Application of knowledge 113) What is the "dual nature" of strategic alliances?

Answer: Alliances serve both a cooperative and a competitive role. Ventures start on the surface as cooperative agreements. There is a dynamic tension under the surface, as venture partners have the potential to become new competitors—competitors with significant knowledge of their partner's operations and strategy.

Difficulty: 3: Challenging Chapter: 7 Skill: Application LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies AACSB: Application of knowledge 114) How can firms increase the likelihood of forming a successful global alliance?

Answer: (1) Choose a partner with compatible strategic goals and objectives and with whom the alliance will result in synergies through the combined markets, technologies, and management cadre; (2) seek alliances where complementary skills, products, and markets will result; (3) work out with the partner how proprietary technology or competitively sensitive information will be handled; and (4) recognize that most alliances last only a few years and will probably break up once a partner feels that it has incorporated the skills and information it needs to go it alone.

Difficulty: 2: Moderate Chapter: 7 Skill: Concept LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies AACSB: Application of knowledge

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115) What is international joint venture control? Why is it important?

Answer: International joint venture control refers to the processes that management puts in place so as to direct the success of the firm's goals. Most of a firm's objectives can be achieved by careful attention to control features at the outset of the joint venture, such as the choice of a partner, the establishment of a strategic fit, and the design of the IJV organization. IJV control is an important issue because at least one parent is headquartered outside the venture's country of operations thus requiring unique measures of control. Lack of attention to specific control requisites of IJVs can limit the parent company's ability to utilize its resources efficiently, coordinate its activities, and implement its strategy.

Difficulty: 2: Moderate Chapter: 7 Skill: Concept LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies AACSB: Application of knowledge 116) Why is an international joint venture referred to as a marriage between venture partners?

Answer: International Joint Ventures are like a marriage because the more issues that can be settled and agreed upon before the merger, the less likely it will be to break up. This agreement should specify the rights and responsibilities of each partner. There is also the issue of compatibility. Incompatible ventures dissolve as do incompatible marriages. To become and remain compatible, venture partners need to appreciate the cultural heritage of their partner.

Difficulty: 3: Challenging Chapter: 7 Skill: Application LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies AACSB: Application of knowledge

37 .

117) What are some of the complexities of managing and implementing a global alliance? How can e-commerce enablers assist the process?

Answer: IJVs and other global alliances require unique controls for proper management.

Ignoring these specific control requisites can limit the parent company's ability to use its resources efficiently, coordinate its activities, and implement its strategy. With subsidiaries, suppliers, distributors, manufacturing facilities, carriers, brokers, and customers all over the globe, global trade is complicated and fragmented. Global trade is extremely complicated.

Deciding on a global strategy is one thing, but implementing it through all the necessary parties and intermediaries around the world presents a whole new level of complexity. Because of that complexity, many firms decide to implement their global e-commerce strategy by outsourcing the necessary tasks to e-commerce enablers, companies that specialize in providing the technology to organize transactions and follow through with the regulatory requirements. These specialists can help companies sort through the maze of different taxes, duties, language translations, and so on–specific to each country. Such services allow small and medium-sized companies to go global without the internal capabilities to carry out global e-commerce functions. These kinds of Web-based services allow a company to manage an entire global trade operation, including automation of imports and exports by screening orders and generating the appropriate documentation, paying customs charges, and complying with trade agreements.

Difficulty: 3: Challenging Chapter: 7 Skill: Synthesis LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies AACSB: Application of knowledge 118) Describe the process of knowledge management in international joint ventures.

Answer: Knowledge management is the conscious and active management of creating, disseminating, evolving, and applying knowledge to strategic ends. The process consists of several components: 1. Transfer: managing the flow of existing knowledge between parents and from parents to IJV. 2. Transformation: managing the creation of knowledge and transformation within the IJV. 3. Harvest: managing the flow of the transformed and newly created knowledge back to parent.

Difficulty: 2: Moderate Chapter: 7 Skill: Concept LO: 7-3: To consider how to manage the firm's performance in international joint ventures, with attention to knowledge management, government and cultural influence, and the role of ecommerce AACSB: Application of knowledge

38 .

119) Assume that your company plans to establish a joint venture in Argentina. What factors need to be considered — prior to forming the IJV — so that it performs well?

Answer: The most important factor in determining IJV success or failure is partner selection.

The partners need to have strategic goals that are compatible. The parent firms need to ensure that there is a general fit between the international strategies of the parents, the IJV strategy, and the specific performance goals that the parents adopt. The partners need to specify the taskrelated skills and resources needed from each other as well as the relative priority of those needs. To do this, a manager must analyze their own firms and pinpoint any areas of weakness in task-related skills and resources that can be overcome with the help of the IJV partner.

Rushing the partner selection process may lead to choosing a sub-optimal partner that, in turn, will adversely affect the performance of the IJV. The student may also mention that another critical factor is IJV control, which describes the processes that management put in place to direct the success of the firm's goals.

Difficulty: 2: Moderate Chapter: 7 Skill: Application LO: 7-3: To consider how to manage the firm's performance in international joint ventures, with attention to knowledge management, government and cultural influence, and the role of ecommerce AACSB: Application of knowledge 120) What are e-commerce enablers, and what is their role?

Answer: Deciding on a global strategy is one thing; implementing it through all the necessary parties and intermediaries around the world presents a whole new level of complexity. Because of that complexity, many firms decide to implement their global e-commerce strategy by outsourcing the necessary tasks to e-commerce enablers, companies that specialize in providing the technology to organize transactions and follow through with the regulatory requirements.

These specialists can help companies sort through the maze of different taxes, duties, language translations, and so on specific to each country. Such services allow small and medium-sized companies to go global without the internal capabilities to carry out global e-commerce functions These kinds of web-based services allow a company to manage an entire global trade operation, including automation of imports and exports by screening orders and generating the appropriate documentation, paying customs charges, complying with trade agreements, and so on.

Difficulty: 2: Moderate Chapter: 7 Skill: Application LO: 7-3: To consider how to manage the firm's performance in international joint ventures, with attention to knowledge management, government and cultural influence, and the role of ecommerce AACSB: Application of knowledge

39 .

121) What are the benefits of outsourcing abroad? What should firms do when implementing a global sourcing strategy?

Answer: Outsourcing abroad can produce gains in efficiency, productivity, quality, and profitability by fully leveraging talent around the world. A firm should do the following: 1. Examine its reasons for outsourcing 2. Evaluate the best outsourcing model 3. Gain the cooperation of its management and staff 4. Consult its alliance partners 5. Invest in the alliance Difficulty: 2: Moderate Chapter: 7 Skill: Concept LO: 7-3: To consider how to manage the firm's performance in international joint ventures, with attention to knowledge management, government and cultural influence, and the role of ecommerce AACSB: Application of knowledge

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International Management, 10e, (Deresky/Miller) Chapter 8 Organization Structure and Control Systems 1) Organization ________ refers to the formal arrangement of roles, responsibilities, and relationships within an organization.

A) structure B) systems C) culture D) strategy Answer: A Difficulty: 2: Moderate Chapter: 8 Skill: Concept LO: 8-1: To understand the importance of appropriate organizational structures to effective strategy implementation AACSB: Application of knowledge 2) ________ is the process by which a firm gradually changes in response to global competition; domestic market saturation; and the desire for expansion, new markets, and diversification.

A) Segmentation B) Integration C) Segregation D) Internationalization Answer: D Difficulty: 1: Easy Chapter: 8 Skill: Concept LO: 8-2: To understand the structural changes necessary as the firm develops and changes strategies over time AACSB: Application of knowledge 3) The design of an organization, as with any other management function, should be contingency based, taking into account the variables of that particular system at that specific point in time.

The major variable not included is the ________.

A) firm's strategy B) firm's size C) firm's location D) firm's technology Answer: C Difficulty: 1: Easy Chapter: 8 Skill: Concept LO: 8-2: To understand the structural changes necessary as the firm develops and changes strategies over time AACSB: Application of knowledge

1 .

4) Additional factors structural choice relating to geographical dispersion include all EXCEPT ________.

A) differences in time B) differences in language C) differences in technology D) differences in business practices Answer: C Difficulty: 1: Easy Chapter: 8 Skill: Concept LO: 8-2: To understand the structural changes necessary as the firm develops and changes strategies over time AACSB: Application of knowledge 5) Strategy is ________.

A) a quality of executive management that provides inspirational guidance and motivation to personnel, leading the firm to a better future B) the pattern of shared values, behavioral norms, systems, policies, and procedures that employees learn and adopt C) a planned set of actions that managers employ to make the best use of the firm's resources and core competencies to gain competitive advantage and accomplish organizational objectives D) the procurement of selected value-chain activities, including production of intermediate goods or finished products, from independent suppliers Answer: C Difficulty: 1: Easy Chapter: 8 Skill: Concept LO: 8-2: To understand the structural changes necessary as the firm develops and changes strategies over time AACSB: Application of knowledge 6) When developing strategies, managers start by ________.

A) configuring and coordinating the firm's activities around the world B) deciding which customers to target C) analyzing the particular opportunities and challenges that confront the firm D) examining the firm's specific strengths and weaknesses Answer: D Difficulty: 2: Moderate Chapter: 8 Skill: Concept LO: 8-2: To understand the structural changes necessary as the firm develops and changes strategies over time AACSB: Application of knowledge

2 .

7) Which of the following is true with regard to the structural evolution model?

A) Typically, firms that start their internationalization at a higher level of involvement use this model.

B) Firms using this model do not export.

C) This model has become known as the stages model.

D) All firms follow this model without exception.

Answer: C Difficulty: 2: Moderate Chapter: 8 Skill: Concept LO: 8-2: To understand the structural changes necessary as the firm develops and changes strategies over time AACSB: Application of knowledge 8) Which of the following does NOT represent a typical way in which firms organize their international activities?

A) domestic structure plus export department B) creating an international division organized along functional, product or geographic lines C) domestic structure plus foreign subsidiary D) regional structure Answer: D Difficulty: 2: Moderate Chapter: 8 Skill: Concept LO: 8-2: To understand the structural changes necessary as the firm develops and changes strategies over time AACSB: Application of knowledge 9) Smaller firms are most likely to reorganize into ________ during their internationalization.

A) domestic structure plus export department B) domestic structure plus foreign subsidiary C) global product structure D) global functional structure Answer: A Difficulty: 1: Easy Chapter: 8 Skill: Concept LO: 8-2: To understand the structural changes necessary as the firm develops and changes strategies over time AACSB: Application of knowledge

3 .

10) Sedona Inc. is an American firm that manufactures high-quality handbags, duffel bags, and leather belts at its facility in Arizona. Sedona's products have been featured in various fashion magazines and as a result, consumer demand has increased significantly. Currently, Sedona is organized as a domestic structure plus export department. Executives at Sedona believe the firm is ready to internationalize its operations, and they are considering various organizational structures. Which of the following best supports the argument that Sedona should give its subsidiary managers significant autonomy?

A) Praxis Inc., one of Sedona's domestic competitors, has a flat organizational structure.

B) Sedona is a family-owned business that began as a subsidiary to Aloha enterprises.

C) Sedona has recently reorganized into a domestic structure plus foreign subsidiary.

D) Sedona conducts a large percentage of domestic sales through the company's web site.

Answer: C Difficulty: 1: Easy Chapter: 8 Skill: Application LO: 8-2: To understand the structural changes necessary as the firm develops and changes strategies over time AACSB: Analytical thinking; Application of knowledge 11) A ________ structure is the ideal way to organize work when global integration is more important than local responsiveness and the industry structure encourages cost leadership.

A) decentralized B) matrix C) divisional D) global functional Answer: B Difficulty: 1: Easy Chapter: 8 Skill: Concept LO: 8-2: To understand the structural changes necessary as the firm develops and changes strategies over time AACSB: Application of knowledge 12) To be effective, firms reorganizing into a domestic structure plus foreign subsidiary in one or more countries should ________.

A) categorically ignore niche markets B) stop investing in domestic businesses C) refrain from exporting D) allow a great deal of autonomy to subsidiary managers Answer: D Difficulty: 1: Easy Chapter: 8 Skill: Concept LO: 8-2: To understand the structural changes necessary as the firm develops and changes strategies over time AACSB: Application of knowledge 4 .

13) A(n) ________ permits managers to allocate and coordinate resources for foreign activities under one roof, and thus enhances the firm's ability to respond, both reactively and proactively, to market opportunities.

A) local division B) international division C) export department D) domestic structure plus foreign subsidiary Answer: B Difficulty: 1: Easy Chapter: 8 Skill: Concept LO: 8-2: To understand the structural changes necessary as the firm develops and changes strategies over time AACSB: Application of knowledge 14) A firm that uses an international division structure sometimes experiences intraorganizational conflict because ________.

A) such a structure disallows managers to coordinate resources for foreign activities under one roof B) the international division invariably fails to respond to cultural differences C) more resources and management attention tend to get channeled toward the international division than toward the domestic divisions D) such a structure depresses the firm's ability to respond to market opportunities Answer: C Difficulty: 2: Moderate Chapter: 8 Skill: Concept LO: 8-2: To understand the structural changes necessary as the firm develops and changes strategies over time AACSB: Application of knowledge

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15) Acme United. is an American firm that manufactures disposable medical supplies at its facility in California. Acme United's products have been featured in various medical journals and as a result, demand in hospitals has increased significantly. Currently, Acme United is organized as a domestic structure plus export department. Executives at Acme United believe the firm is ready to internationalize its operations, and they are considering various organizational structures. Which of the following best supports the argument that Acme United should reorganize into a global functional structure?

A) Acme United has a highly decentralized system of management.

B) Acme United uses a variety of technologies for its numerous and varied product lines.

C) Acme United has only a few domestic competitors.

D) Acme United serves a narrow spectrum of customers and has a product line that uses similar technology.

Answer: D Difficulty: 2: Moderate Chapter: 8 Skill: Application LO: 8-2: To understand the structural changes necessary as the firm develops and changes strategies over time AACSB: Analytical thinking; Application of knowledge 16) In which of the following is a firm's foreign operations integrated into the activities and responsibilities of each department to gain operative specialization and economies of scale?

A) global matrix structure B) global functional structure C) global geographic structure D) global divisional structure Answer: B Difficulty: 1: Easy Chapter: 8 Skill: Concept LO: 8-2: To understand the structural changes necessary as the firm develops and changes strategies over time AACSB: Application of knowledge

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17) Sigma Inc. is designed on the basis of the company's business activities such as production, finance, and marketing. Foreign operations at Sigma are integrated into the activities and responsibilities of each division to achieve economies of scale and operative specialization. In other words, Sigma has a(n) ________.

A) domestic structure with foreign subsidiary B) domestic structure with export department C) global functional structure D) international division structure Answer: C Difficulty: 2: Moderate Chapter: 8 Skill: Application LO: 8-2: To understand the structural changes necessary as the firm develops and changes strategies over time AACSB: Analytical thinking; Application of knowledge 18) Which of the following organizational structures is particularly appropriate for product lines using similar technology and for businesses with a narrow spectrum of customers?

A) global functional structure B) international division C) global product structure D) matrix structure Answer: A Difficulty: 1: Easy Chapter: 8 Skill: Concept LO: 8-2: To understand the structural changes necessary as the firm develops and changes strategies over time AACSB: Application of knowledge 19) Which of the following is true with regard to a global product structure?

A) A global product structure is disadvantageous for firms with diversified product lines that are aimed at dissimilar or dispersed markets.

B) The advantages of this organizational form are market concentration, innovation, and responsiveness to new opportunities in a particular environment.

C) In a global product structure, a cluster of products are grouped into a single division.

D) A global product structure does not facilitate diversification and inhibits growth.

Answer: B Difficulty: 1: Easy Chapter: 8 Skill: Concept LO: 8-2: To understand the structural changes necessary as the firm develops and changes strategies over time AACSB: Application of knowledge

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20) Which of the following refers to a self-contained business within a company with its own functional departments and accounting systems?

A) buying center B) supply chain C) value chain D) strategic business unit Answer: D Difficulty: 1: Easy Chapter: 8 Skill: Concept LO: 8-2: To understand the structural changes necessary as the firm develops and changes strategies over time AACSB: Application of knowledge 21) Which of the following forms of organization is particularly appropriate in a dynamic and diverse environment?

A) the global functional structure B) the global product structure C) the domestic structure plus export department D) the domestic structure plus foreign subsidiary Answer: B Difficulty: 3: Challenging Chapter: 8 Skill: Concept LO: 8-2: To understand the structural changes necessary as the firm develops and changes strategies over time AACSB: Application of knowledge 22) With the geographic structure, the focus is on ________, since products can be adapted to local requirements.

A) marketing B) innovation C) divesting D) importing Answer: A Difficulty: 1: Easy Chapter: 8 Skill: Concept LO: 8-2: To understand the structural changes necessary as the firm develops and changes strategies over time AACSB: Application of knowledge

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23) The ________ takes responsibility for overseeing international operations, marketing products, processing orders, working with foreign distributors, and arranging financing when necessary.

A) corollary approach B) export department C) international division D) global product design Answer: B Difficulty: 1: Easy Chapter: 8 Skill: Concept LO: 8-2: To understand the structural changes necessary as the firm develops and changes strategies over time AACSB: Application of knowledge 24) A firm would most likely establish an international division when ________.

A) domestic market sales fluctuate B) decision making becomes decentralized C) foreign and domestic customers are similar D) specialization in foreign market operations becomes essential Answer: D Difficulty: 2: Moderate Chapter: 8 Skill: Concept LO: 8-2: To understand the structural changes necessary as the firm develops and changes strategies over time AACSB: Application of knowledge 25) Which of the following is true with regard to the global geographic structure?

A) With the geographic structure, the focus is on importing.

B) Marketing-oriented companies are most likely to opt for this structure.

C) The geographic structure is not an adequate structure for consolidating regional expertise.

D) In a geographic structure, problems of coordination across different regions are virtually nonexistent.

Answer: B Difficulty: 3: Challenging Chapter: 8 Skill: Concept LO: 8-2: To understand the structural changes necessary as the firm develops and changes strategies over time AACSB: Reflective thinking; Application of knowledge

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26) Marketing-oriented companies, such as Nestlé and Unilever, which produce a range of products that can be marketed through similar channels of distribution to similar customers, will usually opt for the ________.

A) domestic structure plus foreign subsidiary B) global geographic structure C) matrix structure D) domestic structure plus export department Answer: B Difficulty: 1: Easy Chapter: 8 Skill: Concept LO: 8-2: To understand the structural changes necessary as the firm develops and changes strategies over time AACSB: Application of knowledge 27) Which of the following best characterizes the concept of global integration?

A) Effective global competition requires that products be specialized based on the market.

B) Making adjustments for unique markets is an essential element of international business.

C) the ability to manage across national boundaries, retaining local flexibility while achieving global integration.

D) The differences in market-to-market distribution channels must be accommodated.

Answer: C Difficulty: 2: Moderate Chapter: 8 Skill: Concept LO: 8-2: To understand the structural changes necessary as the firm develops and changes strategies over time AACSB: Application of knowledge 28) The focus of Selina Inc., an MNC producing a range of products that can be marketed through common channels to similar customers worldwide, is marketing. Its aim is to become an insider in every country it operates. Which of the following organizational forms is most likely to be favored by Selina's management?

A) a global geographic structure B) a global functional structure C) a domestic structure plus export department D) a domestic structure plus foreign subsidiary Answer: A Difficulty: 2: Moderate Chapter: 8 Skill: Application LO: 8-2: To understand the structural changes necessary as the firm develops and changes strategies over time AACSB: Application of knowledge

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29) A ________ is developed to combine geographic support for both global integration and local responsiveness, and it can be used to take advantage of personnel skills and experience shared across both functional and divisional structures.

A) functional structure B) divisional structure C) product structure D) matrix structure Answer: D Difficulty: 1: Easy Chapter: 8 Skill: Concept LO: 8-2: To understand the structural changes necessary as the firm develops and changes strategies over time AACSB: Application of knowledge 30) The fundamental limitation of a matrix structure is that it ________.

A) creates a poor organizational culture B) isolates upper management from operational levels C) institutes a dual hierarchy that violates the unity-of-command principle D) introduces more errors in the decision-making process due to the speed of the process Answer: C Difficulty: 2: Moderate Chapter: 8 Skill: Concept LO: 8-2: To understand the structural changes necessary as the firm develops and changes strategies over time AACSB: Application of knowledge 31) No matter what the stage of internationalization, a firm's structural choices always involve ________.

A) low standardization procedures B) integration and differentiation C) vertical job specialization D) mass marketing and niche marketing Answer: B Difficulty: 1: Easy Chapter: 8 Skill: Concept LO: 8-3: To become familiar with the types of organizational designs suitable for the level and scope of internationalization of the firm AACSB: Application of knowledge

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32) Which of the following would exert pressure on a firm to become locally responsive?

A) the need to monitor and respond to global competitors B) the need to cater to local customer needs C) the desire to capitalize on converging consumer trends D) the desire to provide uniform service to consumers Answer: B Difficulty: 2: Moderate Chapter: 8 Skill: Concept LO: 8-3: To become familiar with the types of organizational designs suitable for the level and scope of internationalization of the firm AACSB: Application of knowledge 33) Which of the following refers to focusing on and specializing in specific markets?

A) integration B) implementation C) differentiation D) globalization Answer: C Difficulty: 1: Easy Chapter: 8 Skill: Concept LO: 8-3: To become familiar with the types of organizational designs suitable for the level and scope of internationalization of the firm AACSB: Application of knowledge 34) Which of the following refers to the coordination of specific markets?

A) differentiation B) globalization C) diversification D) integration Answer: D Difficulty: 1: Easy Chapter: 8 Skill: Concept LO: 8-3: To become familiar with the types of organizational designs suitable for the level and scope of internationalization of the firm AACSB: Application of knowledge

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35) A specific strategy that treats the world as one market by using a standardized approach to products and markets is called ________.

A) globalization B) localization C) differentiation D) integration Answer: A Difficulty: 1: Easy Chapter: 8 Skill: Concept LO: 8-3: To become familiar with the types of organizational designs suitable for the level and scope of internationalization of the firm AACSB: Application of knowledge 36) Managers choose the manufacturing location for each product based on where the best combination of cost, quality, and technology can be attained in order to achieve ________.

A) customer loyalty B) integration C) segregation D) rationalization Answer: D Difficulty: 1: Easy Chapter: 8 Skill: Concept LO: 8-3: To become familiar with the types of organizational designs suitable for the level and scope of internationalization of the firm AACSB: Application of knowledge 37) The advantage of rationalization is ________.

A) high cost of production B) widely varying product design for different markets around the world C) different marketing and sales strategies are adopted for each country D) economies of scale Answer: D Difficulty: 1: Easy Chapter: 8 Skill: Concept LO: 8-3: To become familiar with the types of organizational designs suitable for the level and scope of internationalization of the firm AACSB: Application of knowledge

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38) Which of the following refers to a problem that firms with structurally sophisticated global networks are most likely to face?

A) environmental volatility B) competition from domestic firms C) low cost savings D) import tariffs Answer: A Difficulty: 2: Moderate Chapter: 8 Skill: Concept LO: 8-3: To become familiar with the types of organizational designs suitable for the level and scope of internationalization of the firm AACSB: Application of knowledge 39) In their rush to get on the globalization bandwagon, too many firms have ________.

A) opted for niche marketing B) sacrificed the ability to respond to local market structures and consumer preferences C) overly focused on local markets at the cost of losing out on market share abroad D) wrongly overestimated the importance of mass customization for the global market Answer: B Difficulty: 1: Easy Chapter: 8 Skill: Concept LO: 8-3: To become familiar with the types of organizational designs suitable for the level and scope of internationalization of the firm AACSB: Application of knowledge 40) The ________ the level of the company at which managers make decisions, the more that organization is ________.

A) higher; decentralized B) lower; centralized C) lower; decentralized D) higher; unstructured Answer: C Difficulty: 1: Easy Chapter: 8 Skill: Concept LO: 8-3: To become familiar with the types of organizational designs suitable for the level and scope of internationalization of the firm AACSB: Application of knowledge

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41) Beautycare is an Illinois-based cosmetics company, manufactures a wide range of natural cosmetics and skin-care products. The company has international divisions located in Singapore and London. The top management at Beautycare is currently considering making a change to the company's organizational structure. Which of the following, if true, best supports the argument that Beautycare should change its organizational structure?

A) The labor union consisting of Beautycare's full-time employees successfully negotiated a hike in their annual compensation with management a few months ago.

B) Beautycare's exports its products to the emerging markets in Asia and Africa.

C) Employee attrition is low at Beautycare.

D) Employees at Beautycare complain that they are too bogged down with administrative tasks to focus on creating new products and concepts.

Answer: D Difficulty: 3: Challenging Chapter: 8 Skill: Critical Thinking LO: 8-3: To become familiar with the types of organizational designs suitable for the level and scope of internationalization of the firm AACSB: Reflective thinking 42) Centralized global product responsibility implies that ________.

A) a single manager at the headquarters is responsible for a specific product around the world B) a single manager is responsible for a specific product locally C) a group of managers at the headquarters jointly shares product responsibility D) product responsibility rests with subsidiary managers Answer: A Difficulty: 2: Moderate Chapter: 8 Skill: Concept LO: 8-3: To become familiar with the types of organizational designs suitable for the level and scope of internationalization of the firm AACSB: Application of knowledge 43) The organizational structure for global e-business, in particular for physical products tends to involve ________.

A) network of bricks-and-mortar services B) this structure of functions and alliances makes up a combination of electronic and physical stages of the supply chain network C) decentralized e-exchanges for logistics, supplies, and customers that could be housed anywhere D) the final distribution system and the customer interaction must be tailored to the headquarterslocation physical infrastructure and payment infrastructure Answer: B Difficulty: 3: Challenging Chapter: 8 Skill: Application LO: 8-4: To understand emergent structural forms in the global economy AACSB: Application of knowledge 15 .

44) ________ refers to an organization running its operations and opening subsidiaries worldwide right from the beginning.

A) International joint venture B) The subordinateship phenomenon C) The born-global phenomenon D) Outsourcing Answer: C Difficulty: 1: Easy Chapter: 8 Skill: Concept LO: 8-4: To understand emergent structural forms in the global economy AACSB: Application of knowledge 45) CADE International is a small American high-technology firm that has been successfully competing in the international business arena from its inception two years ago. Instead of internationalizing slowly, CADE International embarked upon an ambitious plan to leverage niche market opportunities worldwide—right from the beginning. Papillion Inc. exemplifies the ________ phenomenon.

A) born-global B) subordinateship C) outsourcing D) insourcing Answer: A Difficulty: 3: Challenging Chapter: 8 Skill: Application LO: 8-4: To understand emergent structural forms in the global economy AACSB: Analytical thinking; Application of knowledge 46) Which of the following is true with regard to born globals?

A) Born globals cater to a single, narrow market segment.

B) In their rush to get on the globalization bandwagon, born globals have categorically ignored domestic market opportunities.

C) Born globals operate in the international business arena right from their inception.

D) Born globals do not have foreign subsidiaries.

Answer: C Difficulty: 1: Easy Chapter: 8 Skill: Concept LO: 8-4: To understand emergent structural forms in the global economy AACSB: Application of knowledge

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47) Which of the following statements is true regarding business groups?

A) They are common in developed economies but not in emerging markets.

B) Often, they consists of firms in related industrial sections.

C) In countries with strong institutional environments, they help to create a superior internal market for capital, labor and politics.

D) They tend to be comprised of legally separate firms.

Answer: D Difficulty: 2: Moderate Chapter: 8 Skill: Concept LO: 8-4: To understand emergent structural forms in the global economy AACSB: Application of knowledge 48) Customizing a range of products in a combination suitable for a particular target market, as a response for the increasing need for speedy adaptation to the market, is known as ________.

A) outsourcing B) diversification C) platformisation D) internationalization Answer: C Difficulty: 1: Easy Chapter: 8 Skill: Concept LO: 8-4: To understand emergent structural forms in the global economy AACSB: Application of knowledge 49) Bonna Inc. is a hybrid organization. The organizational structure of the company has been developed to combine geographic support for both global integration and local responsiveness.

Bonna is not a hierarchical organization and uses cross-functional teams to quickly adapt to the dynamic business environment. If the above information is true, which of the following can be fittingly inferred?

A) that Bonna has only a few SBUs B) that Bonna has a matrix structure C) that Bonna is a born global D) that Bonna does not favor standardization of its products Answer: B Difficulty: 3: Challenging Chapter: 8 Skill: Critical Thinking LO: 8-4: To understand emergent structural forms in the global economy AACSB: Reflective thinking; Application of knowledge

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50) Using the Internet to streamline global supply systems ________.

A) enhances the efficiency of the supply chain B) eliminates the reliance on local suppliers C) creates a vertical hierarchical structure within organizations D) increases fixed costs Answer: A Difficulty: 1: Easy Chapter: 8 Skill: Concept LO: 8-4: To understand emergent structural forms in the global economy AACSB: Information technology 51) ________ refers to the ability to manage across national boundaries, retaining local flexibility while achieving global integration.

A) Positioning B) Globalization C) Transnational capability D) Filtering capability Answer: C Difficulty: 1: Easy Chapter: 8 Skill: Concept LO: 8-4: To understand emergent structural forms in the global economy AACSB: Application of knowledge 52) To address the globalization–localization dilemma, firms that have evolved through the multinational form and the global company seek the advantages of ________ in the pursuit of transnational capability.

A) niche marketing B) horizontal organization C) a narrow product line D) vertical organization Answer: B Difficulty: 1: Easy Chapter: 8 Skill: Concept LO: 8-4: To understand emergent structural forms in the global economy AACSB: Application of knowledge

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53) Two major variables in choosing the structure and design of an organization are the opportunities and need for ________.

A) globalization and localization B) mass marketing and niche marketing C) vertical mobility and horizontal mobility D) differentiation and integration Answer: A Difficulty: 1: Easy Chapter: 8 Skill: Concept LO: 8-5: To understand the role of technology in the evolution of the networked structure and to appreciate the role of teams in achieving business goals AACSB: Application of knowledge 54) According to the ________ model, as the company becomes larger, more complex, and more sophisticated in its approach to world markets, it may evolve into a transnational corporation.

A) four stages of contribution B) crowdsourcing C) matrix D) evolutionary stages Answer: D Difficulty: 1: Easy Chapter: 8 Skill: Concept LO: 8-5: To understand the role of technology in the evolution of the networked structure and to appreciate the role of teams in achieving business goals AACSB: Application of knowledge 55) The ________ strategy involves maximizing opportunities for both efficiency and local responsiveness by adopting a structure that uses alliances, networks, and horizontal design formats.

A) multidomestic structure B) transnational corporation C) international division structure D) global structure Answer: B Difficulty: 1: Easy Chapter: 8 Skill: Concept LO: 8-5: To understand the role of technology in the evolution of the networked structure and to appreciate the role of teams in achieving business goals AACSB: Application of knowledge

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56) Historically, the geographic division structure is associated with companies pursuing ________ strategies.

A) multidomestic B) transnational C) global D) international Answer: A Difficulty: 1: Easy Chapter: 8 Skill: Concept LO: 8-5: To understand the role of technology in the evolution of the networked structure and to appreciate the role of teams in achieving business goals AACSB: Application of knowledge 57) At persistent signs of ineffective work, a company should ________.

A) switch from a customer orientation to a product orientation B) implement price skimming C) analyze its organizational design, systems, and work flow for the possible causes of those problems D) acquire smaller born globals to regain lost market share Answer: C Difficulty: 1: Easy Chapter: 8 Skill: Concept LO: 8-5: To understand the role of technology in the evolution of the networked structure and to appreciate the role of teams in achieving business goals AACSB: Application of knowledge 58) The organizational culture has a low impact in a ________ strategy.

A) global B) transnational C) multidomestic D) international Answer: C Difficulty: 1: Easy Chapter: 8 Skill: Concept LO: 8-5: To understand the role of technology in the evolution of the networked structure and to appreciate the role of teams in achieving business goals AACSB: Application of knowledge

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59) In general, centralized decision making is common for some functions such as ________.

A) sales B) finance C) marketing D) production Answer: B Difficulty: 1: Easy Chapter: 8 Skill: Concept LO: 8-5: To understand the role of technology in the evolution of the networked structure and to appreciate the role of teams in achieving business goals AACSB: Application of knowledge 60) Which of the following indicates a need for change in organizational design?

A) low turnover B) a decrease in overseas customer complaints C) seamless innovation D) new management with different goals and strategies Answer: D Difficulty: 1: Easy Chapter: 8 Skill: Concept LO: 8-5: To understand the role of technology in the evolution of the networked structure and to appreciate the role of teams in achieving business goals AACSB: Application of knowledge 61) In general, decentralized decision making is common for some functions such as ________.

A) finance B) research and development C) production D) strategic management Answer: C Difficulty: 1: Easy Chapter: 8 Skill: Concept LO: 8-5: To understand the role of technology in the evolution of the networked structure and to appreciate the role of teams in achieving business goals AACSB: Application of knowledge

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62) Decentralized decision making is beneficial when ________.

A) all subsidiaries use the same inputs in production B) fast-changing national business environments put a premium on local responsiveness C) one subsidiary's output is another's input D) it aims to create a single global organizational culture Answer: B Difficulty: 2: Moderate Chapter: 8 Skill: Concept LO: 8-6: To realize how organizational design affects the manager's job, for example, on the level and location of decision making AACSB: Application of knowledge 63) The best organizational structure is the one that ________.

A) does not allow any compromise on the globalization-localization continuum B) upholds the status quo C) actively resists organizational change D) facilitates the firm's goals and is appropriate to its industry, size, technology, and competitive environment Answer: D Difficulty: 1: Easy Chapter: 8 Skill: Concept LO: 8-6: To realize how organizational design affects the manager's job, for example, on the level and location of decision making AACSB: Application of knowledge 64) Which of the following gives headquarters considerable authority and control over the firm's activities worldwide?

A) nationalization B) home replication strategy C) centralized approach D) decentralized approach Answer: C Difficulty: 1: Easy Chapter: 8 Skill: Concept LO: 8-6: To realize how organizational design affects the manager's job, for example, on the level and location of decision making AACSB: Application of knowledge

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65) To be effective, an organizational structure should ________.

A) not accommodate overlapping responsibilities B) be rigid C) be highly adaptable to the changing needs of the company D) be the same as that of its competitors Answer: C Difficulty: 1: Easy Chapter: 8 Skill: Concept LO: 8-6: To realize how organizational design affects the manager's job, for example, on the level and location of decision making AACSB: Application of knowledge 66) ________ is most likely to reduce the effectiveness of an organizational structure.

A) Low adaptability B) Fluidity C) Dynamism D) High flexibility Answer: A Difficulty: 1: Easy Chapter: 8 Skill: Concept LO: 8-6: To realize how organizational design affects the manager's job, for example, on the level and location of decision making AACSB: Application of knowledge 67) The feedback from the control process and the information systems should ________.

A) point out the most suitable organizational structure for a company at a given point in time B) help employees formulate a plan for personal development C) signal any necessary change in strategy, structure, or operations in a timely manner D) eliminate organizational anarchy Answer: C Difficulty: 1: Easy Chapter: 8 Skill: Concept LO: 8-6: To realize how organizational design affects the manager's job, for example, on the level and location of decision making AACSB: Application of knowledge

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68) Which of the following is true with regard to direct coordinating mechanisms?

A) Expatriates from "headquarters" do not exert control over the foreign affiliate through the expectations of the national and corporate culture of the parent company.

B) Even in situations where parent control is considered less important, delegating the control to the local level is ritually avoided.

C) Direct coordinating mechanisms that provide the basis for the overall guidance and management of foreign operations include, the design of appropriate organizational structures and the use of effective staffing practices.

D) Direct coordinating mechanisms do not include staffing practices.

Answer: C Difficulty: 2: Moderate Chapter: 8 Skill: Concept LO: 8-6: To realize how organizational design affects the manager's job, for example, on the level and location of decision making AACSB: Application of knowledge 69) Which of the following is an example of an "indirect" control mechanism for the MNC? A) staffing key positions at foreign affiliates with expatriates B) visits by head office personnel C) sales quotas and budgets D) regular meeting to allow employees around the world to consult and troubleshoot Answer: C Difficulty: 2: Moderate Chapter: 8 Skill: Application LO: 8-7: To emphasize the role of control and monitoring systems suitable for specific situations and locations in the firm's international operations AACSB: Application of knowledge 70) Indirect coordinating mechanisms typically include all of the following EXCEPT ________.

A) sales quotas B) budgets C) visits by head-office personnel D) feedback reports Answer: C Difficulty: 2: Moderate Chapter: 8 Skill: Concept LO: 8-6: To realize how organizational design affects the manager's job, for example, on the level and location of decision making AACSB: Application of knowledge

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71) Which of the following refers to a financial variable in MNC reports that complicates financial statements and performance evaluations?

A) annual budget B) inflation level C) sales forecast D) overhead costs Answer: B Difficulty: 1: Easy Chapter: 8 Skill: Concept LO: 8-6: To realize how organizational design affects the manager's job, for example, on the level and location of decision making AACSB: Application of knowledge 72) To reconcile accounting statements, MNCs usually require ________ different sets of financial statements from subsidiaries.

A) two B) three C) five D) seven Answer: B Difficulty: 1: Easy Chapter: 8 Skill: Concept LO: 8-6: To realize how organizational design affects the manager's job, for example, on the level and location of decision making AACSB: Application of knowledge 73) Which of the following is true with regard to indirect coordinating mechanisms?

A) Indirect coordinating mechanisms do not include feedback reports.

B) Indirect coordinating mechanisms typically include visits by head-office personnel.

C) Indirect coordinating mechanisms typically include sales quotas.

D) Indirect coordinating mechanisms include regular meetings to allow employees around the world to consult and troubleshoot.

Answer: C Difficulty: 1: Easy Chapter: 8 Skill: Concept LO: 8-6: To realize how organizational design affects the manager's job, for example, on the level and location of decision making AACSB: Application of knowledge

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74) The degree to which headquarters' practices and goals are transferable most likely depends on whether ________.

A) top managers are from the head office, the host country, or a third country B) the organization is product- or service-oriented C) financial performance reports show a positive trend in growth over the past several years D) the production system is standardized Answer: A Difficulty: 1: Easy Chapter: 8 Skill: Concept LO: 8-7: To emphasize the role of control and monitoring systems suitable for specific situations and locations in the firm's international operations AACSB: Application of knowledge 75) Which of the following is true of Ueno and Sekaran's study of Japanese and U.S. firms with regard to monitoring and reporting systems?

A) U.S. firms tend to use long-term evaluations to a greater extent.

B) Compared to U.S. firms, Japanese firms build budget slack to a greater extent.

C) U.S. firms tend to use communication and coordination processes more extensively than Japanese firms.

D) Japanese managers are more likely to use formal communication and coordination processes.

Answer: C Difficulty: 1: Easy Chapter: 8 Skill: Concept LO: 8-7: To emphasize the role of control and monitoring systems suitable for specific situations and locations in the firm's international operations AACSB: Application of knowledge 76) Which of the following factors adversely affects the accuracy and the timeliness of information systems in less-developed countries?

A) limited sources of data for decision making B) high cost of capital items C) expensive labor D) strict labor laws Answer: A Difficulty: 1: Easy Chapter: 8 Skill: Concept LO: 8-7: To emphasize the role of control and monitoring systems suitable for specific situations and locations in the firm's international operations AACSB: Application of knowledge

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77) Which of the following is true with regard to information systems in less-developed countries?

A) In less-developed countries, the sources of reliable data for decision making is relatively high in number.

B) The accuracy and timeliness of information systems are often less than perfect in lessdeveloped countries.

C) In less-developed countries, the sources of reliable data for decision making are easy to locate.

D) Government information in less-developed countries is rarely fabricated, so it is considered to be the most reliable source of information for headquarters managers.

Answer: B Difficulty: 1: Easy Chapter: 8 Skill: Concept LO: 8-7: To emphasize the role of control and monitoring systems suitable for specific situations and locations in the firm's international operations AACSB: Application of knowledge 78) The noncomparability of performance data across countries ________.

A) reduces employee empowerment B) hinders the evaluation process C) lowers production D) enhances the overall organizational efficiency Answer: B Difficulty: 1: Easy Chapter: 8 Skill: Concept LO: 8-7: To emphasize the role of control and monitoring systems suitable for specific situations and locations in the firm's international operations AACSB: Application of knowledge 79) Meaningful, long-term performance standards can be provided by taking into account nonfinancial measures such as ________.

A) union relations B) taxes C) transfer pricing D) exchange-rate fluctuations Answer: A Difficulty: 1: Easy Chapter: 8 Skill: Concept LO: 8-7: To emphasize the role of control and monitoring systems suitable for specific situations and locations in the firm's international operations AACSB: Application of knowledge

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80) Strategic plans are decision that cannot have an affect on a company's competitive position or bottom line only after they are implemented.

Answer: TRUE Difficulty: 1: Easy Chapter: 8 Skill: Concept LO: 8-1: To understand the importance of appropriate organizational structures to effective strategy implementation AACSB: Application of knowledge 81) It is not necessary to adapt organizational structures to facilitate changes in strategy, competitive moves, and changes in the environment.

Answer: FALSE Difficulty: 1: Easy Chapter: 8 Skill: Concept LO: 8-1: To understand the importance of appropriate organizational structures to effective strategy implementation AACSB: Application of knowledge 82) Smaller firms usually start their international involvement by exporting, using the services of an export management company.

Answer: TRUE Difficulty: 1: Easy Chapter: 8 Skill: Concept LO: 8-2: To understand the structural changes necessary as the firm develops and changes strategies over time AACSB: Application of knowledge 83) To develop specific markets to their maximum potential toward worldwide operations by setting up an operation that includes a wholly owned foreign subsidiary.

Answer: TRUE Difficulty: 1: Easy Chapter: 8 Skill: Concept LO: 8-2: To understand the structural changes necessary as the firm develops and changes strategies over time AACSB: Application of knowledge

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84) Internationalization is the process by which a firm gradually changes in response to global competition; domestic market saturation; and the desire for expansion, new markets, and diversification.

Answer: TRUE Difficulty: 1: Easy Chapter: 8 Skill: Concept LO: 8-2: To understand the structural changes necessary as the firm develops and changes strategies over time AACSB: Application of knowledge 85) If a firm uses the stages model they may start their internationalization as an exporter, and then pursue either an international joint venture or the setting up of a foreign subsidiary.

Answer: FALSE Difficulty: 2: Moderate Chapter: 8 Skill: Concept LO: 8-2: To understand the structural changes necessary as the firm develops and changes strategies over time AACSB: Application of knowledge 86) Small firms typically start their international involvement by getting involved in exporting.

Answer: TRUE Difficulty: 1: Easy Chapter: 8 Skill: Concept LO: 8-2: To understand the structural changes necessary as the firm develops and changes strategies over time AACSB: Application of knowledge 87) A strategic business unit (SBU) is a self-contained business with its own functional departments and accounting systems.

Answer: TRUE Difficulty: 1: Easy Chapter: 8 Skill: Concept LO: 8-2: To understand the structural changes necessary as the firm develops and changes strategies over time AACSB: Application of knowledge

29 .

88) Regardless of the stage of internationalization, a firm's structural choices always involve two opposing forces: globalization and localization.

Answer: FALSE Difficulty: 1: Easy Chapter: 8 Skill: Concept LO: 8-3: To become familiar with the types of organizational designs suitable for the level and scope of internationalization of the firm AACSB: Application of knowledge 89) The advantages of this organizational form are market concentration, innovation, and responsiveness to new opportunities in a particular environment.

Answer: TRUE Difficulty: 2: Moderate Chapter: 8 Skill: Concept LO: 8-2: To understand the structural changes necessary as the firm develops and changes strategies over time AACSB: Application of knowledge 90) Global functional structures are primarily used by small firms with highly decentralized systems.

Answer: FALSE Difficulty: 2: Moderate Chapter: 8 Skill: Concept LO: 8-3: To become familiar with the types of organizational designs suitable for the level and scope of internationalization of the firm AACSB: Application of knowledge 91) Global trends and competitive forces have put increased pressure on multinational corporations to adopt a strategy of internationalization.

Answer: FALSE Difficulty: 2: Moderate Chapter: 8 Skill: Concept LO: 8-3: To become familiar with the types of organizational designs suitable for the level and scope of internationalization of the firm AACSB: Application of knowledge

30 .

92) A global functional structure is designed on the basis of the company's functions— production, marketing, finance, and so forth.

Answer: TRUE Difficulty: 1: Easy Chapter: 8 Skill: Concept LO: 8-3: To become familiar with the types of organizational designs suitable for the level and scope of internationalization of the firm AACSB: Application of knowledge 93) For firms with diversified product lines that have different technological bases and are aimed at dissimilar or dispersed markets, a functional structure is far more strategically advantageous than a global product structure.

Answer: FALSE Difficulty: 1: Easy Chapter: 8 Skill: Concept LO: 8-3: To become familiar with the types of organizational designs suitable for the level and scope of internationalization of the firm AACSB: Application of knowledge 94) To achieve rationalization, managers choose the manufacturing location for each product based on where the best combination of overall cost—for example, labor, transportation, utilities, taxes—quality of products or services, technology, proximity to markets.

Answer: TRUE Difficulty: 1: Easy Chapter: 8 Skill: Concept LO: 8-3: To become familiar with the types of organizational designs suitable for the level and scope of internationalization of the firm AACSB: Application of knowledge 95) The downside of rationalization is the lack of differentiation and specialization for local markets.

Answer: TRUE Difficulty: 1: Easy Chapter: 8 Skill: Concept LO: 8-3: To become familiar with the types of organizational designs suitable for the level and scope of internationalization of the firm AACSB: Application of knowledge

31 .

96) To achieve rationalization, managers choose the manufacturing location for each product based on where the best combination of cost, quality, and technology can be attained.

Answer: TRUE Difficulty: 1: Easy Chapter: 8 Skill: Concept LO: 8-3: To become familiar with the types of organizational designs suitable for the level and scope of internationalization of the firm AACSB: Application of knowledge 97) Rationalization involves producing different products or component parts in different countries.

Answer: TRUE Difficulty: 1: Easy Chapter: 8 Skill: Concept LO: 8-3: To become familiar with the types of organizational designs suitable for the level and scope of internationalization of the firm AACSB: Application of knowledge 98) Two major variables in choosing the structure and design of an organization are the opportunities and need for differentiation and integration.

Answer: FALSE Difficulty: 1: Easy Chapter: 8 Skill: Concept LO: 8-3: To become familiar with the types of organizational designs suitable for the level and scope of internationalization of the firm AACSB: Application of knowledge 99) Intel's "Platformisation" refers to customizing a range of chips in a combination suitable for a particular target market, as a response for the increasing need for speedy adaptation to the market.

Answer: TRUE Difficulty: 1: Easy Chapter: 8 Skill: Concept LO: 8-4: To understand emergent structural forms in the global economy AACSB: Application of knowledge

32 .

100) The organizational structure for global e-businesses, in particular for physical products, typically involves a network of virtual e-exchanges and "bricks and mortar" services.

Answer: TRUE Difficulty: 1: Easy Chapter: 8 Skill: Concept LO: 8-4: To understand emergent structural forms in the global economy AACSB: Application of knowledge 101) A matrix organization with unclear responsibilities, a lack of accountability, and political battles over resources, results in risk-averse behavior and loss of market share.

Answer: TRUE Difficulty: 2: Moderate Chapter: 8 Skill: Concept LO: 8-4: To understand emergent structural forms in the global economy AACSB: Application of knowledge 102) A matrix structure can be used to take advantage of personal skill and experiences shared across both functional and divisional structures.

Answer: TRUE Difficulty: 2: Moderate Chapter: 8 Skill: Concept LO: 8-4: To understand emergent structural forms in the global economy AACSB: Application of knowledge 103) To address the globalization-localization dilemma, firms that have evolved through the multinational form and the global company seek the advantages of horizontal organization in the pursuit of transnational capability.

Answer: TRUE Difficulty: 1: Easy Chapter: 8 Skill: Concept LO: 8-4: To understand emergent structural forms in the global economy AACSB: Application of knowledge 104) The global functional structure typical of the transnational company creates a complex coordination and control system, as it attempts to combine the capabilities and resources of a multinational corporation.

Answer: FALSE Difficulty: 1: Easy Chapter: 8 Skill: Concept LO: 8-4: To understand emergent structural forms in the global economy AACSB: Application of knowledge 33 .

105) A matrix structure is a hybrid organization of overlapping responsibilities.

Answer: TRUE Difficulty: 1: Easy Chapter: 8 Skill: Concept LO: 8-4: To understand emergent structural forms in the global economy AACSB: Application of knowledge 106) A matrix structure is an organizational structure that divides worldwide operations according to a company's product areas.

Answer: FALSE Difficulty: 1: Easy Chapter: 8 Skill: Concept LO: 8-4: To understand emergent structural forms in the global economy AACSB: Application of knowledge 107) Globalization is a specific strategy that treats the world as one market by using a non standardized approach to products and markets adapting to each market differently.

Answer: FALSE Difficulty: 2: Moderate Chapter: 8 Skill: Concept LO: 8-4: To understand emergent structural forms in the global economy AACSB: Application of knowledge 108) Companies are increasingly abandoning rigid structures in an attempt to be more flexible and responsive to the dynamic global environment.

Answer: TRUE Difficulty: 1: Easy Chapter: 8 Skill: Application LO: 8-4: To understand emergent structural forms in the global economy AACSB: Application of knowledge 109) Rapidly changing competition and global business activities demand companies to run their worldwide operations effectively and efficiently, based on the right business models and organizational structures.

Answer: TRUE Difficulty: 1: Easy Chapter: 8 Skill: Application LO: 8-4: To understand emergent structural forms in the global economy AACSB: Application of knowledge

34 .

110) In dealing with the rapidly changing global business environment structural changes could include becoming more hierarchical.

Answer: FALSE Difficulty: 1: Easy Chapter: 8 Skill: Application LO: 8-4: To understand emergent structural forms in the global economy AACSB: Application of knowledge 111) In general, decentralized decision making is common for functions such as finance, and research and development Answer: FALSE Difficulty: 1: Easy Chapter: 8 Skill: Concept LO: 8-5: To understand the role of technology in the evolution of the networked structure and to appreciate the role of teams in achieving business goals AACSB: Application of knowledge 112) By transitioning to formats such as interorganizational networks, companies are abandoning traditional structures and switching to more rigid organizational structures.

Answer: FALSE Difficulty: 1: Easy Chapter: 8 Skill: Concept LO: 8-6: To realize how organizational design affects the manager's job, for example, on the level and location of decision making AACSB: Application of knowledge 113) Effective means doing this the right way, while efficient means doing so without wasting any resources.

Answer: TRUE Difficulty: 1: Easy Chapter: 8 Skill: Application LO: 8-6: To realize how organizational design affects the manager's job, for example, on the level and location of decision making AACSB: Application of knowledge

35 .

114) Direct mechanisms that provide the basis for the overall guidance and management of foreign operations include the design of appropriate structures.

Answer: TRUE Difficulty: 1: Easy Chapter: 8 Skill: Concept LO: 8-6: To realize how organizational design affects the manager's job, for example, on the level and location of decision making AACSB: Application of knowledge 115) Management information system can be a problem for headquarters managers in their attempt to maintain efficient coordination of activities and consolidation of results.

Answer: TRUE Difficulty: 1: Easy Chapter: 8 Skill: Concept LO: 8-7: To emphasize the role of control and monitoring systems suitable for specific situations and locations in the firm's international operations AACSB: Application of knowledge 116) Variables such as transfer pricing and exchange-rate fluctuations do not influence profitability patterns.

Answer: FALSE Difficulty: 1: Easy Chapter: 8 Skill: Concept LO: 8-7: To emphasize the role of control and monitoring systems suitable for specific situations and locations in the firm's international operations AACSB: Application of knowledge

36 .

117) What are the major variables that should be taken into account when designing a firm's organizational structure?

Answer: The design of an organization, as with any other management function, should be contingency-based, taking into account the variables of that particular system at that specific point in time. Major variables include the firm's strategy, size, and appropriate technology, as well as the environment in those parts of the world in which the firm operates. Given the increased complexity of the variables involved in the international context, it is no easy task to design the most suitable organizational structure and subsystems. In fact, research shows that most international managers find it easier to determine what to do to compete globally (strategy) than to decide how to develop the organizational capability (structure) to do it. Additional variables affecting structural choices—geographic dispersion as well as differences in time, language, cultural attitudes, and business practices—introduce further layers of complication.

Difficulty: 2: Moderate Chapter: 8 Skill: Concept LO: 8-2: To understand the structural changes necessary as the firm develops and changes strategies over time AACSB: Application of knowledge 118) List the typical ways in which firms organize their international activities.

Answer: The typical ways in which firms organize their international activities are shown in the following list. Larger companies often use several of these structures in different regions or parts of their organization.

1. Domestic structure plus export department 2. Domestic structure plus foreign subsidiary 3. International division 4. Global functional structure 5. Global product structure 6. Matrix structure Difficulty: 2: Moderate Chapter: 8 Skill: Concept LO: 8-2: To understand the structural changes necessary as the firm develops and changes strategies over time AACSB: Application of knowledge

37 .

119) Briefly describe the characteristics of the global geographic structure.

Answer: In the global geographic (area) structure–the most common form of organizing foreign operations—divisions are created to cover geographic regions. Each regional manager is responsible for the operations and performance of the countries within a given region. In this way, country and regional needs and relative market knowledge take precedence over product expertise. Local managers are familiar with the cultural environment, government regulations, and business transactions. In addition, their language skills and local contacts facilitate daily transactions and responsiveness to the market and the customer. While this is a good structure for consolidating regional expertise, problems of coordination across regions may arise.

Difficulty: 2: Moderate Chapter: 8 Skill: Concept LO: 8-2: To understand the structural changes necessary as the firm develops and changes strategies over time AACSB: Application of knowledge 120) What is a transnational organization?

Answer: A transnational organization is an emergent structural form that provides the company with the ability to manage across national boundaries, retaining local flexibility while achieving global integration. This capability involves linking their foreign operations in a flexible way to one another and to headquarters, thereby leveraging local and central capabilities.

Difficulty: 2: Moderate Chapter: 8 Skill: Application LO: 8-4: To understand emergent structural forms in the global economy AACSB: Application of knowledge 121) Why are global companies increasingly abandoning rigid structures? How are they adapting to the changing global environment?

Answer: Companies are increasingly abandoning rigid structures in an attempt to be more flexible and responsive to the dynamic global environment. Some of the ways they are adapting are by transitioning to formats known as interorganizational networks, global e-corporation network structures, and transnational corporation network structures.

Difficulty: 1: Easy Chapter: 8 Skill: Concept LO: 8-6: To realize how organizational design affects the manager's job, for example, on the level and location of decision making AACSB: Application of knowledge

38 .

122) Describe the organizational structure and characteristics of transnational corporations.

Answer: A transnational corporation has the ability to manage across national boundaries, retaining local flexibility while achieving global integration. This ability involves linking foreign operations to each other and to headquarters in a flexible way so as to leverage local and central capabilities. This structure is less a matter of boxes on an organizational chart and more a matter of a network of the company's units and their system of horizontal communication. This involves lateral communication across networks of units and alliances rather than in a hierarchy. The system requires the dispersal of responsibility and decision making to local subsidiaries and alliances. The effectiveness of that localized decision making depends a great deal on the ability and willingness to share current and new learning and technology across the network of units.

The matrix structure typical of the transnational company creates a complex coordination and control system as it attempts to combine: (1) the capabilities and resources of a multinational corporation, (2) the economies of scale of a global corporation, (3) the local responsiveness of a domestic company, and (4) the ability to transfer technology efficiently typical of the international structure.

Difficulty: 2: Moderate Chapter: 8 Skill: Concept LO: 8-6: To realize how organizational design affects the manager's job, for example, on the level and location of decision making AACSB: Application of knowledge 123) What are the changes necessitating new structural designs for organizations?

Answer: The changes that may necessitate new structural designs for organizations are as follows: 1. New management with different goals and strategies 2. Downturn in profitability or finances 3. Lack of competitiveness, failure to meet goals or capitalize on opportunities 4. Poor management, leadership, communication, delegation, or morale 5. New strategic directions: growth, alliances, retrenchment; global expansion from directing export activities to controlling overseas manufacturing and marketing units; a change in the size of operations on a country, regional, or worldwide basis; or failure of foreign operations to grow in accordance with plans and expectations 6. Clashes among divisions, subsidiaries, or individuals over territories or customers in the field 7. Divisive conflicts between overseas units and domestic division staff or corporate staff 8. Underutilization of overseas manufacturing or distribution facilities 9. Duplication of sales offices or geographic operational units within an area 10. An increase in overseas customer service complaints 11. Breakdowns in communications within and among organizations 12. Bottlenecks, too many reporting layers, and ill-defined executive responsibilities 13. Lack of innovation Difficulty: 2: Moderate Chapter: 8 Skill: Concept LO: 8-6: To realize how organizational design affects the manager's job, for example, on the level and location of decision making AACSB: Application of knowledge 39 .

124) What are direct and indirect coordinating mechanisms?

Answer: Direct mechanisms that provide the basis for the overall guidance and management of foreign operations include the design of appropriate structures and the use of effective staffing practices. Such decisions proactively set the stage for operations to meet goals, rather than troubleshooting deviations or problems after they have occurred. Expatriates from "headquarters" exert control over the foreign affiliate through the expectations of the national and corporate culture of the parent company. If the staffing assignment is handled through third country nationals, it is likely that somewhat less of the corporate culture might be present locally, and certainly less of the national culture of the parent. Other direct mechanisms are visits by headoffice personnel and regular meetings to allow employees around the world to consult and troubleshoot. Increasingly, those meetings comprise videoconferences to allow face-to-face, if not physical, interaction among managers around the world to enable faster and less-expensive frequent meetings.

Indirect coordinating mechanisms typically include sales quotas, budgets, and other financial tools, as well as feedback reports, which give information about the sales and financial performance of the subsidiary for the last quarter or year.

Difficulty: 2: Moderate Chapter: 8 Skill: Concept LO: 8-6: To realize how organizational design affects the manager's job, for example, on the level and location of decision making AACSB: Application of knowledge 125) What are the major challenges presented by information systems in less-developed countries?

Answer: The accuracy and timeliness of information systems are often less than perfect, especially in less-developed countries, where managers typically operate under conditions of extreme uncertainty. Government information, for example, is often filtered or fabricated; other sources of data for decision making are usually limited. Employees are not used to the kinds of sophisticated information generation, analysis, and reporting systems common in developed countries. Their work norms and sense of necessity and urgency may also confound the problem.

In addition, their available technology, and the ability to manipulate and transmit data are usually limited.

Difficulty: 2: Moderate Chapter: 8 Skill: Concept LO: 8-7: To emphasize the role of control and monitoring systems suitable for specific situations and locations in the firm's international operations AACSB: Application of knowledge

40 .

International Management, 10e, (Deresky/Miller) Chapter 9 Staffing, Training, and Compensation for Global Operations 1) ________ is increasingly being recognized as a major determinant of success or failure in international business.

A) International human resource management B) Procurement of raw materials from abroad C) Outsourcing D) Insourcing Answer: A Difficulty: 1: Easy Chapter: 9 Skill: Concept LO: 9-1: To understand the strategic importance to the firm of the IHRM function and its various responsibilities AACSB: Application of knowledge 2) ________ is the set of activities directed at attracting, developing, and maintaining the effective workforce necessary to achieve a firm's objectives.

A) Labor selection B) Employee development C) Human resource management D) Strategic operations implementation Answer: C Difficulty: 1: Easy Chapter: 9 Skill: Concept LO: 9-1: To understand the strategic importance to the firm of the IHRM function and its various responsibilities AACSB: Application of knowledge 3) Which of the following should ideally dictate the organizational structure and staffing needs of the firm?

A) the firm's customers B) the size of the firm C) the firm's strategy D) the firm's short-term objectives Answer: C Difficulty: 2: Moderate Chapter: 9 Skill: Concept LO: 9-1: To understand the strategic importance to the firm of the IHRM function and its various responsibilities AACSB: Application of knowledge

1 .

4) In addition to the global war for talent, there are considerable strategic competitive challenges for firms. Which of the following is one such challenge?

A) increasing talent in order to lower the costs of operations B) obtaining talent using a regiocentric approach C) obtaining competent talent at higher wages than competitors D) relocating operations around the world Answer: D Difficulty: 2: Moderate Chapter: 9 Skill: Concept LO: 9-2: To learn about the major staffing options for global operations and the factors involved in those choices AACSB: Diverse and multicultural work environments 5) ________ are employees assigned to a country other than their own.

A) Host-country nationals B) Inpatriates C) Third-country nationals D) Expatriates Answer: D Difficulty: 1: Easy Chapter: 9 Skill: Concept LO: 9-2: To learn about the major staffing options for global operations and the factors involved in those choices AACSB: Application of knowledge 6) What term refers to people working and residing in countries other than their native country?

A) host country national B) expatriate C) nonpatriot D) green card resident Answer: B Difficulty: 1: Easy Chapter: 9 Skill: Concept LO: 9-2: To learn about the major staffing options for global operations and the factors involved in those choices AACSB: Application of knowledge

2 .

7) Alec is an American working for a software company in Texas. He has been assigned to work on a project in China for a year. He would be considered as a(n) ________ in China.

A) domicile resident B) expatriate C) host-country national D) third-country national Answer: B Difficulty: 2: Moderate Chapter: 9 Skill: Application LO: 9-2: To learn about the major staffing options for global operations and the factors involved in those choices AACSB: Diverse and multicultural work environments 8) CADE International, an MNC, adheres to an ethnocentric staffing approach when filling senior-level positions for its foreign locations. As a result, CADE most likely devotes significant resources to ________.

A) distributing products B) building effective supply chains C) selecting and training expatriate managers D) determining compensation for local employees Answer: C Difficulty: 2: Moderate Chapter: 9 Skill: Application LO: 9-2: To learn about the major staffing options for global operations and the factors involved in those choices AACSB: Diverse and multicultural work environments 9) LaQuisha Roberts, an American, is a senior manager at her firm's headquarters in New York.

LaQuisha is a(n) ________.

A) parent-country national B) expatriate C) host-country national D) third-country national Answer: A Difficulty: 1: Easy Chapter: 9 Skill: Concept LO: 9-2: To learn about the major staffing options for global operations and the factors involved in those choices AACSB: Application of knowledge

3 .

10) A(n) ________ policy is likely to be used where a company notes the inadequacy of local managerial skills and determines a high need to maintain close communication and coordination with headquarters.

A) global B) regiocentric C) polycentric D) ethnocentric Answer: D Difficulty: 2: Moderate Chapter: 9 Skill: Concept LO: 9-2: To learn about the major staffing options for global operations and the factors involved in those choices AACSB: Application of knowledge 11) Globetech Corporation has offices in over 20 countries. It believes in filling key managerial positions at its foreign subsidiaries with locals (that is, people from the host country). This approach to staffing is ________.

A) Regiocentric B) Ethnocentric C) Polycentric D) Geocentric Answer: C Difficulty: 2: Moderate Chapter: 9 Skill: Concept LO: 9-2: To learn about the major staffing options for global operations and the factors involved in those choices AACSB: Application of knowledge 12) ________ are familiar with company goals, products, technology, policies, and procedures; they know how to get things accomplished through headquarters.

A) Expatriates B) Parent-country nationals C) Third-country nationals D) Host-country nationals Answer: B Difficulty: 1: Easy Chapter: 9 Skill: Concept LO: 9-2: To learn about the major staffing options for global operations and the factors involved in those choices AACSB: Application of knowledge

4 .

13) TechWare, an MNE based in Canada, has foreign operations in Singapore and Tokyo.

TechWare's foreign offices are managed by parent country nationals. What is the most likely advantage of this staffing policy?

A) develops community ties B) generates innovative ideas C) minimizes costs of relocating managers D) facilitates communication with headquarters Answer: D Difficulty: 2: Moderate Chapter: 9 Skill: Concept LO: 9-2: To learn about the major staffing options for global operations and the factors involved in those choices AACSB: Diverse and multicultural work environments 14) Firms using a geocentric staffing model are primarily concerned with ________.

A) ensuring that home office views and policies are maintained B) gaining support and assistance from local communities C) hiring the best person available regardless of nationality D) employing local managers with technical expertise Answer: C Difficulty: 2: Moderate Chapter: 9 Skill: Concept LO: 9-2: To learn about the major staffing options for global operations and the factors involved in those choices AACSB: Diverse and multicultural work environments 15) A company that hires the best-qualified individuals, regardless of nationality, to manage foreign operations is utilizing a(n) ________ approach.

A) horizontal integration B) polycentric staffing C) ethnocentric staffing D) vertical integration Answer: B Difficulty: 2: Moderate Chapter: 9 Skill: Concept LO: 9-2: To learn about the major staffing options for global operations and the factors involved in those choices AACSB: Diverse and multicultural work environments

5 .

16) Which of the following statements is true of polycentric staffing?

A) It reduces the high cost of relocating expatriate managers and their families.

B) It employs managers exclusively from the home country to look out for the company's interests.

C) It helps develop global managers who are familiar with the local culture.

D) It emphasizes on re-creating local operations in the image of home-country operations.

Answer: C Difficulty: 2: Moderate Chapter: 9 Skill: Concept LO: 9-2: To learn about the major staffing options for global operations and the factors involved in those choices AACSB: Diverse and multicultural work environments 17) When the company is at the internationalization stage of strategic expansion and has a centralized structure, it will likely use a(n) ________ staffing approach to fill key managerial positions with PCNs. A) polycentric B) regiocentric C) global D) ethnocentric Answer: D Difficulty: 2: Moderate Chapter: 9 Skill: Concept LO: 9-2: To learn about the major staffing options for global operations and the factors involved in those choices AACSB: Diverse and multicultural work environments 18) ________ are usually preferable when a high level of technical capability is required and maintenance of close control is desired.

A) Parent-country nationals B) Host-country nationals C) Expatriates D) Third-country nationals Answer: A Difficulty: 1: Easy Chapter: 9 Skill: Concept LO: 9-2: To learn about the major staffing options for global operations and the factors involved in those choices AACSB: Application of knowledge

6 .

19) ________ are the usually the preferred choice for a foreign subsidiary where proprietary technology is used extensively.

A) Expatriates B) Parent-country nationals C) Third-country nationals D) Host-country nationals Answer: B Difficulty: 1: Easy Chapter: 9 Skill: Concept LO: 9-2: To learn about the major staffing options for global operations and the factors involved in those choices AACSB: Application of knowledge 20) Which of the following is a disadvantage of the ethnocentric staffing approach?

A) increased opportunities or development for local managers at the expense of PCNs B) low adaptation of expatriates in the parent country C) lack of managerial effectiveness of PCNs in foreign countries D) lack of managerial effectiveness of PCNs in the parent country Answer: C Difficulty: 2: Moderate Chapter: 9 Skill: Concept LO: 9-2: To learn about the major staffing options for global operations and the factors involved in those choices AACSB: Diverse and multicultural work environments 21) ________ staffing approach serves to perpetuate particular personnel selections and other decision-making processes because the same types of people are making the same types of decisions.

A) Global B) Ethnocentric C) Polycentric D) Regiocentric Answer: B Difficulty: 1: Easy Chapter: 9 Skill: Concept LO: 9-2: To learn about the major staffing options for global operations and the factors involved in those choices AACSB: Application of knowledge

7 .

22) In ________approach, operations outside the home country are managed by individuals from the host country.

A) vertical integration B) horizontal integration C) ethnocentric staffing D) polycentric staffing Answer: D Difficulty: 1: Easy Chapter: 9 Skill: Concept LO: 9-2: To learn about the major staffing options for global operations and the factors involved in those choices AACSB: Application of knowledge 23) A(n) ________ manager champions the ways of foreign markets as comparable, if not more enlightened, than the practices of his or her parent company and home nation.

A) ethnocentric B) geocentric C) monocentric D) polycentric Answer: D Difficulty: 1: Easy Chapter: 9 Skill: Concept LO: 9-2: To learn about the major staffing options for global operations and the factors involved in those choices AACSB: Application of knowledge 24) Acme Electronics, an MNC, typically fills high-level foreign positions with host country nationals. Which staffing model is most likely used by Acme Electronics?

A) ethnocentric staffing model B) polycentric staffing model C) geocentric staffing model D) monocentric staffing model Answer: B Difficulty: 2: Moderate Chapter: 9 Skill: Concept LO: 9-2: To learn about the major staffing options for global operations and the factors involved in those choices AACSB: Application of knowledge

8 .

25) An important advantage of polycentric staffing is that it ________.

A) recreates local operations in the image of home-country operations B) eliminates the high cost of relocating expatriate managers and their families C) helps a company develop global managers who can adjust easily to any business environment D) employs managers from home who will look out for the company's interests Answer: B Difficulty: 2: Moderate Chapter: 9 Skill: Concept LO: 9-2: To learn about the major staffing options for global operations and the factors involved in those choices AACSB: Application of knowledge 26) A(n) ________ staffing approach is more likely to be effective when implementing a multinational strategy.

A) ethnocentric B) polycentric C) regional D) local Answer: B Difficulty: 2: Moderate Chapter: 9 Skill: Concept LO: 9-2: To learn about the major staffing options for global operations and the factors involved in those choices AACSB: Application of knowledge 27) Which staffing approach will most likely be effective when implementing a global strategy of "acting local"?

A) polycentric B) talent-intensive C) ethnocentric D) cost-intensive Answer: A Difficulty: 2: Moderate Chapter: 9 Skill: Concept LO: 9-2: To learn about the major staffing options for global operations and the factors involved in those choices AACSB: Application of knowledge; Diverse and multicultural work environments

9 .

28) Which of the following is an advantage of the polycentric staffing approach?

A) Home-country managers gain valuable overseas management experience.

B) Coordination between the subsidiary and the parent company is simplified.

C) Local managers tend to be instrumental in staving off or more effectively dealing with problems in sensitive political situations.

D) The local managers have no conflicting loyalties.

Answer: C Difficulty: 3: Challenging Chapter: 9 Skill: Concept LO: 9-2: To learn about the major staffing options for global operations and the factors involved in those choices AACSB: Diverse and multicultural work environments 29) Felix Department Store has over 900 stores in the United States and over 300 stores in Mexico and Canada. Felix has been particularly successful in Mexico, and the firm's executives believe Felix should expand into other Latin American countries. As a result, plans are underway for the construction of a new Felix store in Managua, Nicaragua. The construction, once started, is expected to be completed within a year, so staff selection needs to begin soon. Felix's executives are considering the idea of using parent-country nationals to manage the new store in Nicaragua. Which of the following, if true, best supports the argument that parent-country nationals should manage the Felix store in Managua, Nicaragua?

A) Felix encourages employees to participate in community outreach programs.

B) The top management of Felix is unlikely to endorse the recruitment of cheap, incompetent workers.

C) Felix wants to maintain close control of the Nicaragua store for at least three years.

D) Felix's managers in Nicaragua will choose what items to stock based on local needs and customs.

Answer: C Difficulty: 3: Challenging Chapter: 9 Skill: Critical Thinking LO: 9-2: To learn about the major staffing options for global operations and the factors involved in those choices AACSB: Reflective thinking

10 .

30) Felix Department Store has over 900 stores in the United States and over 300 stores in Mexico and Canada. Felix has been particularly successful in Mexico, and the firm's executives believe Felix should expand into other Latin American countries. As a result, plans are underway for the construction of a new Felix store in Managua, Nicaragua. The construction, once started, is expected to be completed within a year, so staff selection needs to begin soon. Felix's executives are considering the idea of using parent-country nationals to manage the new store in Nicaragua. Which of the following, if true, undermines the argument that parent-country nationals should manage the Felix store in Nicaragua?

A) Felix is implementing a strategy of global expansion by acting local.

B) Decision-making authority stems primarily from Felix's top management housed in the company's headquarter in the United States.

C) The top management of Felix is in favor of closely monitoring all of the company's subsidiaries.

D) Felix's HR department recently developed a new expatriation policy.

Answer: A Difficulty: 3: Challenging Chapter: 9 Skill: Critical Thinking LO: 9-2: To learn about the major staffing options for global operations and the factors involved in those choices AACSB: Reflective thinking 31) In which of the following staffing approaches, are the best managers recruited from within or outside of the company, regardless of nationality?

A) geocentric staffing approach B) global staffing approach C) ethnocentric staffing approach D) polycentric staffing approach Answer: B Difficulty: 1: Easy Chapter: 9 Skill: Concept LO: 9-2: To learn about the major staffing options for global operations and the factors involved in those choices AACSB: Diverse and multicultural work environments

11 .

32) A global staffing policy ________.

A) avoids recruiting third-country nationals B) relies primarily on local managers to fill key managerial positions abroad C) is overly in favor of filling key managerial positions with people from headquarters D) provides a greater pool of qualified and willing applicants from which to choose Answer: D Difficulty: 2: Moderate Chapter: 9 Skill: Concept LO: 9-2: To learn about the major staffing options for global operations and the factors involved in those choices AACSB: Diverse and multicultural work environments 33) Who, among the following, when used to manage subsidiaries, usually brings more cultural flexibility and adaptability to a situation?

A) parent-country nationals B) home-country nationals C) managers with minimal global exposure D) third-country nationals Answer: D Difficulty: 1: Easy Chapter: 9 Skill: Concept LO: 9-2: To learn about the major staffing options for global operations and the factors involved in those choices AACSB: Diverse and multicultural work environments 34) ________, when placed in key positions, are perceived by employees as acceptable compromises between headquarters and local managers.

A) Repatriates B) Parent-country nationals C) Home-country nationals D) Third-country nationals Answer: D Difficulty: 1: Easy Chapter: 9 Skill: Concept LO: 9-2: To learn about the major staffing options for global operations and the factors involved in those choices AACSB: Application of knowledge; Diverse and multicultural work environments

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35) Given the generally accepted consensus that staffing, along with structure and systems, must "fit" the desired strategy, firms desiring a truly worldwide posture should adopt a(n) ________.

A) global staffing approach B) geocentric staffing approach C) regiocentric staffing approach D) ethnocentric staffing approach Answer: A Difficulty: 2: Moderate Chapter: 9 Skill: Concept LO: 9-2: To learn about the major staffing options for global operations and the factors involved in those choices AACSB: Diverse and multicultural work environments 36) Which of the following terms is increasingly replacing the term "expatriate" due to the global staffing approach?

A) repatriate B) global manager C) transpatriate D) line manager Answer: C Difficulty: 1: Easy Chapter: 9 Skill: Concept LO: 9-2: To learn about the major staffing options for global operations and the factors involved in those choices AACSB: Diverse and multicultural work environments 37) Which of the following is true with regard to the global staffing approach?

A) As a rule, companies keen on "acting local" adopt a global staffing approach.

B) In the global staffing approach, key managerial positions are generally filled with people from headquarters—that is, parent-country nationals.

C) In a global staffing approach, local managers—that is, host-country nationals—are hired to fill key positions in their own country.

D) Recruiting third-country nationals is a common aspect of the global staffing strategy.

Answer: D Difficulty: 2: Moderate Chapter: 9 Skill: Concept LO: 9-2: To learn about the major staffing options for global operations and the factors involved in those choices AACSB: Diverse and multicultural work environments

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38) Which of the following is NOT a barrier for maintaining globalization momentum?

A) time and cost constraints B) conflicting host government requirements C) the scarce availability of staff D) having an international team Answer: D Difficulty: 2: Moderate Chapter: 9 Skill: Concept LO: 9-2: To learn about the major staffing options for global operations and the factors involved in those choices AACSB: Diverse and multicultural work environments; Interpersonal relations and teamwork 39) Recruiting managers from Latin America for a position in Argentina is an example of ________.

A) global staffing approach B) ethnocentric staffing approach C) regiocentric staffing approach D) polycentric staffing approach Answer: C Difficulty: 2: Moderate Chapter: 9 Skill: Application LO: 9-2: To learn about the major staffing options for global operations and the factors involved in those choices AACSB: Diverse and multicultural work environments 40) Which of the following will most likely produce a specific mix of parent-country nationals, home-country nationals, and third-country nationals, according to the needs of the company?

A) ethnocentric staffing approaches B) polycentric staffing approaches C) local staffing approaches D) regiocentric staffing approaches Answer: D Difficulty: 2: Moderate Chapter: 9 Skill: Concept LO: 9-2: To learn about the major staffing options for global operations and the factors involved in those choices AACSB: Diverse and multicultural work environments

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41) More recently, a staffing option known as ________ has been utilized to provide a linking pin between the company's headquarters and local host subsidiaries.

A) expatriates B) inpatriates C) transpatriates D) migrants Answer: B Difficulty: 1: Easy Chapter: 9 Skill: Concept LO: 9-2: To learn about the major staffing options for global operations and the factors involved in those choices AACSB: Diverse and multicultural work environments 42) A(n) ________ staffing approach usually results in a higher level of authority and decision making at headquarters compared to the polycentric approach.

A) Ethnocentric B) Global C) Geocentric D) Regiocentric Answer: A Difficulty: 2: Moderate Chapter: 9 Skill: Concept LO: 9-2: To learn about the major staffing options for global operations and the factors involved in those choices AACSB: Diverse and multicultural work environments 43) What are inpatriates?

A) managers with extensive domestic experience who are transferred to the organization's headquarters B) managers with extensive domestic experience who are transferred to an organization's most strategic foreign subsidiaries C) managers with extensive global experience who are transferred to the organization's headquarters D) managers with extensive global experience who are transferred to an organization's most strategic foreign subsidiaries Answer: C Difficulty: 2: Moderate Chapter: 9 Skill: Application LO: 9-2: To learn about the major staffing options for global operations and the factors involved in those choices AACSB: Application of knowledge

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44) Which of the following is an advantage of the staffing approach that employs parent-country nationals as top managers?

A) maintenance of close control over subsidiaries B) less-costly transferees C) facilitation of global multicultural teams D) high effectiveness of expatriates in foreign countries Answer: A Difficulty: 3: Challenging Chapter: 9 Skill: Concept LO: 9-2: To learn about the major staffing options for global operations and the factors involved in those choices AACSB: Diverse and multicultural work environments 45) Most MNCs tend to start their operations in a particular region by selecting primarily from their own pool of managers. Over time, and with increasing internationalization, they tend to move to a predominantly polycentric or regiocentric policy because of ________.

A) the lack of governmental support for hiring locals B) the inefficiencies of expatriate managers C) the poor performance of subsidiaries D) the greater costs of expatriate staffing Answer: D Difficulty: 3: Challenging Chapter: 9 Skill: Concept LO: 9-2: To learn about the major staffing options for global operations and the factors involved in those choices AACSB: Diverse and multicultural work environments 46) Historically, HRM directors selected potential expatriates on the basis of a candidate's ________.

A) interpersonal skills B) adaptation capabilities C) cross-cultural awareness D) domestic track records Answer: D Difficulty: 2: Moderate Chapter: 9 Skill: Concept LO: 9-3: To emphasize the need for managing the performance of expatriates through careful selection, performance management, and global teams AACSB: Diverse and multicultural work environments

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47) According to Mansour Javidan, which of the following is NOT a global mindset attribute that a successful expatriates possesses?

A) cognitive complexity B) psychological capital C) autocratic leadership qualities D) ability to build trusting relationships with local stakeholders Answer: C Difficulty: 2: Moderate Chapter: 9 Skill: Concept LO: 9-3: To emphasize the need for managing the performance of expatriates through careful selection, performance management, and global teams AACSB: Diverse and multicultural work environments 48) According to Mansour Javidan, the ability to function successfully in the host country through internal acceptance of different cultures and a strong desire to learn from new experiences is termed ________.

A) cognitive complexity B) psychological capital C) social capital D) intellectual capital Answer: B Difficulty: 1: Easy Chapter: 9 Skill: Concept LO: 9-3: To emphasize the need for managing the performance of expatriates through careful selection, performance management, and global teams AACSB: Diverse and multicultural work environments 49) According to Tye and Chen, which of the following characteristics has the greatest predictive value of determining expatriate success?

A) gender B) stress tolerance C) international experiences D) domestic work experience Answer: B Difficulty: 2: Moderate Chapter: 9 Skill: Concept LO: 9-3: To emphasize the need for managing the performance of expatriates through careful selection, performance management, and global teams AACSB: Diverse and multicultural work environments

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50) Expatriate failure, defined in broad terms, refers to the ________.

A) manager's premature return home due to poor job performance B) manager's miscues, which give competitors a market advantage C) unintentional dilution of the company's core competency D) poor expatriate selection procedures of the MNE Answer: D Difficulty: 2: Moderate Chapter: 9 Skill: Concept LO: 9-3: To emphasize the need for managing the performance of expatriates through careful selection, performance management, and global teams AACSB: Diverse and multicultural work environments 51) ________ is the early return of an expatriate manager to the home country because of an inability to perform in the overseas assignment.

A) Culture shock B) Expatriate return C) Expatriate failure D) Managerial incompetence Answer: C Difficulty: 2: Moderate Chapter: 9 Skill: Concept LO: 9-3: To emphasize the need for managing the performance of expatriates through careful selection, performance management, and global teams AACSB: Diverse and multicultural work environments 52) Which of the following most likely occurs as a result of expatriate failure?

A) culture shock B) diminished careers C) acculturation D) knowledge sharing Answer: B Difficulty: 2: Moderate Chapter: 9 Skill: Concept LO: 9-3: To emphasize the need for managing the performance of expatriates through careful selection, performance management, and global teams AACSB: Diverse and multicultural work environments

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53) Which of the following is the LEAST critical area of expatriate preparation?

A) cultural training B) language instruction C) technical training D) familiarity with everyday matters Answer: C Difficulty: 2: Moderate Chapter: 9 Skill: Concept LO: 9-3: To emphasize the need for managing the performance of expatriates through careful selection, performance management, and global teams AACSB: Diverse and multicultural work environments 54) A(n) ________ training technique exposes trainees to the kinds of situations they are likely to encounter, which are critical to successful interactions.

A) area studies B) field experiences C) language trainings D) host country program Answer: D Difficulty: 2: Moderate Chapter: 9 Skill: Concept LO: 9-3: To emphasize the need for managing the performance of expatriates through careful selection, performance management, and global teams AACSB: Diverse and multicultural work environments 55) In the global stage of a firm's globalization, ________.

A) training is focused on local culture and interpersonal skills B) the need for training is virtually nonexistent C) host-country nationals are trained to understand parent-country products and policies D) the need for training is high Answer: D Difficulty: 2: Moderate Chapter: 9 Skill: Concept LO: 9-3: To emphasize the need for managing the performance of expatriates through careful selection, performance management, and global teams AACSB: Application of knowledge

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56) ________ is the first stage in a comprehensive plan for developing expatriates.

A) Assessing development and support needs B) Integration of the value added to the firm C) Development of a contract D) Problem recognition Answer: D Difficulty: 2: Moderate Chapter: 9 Skill: Concept LO: 9-4: To appreciate the necessity of cross-cultural training, job-specific training techniques, and appropriate compensation for expatriate performance AACSB: Diverse and multicultural work environments 57) Which of the following is the final stage of the IHRM process that is used to maximize the effectiveness of expatriate assignments?

A) selection of expatriate B) debriefing expatriate and family to improve IHRM process C) development of contract D) assessment of development and support needs Answer: B Difficulty: 2: Moderate Chapter: 9 Skill: Concept LO: 9-4: To appreciate the necessity of cross-cultural training, job-specific training techniques, and appropriate compensation for expatriate performance AACSB: Diverse and multicultural work environments 58) The goal of cross-cultural training is to ease the expatriate's adjustment to the new environment by reducing ________.

A) culture shock B) power distance C) social distance D) cultural diversity Answer: A Difficulty: 1: Easy Chapter: 9 Skill: Concept LO: 9-4: To appreciate the necessity of cross-cultural training, job-specific training techniques, and appropriate compensation for expatriate performance AACSB: Diverse and multicultural work environments

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59) A state of disorientation and anxiety that results from not knowing how to behave in an unfamiliar culture is called ________.

A) culture shock B) enculturation C) cultural contingency D) acculturation Answer: A Difficulty: 1: Easy Chapter: 9 Skill: Concept LO: 9-4: To appreciate the necessity of cross-cultural training, job-specific training techniques, and appropriate compensation for expatriate performance AACSB: Diverse and multicultural work environments 60) Which of the following is most likely to occur in the honeymoon stage of culture shock?

A) new arrivals are fascinated by aspects of the new culture B) individuals become annoyed by unpredictable quirks of the new culture C) emotions hit rock bottom for visitors D) visitors better understand and appreciate local customs and behavior Answer: A Difficulty: 1: Easy Chapter: 9 Skill: Concept LO: 9-4: To appreciate the necessity of cross-cultural training, job-specific training techniques, and appropriate compensation for expatriate performance AACSB: Diverse and multicultural work environments 61) William has been transferred to an office in Japan for a year. In his first few weeks, he began to feel confused and rejected as well as a sort of mourning for home. William is experiencing ________.

A) expatriate failure B) repatriation C) acculturation D) culture shock Answer: D Difficulty: 2: Moderate Chapter: 9 Skill: Concept LO: 9-4: To appreciate the necessity of cross-cultural training, job-specific training techniques, and appropriate compensation for expatriate performance AACSB: Diverse and multicultural work environments

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62) Which of the following examples is helping with integration of an expatriate (Mr. Jurgen von Hagen) of a German multinational enterprise at their U.S. subsidiary?

A) talking mostly about the headquarters B) learning French and Spanish C) maintaining low degree of professionalism at the office D) trying to adapt to the local culture Answer: D Difficulty: 1: Easy Chapter: 9 Skill: Application LO: 9-4: To appreciate the necessity of cross-cultural training, job-specific training techniques, and appropriate compensation for expatriate performance AACSB: Application of knowledge 63) According to Oberg, which of the following is the final stage of culture shock?

A) honeymoon B) biculturalism C) gradual adjustment D) irritation and hostility Answer: B Difficulty: 1: Easy Chapter: 9 Skill: Concept LO: 9-4: To appreciate the necessity of cross-cultural training, job-specific training techniques, and appropriate compensation for expatriate performance AACSB: Diverse and multicultural work environments 64) As described by Oberg, which of the following is most likely a characteristic of the irritation and hostility stage of culture shock?

A) excitement B) homesickness C) appreciation of local practices D) positive attitudes and expectations Answer: B Difficulty: 2: Moderate Chapter: 9 Skill: Concept LO: 9-4: To appreciate the necessity of cross-cultural training, job-specific training techniques, and appropriate compensation for expatriate performance AACSB: Diverse and multicultural work environments

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65) As described by Oberg, in the ________ stage of culture shock the expatriate and his or her family members come to understand and predict patterns of behavior, use the language, deal with daily activities, and accept their new life.

A) honeymoon B) biculturalism C) gradual adjustment D) irritation and hostility Answer: C Difficulty: 2: Moderate Chapter: 9 Skill: Concept LO: 9-4: To appreciate the necessity of cross-cultural training, job-specific training techniques, and appropriate compensation for expatriate performance AACSB: Diverse and multicultural work environments 66) As described by Oberg, ________ refers to the stage in culture shock in which the manager and family members grow to accept and appreciate local people and practices, and are able to function effectively in two cultures.

A) gradual adjustment B) honeymoon C) biculturalism D) irritation and hostility Answer: C Difficulty: 2: Moderate Chapter: 9 Skill: Concept LO: 9-4: To appreciate the necessity of cross-cultural training, job-specific training techniques, and appropriate compensation for expatriate performance AACSB: Diverse and multicultural work environments 67) Which of the following best summarizes the goal of cross-cultural awareness training for expatriates?

A) It enables expatriates to cope with reverse-culture shock.

B) It enables expatriates to share knowledge with host-country nationals more effectively.

C) It enables expatriates to significantly upgrade their technical skills.

D) It enables expatriates to effectively communicate with local customers and employees and be sensitive to the host-country's culture.

Answer: D Difficulty: 2: Moderate Chapter: 9 Skill: Concept LO: 9-4: To appreciate the necessity of cross-cultural training, job-specific training techniques, and appropriate compensation for expatriate performance AACSB: Application of knowledge

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68) Why do international HR managers most likely need to adjust hiring, firing, and training methods on a country-by-country basis?

A) ensure compensation equity B) comply with international laws C) adjust for national and cultural differences D) meet requirements of joint venture contracts Answer: C Difficulty: 2: Moderate Chapter: 9 Skill: Concept LO: 9-4: To appreciate the necessity of cross-cultural training, job-specific training techniques, and appropriate compensation for expatriate performance AACSB: Diverse and multicultural work environments 69) Training for host-country nationals during the export stage of globalization will most likely focus on ________.

A) parent-country products B) global conduct policies C) product and service systems D) production and service procedures Answer: A Difficulty: 2: Moderate Chapter: 9 Skill: Concept LO: 9-4: To appreciate the necessity of cross-cultural training, job-specific training techniques, and appropriate compensation for expatriate performance AACSB: Application of knowledge 70) An appropriate compensation and benefits package is most likely to ________.

A) increase the rate of attrition significantly B) lower the importance of training C) lower the overall organizational efficiency in the short-term D) motivate employees Answer: D Difficulty: 1: Easy Chapter: 9 Skill: Concept LO: 9-4: To appreciate the necessity of cross-cultural training, job-specific training techniques, and appropriate compensation for expatriate performance AACSB: Application of knowledge

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71) Which of the following is a factor that facilitates integration of expatriate staff with local staff?

A) withholding useful information B) having a headquarters mentality C) speaking the local language D) demonstrating autocratic behavior Answer: C Difficulty: 1: Easy Chapter: 9 Skill: Concept LO: 9-4: To appreciate the necessity of cross-cultural training, job-specific training techniques, and appropriate compensation for expatriate performance AACSB: Diverse and multicultural work environments 72) Which of the following factors will facilitate integration of expatriate staff with local staff?

A) knowledge sharing B) headquarters mentality C) Superior and autocratic behavior D) Spouse and family problems Answer: A Difficulty: 3: Challenging Chapter: 9 Skill: Concept LO: 9-4: To appreciate the necessity of cross-cultural training, job-specific training techniques, and appropriate compensation for expatriate performance AACSB: Diverse and multicultural work environments 73) Which of the following methods is used to reduce the overall costs of expatriate assignments?

A) standardizing global competition B) encouraging expatriates to visit their home country frequently C) extending the expatriate's tour D) implementing global benefits policies Answer: C Difficulty: 3: Challenging Chapter: 9 Skill: Concept LO: 9-4: To appreciate the necessity of cross-cultural training, job-specific training techniques, and appropriate compensation for expatriate performance AACSB: Analytical thinking

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74) The concept of "keeping the expatriate whole" in terms of compensation most likely means ensuring that the expatriate's ________.

A) family is prepared for the overseas assignment B) health insurance coverage is globally accepted C) foreign and domestic taxes are paid in a timely manner D) standard of living is at par with that of colleagues at home Answer: D Difficulty: 3: Challenging Chapter: 9 Skill: Concept LO: 9-4: To appreciate the necessity of cross-cultural training, job-specific training techniques, and appropriate compensation for expatriate performance AACSB: Diverse and multicultural work environments 75) The ________ is often used to equalize the standard of living between the host country and the home country, and to add some compensation for inconvenience or qualitative loss.

A) localization approach B) balance sheet approach C) relocation strategy D) going-rate approach Answer: B Difficulty: 2: Moderate Chapter: 9 Skill: Concept LO: 9-4: To appreciate the necessity of cross-cultural training, job-specific training techniques, and appropriate compensation for expatriate performance AACSB: Analytical thinking 76) Which of the following is correct regarding expatriates?

A) An example of an expatriate is a U.S. citizen who works at a Mexican subsidiary of a Canadian multinational, but commutes back to the US every day.

B) An example of an expatriate is a Canadian citizen who works in the U.S. at a Canadian subsidiary of a US multinational.

C) An example of an expatriate is a US citizen who works at a Mexican subsidiary of a US multinational.

D) An example of an expatriate is a US citizen who works at a Mexican subsidiary of a Canadian multinational.

Answer: B Difficulty: 2: Moderate Chapter: 9 Skill: Application LO: 9-4: To appreciate the necessity of cross-cultural training, job-specific training techniques, and appropriate compensation for expatriate performance AACSB: Application of knowledge

26 .

77) Relocation expense is an example of ________.

A) a salary B) a tax C) an allowance D) a benefit Answer: C Difficulty: 1: Easy Chapter: 9 Skill: Concept LO: 9-4: To appreciate the necessity of cross-cultural training, job-specific training techniques, and appropriate compensation for expatriate performance AACSB: Application of knowledge 78) The ________ pays the expatriate the going rate for similar positions in the host country, plus whatever allowances and benefits for the assignment that the manager negotiates.

A) localization approach B) privatization approach C) balance sheet approach D) home-based approach Answer: A Difficulty: 1: Easy Chapter: 9 Skill: Concept LO: 9-4: To appreciate the necessity of cross-cultural training, job-specific training techniques, and appropriate compensation for expatriate performance AACSB: Analytical thinking 79) With the increasing number of companies that operate around the world and assign and move personnel from one country to another, ________ has become exceedingly complex.

A) employing third-country nationals B) designing equitable pay scales C) employing local talent D) convincing employees to take up foreign assignments Answer: B Difficulty: 2: Moderate Chapter: 9 Skill: Concept LO: 9-4: To appreciate the necessity of cross-cultural training, job-specific training techniques, and appropriate compensation for expatriate performance AACSB: Diverse and multicultural work environments

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80) Which of the following most likely occurs when a manager is transferred to another part of the country where there are significant cultural differences?

A) subculture shock B) culture shock C) expatriation D) repatriation Answer: A Difficulty: 1: Easy Chapter: 9 Skill: Concept LO: 9-4: To appreciate the necessity of cross-cultural training, job-specific training techniques, and appropriate compensation for expatriate performance AACSB: Diverse and multicultural work environments 81) Joan Kerry, an American national, worked as a senior manager in her firm's headquarters in New Jersey. When her firm opened a new office in San Francisco, she was transferred to California. Soon, she started feeling like an immigrant in her own country owing to the differences in attitudes and lifestyle between New Jersey and California. Joan is most likely experiencing ________.

A) segregation B) subculture shock C) social distance D) power distance Answer: B Difficulty: 2: Moderate Chapter: 9 Skill: Application LO: 9-4: To appreciate the necessity of cross-cultural training, job-specific training techniques, and appropriate compensation for expatriate performance AACSB: Analytical thinking 82) Which of the following offers insight into a host country's political, legal, economic, and social institutions as a way of enhancing environmental briefings?

A) language training B) field experience C) sensitivity training D) cultural orientation Answer: D Difficulty: 2: Moderate Chapter: 9 Skill: Concept LO: 9-5: To discuss the role of host country managers and the need for their training and appropriate compensation packages AACSB: Diverse and multicultural work environments

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83) Which of the following refers to a core concept of the Toyota Way? A) low emphasis on organizational learning B) ownership of problems and visibility C) hiding problems and difficulties from authorities D) high emphasis on individual achievement Answer: B Difficulty: 3: Challenging Chapter: 9 Skill: Concept LO: 9-5: To discuss the role of host country managers and the need for their training and appropriate compensation packages AACSB: Application of knowledge 84) Managerial training in ________ is particularly critical for firms in new economy and emerging markets.

A) sales and marketing B) branding C) information and communication technologies D) nano technology Answer: C Difficulty: 2: Moderate Chapter: 9 Skill: Concept LO: 9-5: To discuss the role of host country managers and the need for their training and appropriate compensation packages AACSB: Information technology 85) Which of the following refers to a training priority for e-business development?

A) addressing security and privacy concerns B) training personnel in soft skills C) training personnel in talent management D) devising a sustainable revenue model Answer: A Difficulty: 2: Moderate Chapter: 9 Skill: Concept LO: 9-5: To discuss the role of host country managers and the need for their training and appropriate compensation packages AACSB: Information technology

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86) Which of the following is true with regard to training and compensating host-country nationals?

A) HCNs are rarely offered training in global business and Internet technology within their home corporations.

B) The traditional lifetime employment and guaranteed tidy pension of the East are being increasingly adopted by the West.

C) Many multinationals wish to train their employees to bridge the divide between the firm's successful corporate culture and practices, and the local culture and work practices.

D) In contemporary times, MNCs rarely have a global pay strategy in place.

Answer: C Difficulty: 2: Moderate Chapter: 9 Skill: Concept LO: 9-5: To discuss the role of host country managers and the need for their training and appropriate compensation packages AACSB: Diverse and multicultural work environments 87) The need to outsource employees is a complex issue for international human resource (IHR) managers as they seek to support strategic mandates.

Answer: TRUE Difficulty: 1: Easy Chapter: 9 Skill: Concept LO: 9-1: To understand the strategic importance to the firm of the IHRM function and its various responsibilities AACSB: Diverse and multicultural work environments 88) Outsourcing skilled and professional jobs have implications for their human resource practices at home and not around the world.

Answer: TRUE Difficulty: 1: Easy Chapter: 9 Skill: Concept LO: 9-1: To understand the strategic importance to the firm of the IHRM function and its various responsibilities AACSB: Diverse and multicultural work environments 89) Challenges for companies around the world include growing workforce mobility and the increasing trend of outsourcing service and professional jobs, which have now joined manufacturing jobs in the category of boundary less human capital.

Answer: TRUE Difficulty: 1: Easy Chapter: 9 Skill: Concept LO: 9-1: To understand the strategic importance to the firm of the IHRM function and its various responsibilities AACSB: Diverse and multicultural work environments 30 .

90) IHRM is being recognized as a minor determinant of success or failure in international business.

Answer: FALSE Difficulty: 1: Easy Chapter: 9 Skill: Concept LO: 9-1: To understand the strategic importance to the firm of the IHRM function and its various responsibilities AACSB: Diverse and multicultural work environments 91) International human resource management is a vital component of implementing global strategy.

Answer: TRUE Difficulty: 1: Easy Chapter: 9 Skill: Concept LO: 9-1: To understand the strategic importance to the firm of the IHRM function and its various responsibilities AACSB: Application of knowledge 92) Building global corporate cultures and staffing organizations with global leaders are some of the major challenges faced by the HR function in the global arena.

Answer: TRUE Difficulty: 2: Moderate Chapter: 9 Skill: Concept LO: 9-1: To understand the strategic importance to the firm of the IHRM function and its various responsibilities AACSB: Diverse and multicultural work environments 93) Host-country nationals are employees assigned to key positions in countries other than their own.

Answer: FALSE Difficulty: 1: Easy Chapter: 9 Skill: Concept LO: 9-2: To learn about the major staffing options for global operations and the factors involved in those choices AACSB: Diverse and multicultural work environments

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94) When a company is at the internationalization stage of strategic expansion, and has a centralized structure, it will likely use a polycentric staffing approach to fill key managerial positions.

Answer: FALSE Difficulty: 2: Moderate Chapter: 9 Skill: Concept LO: 9-2: To learn about the major staffing options for global operations and the factors involved in those choices AACSB: Diverse and multicultural work environments 95) Companies use ethnocentric staffing to re-create local operations in the image of homecountry operations.

Answer: TRUE Difficulty: 1: Easy Chapter: 9 Skill: Concept LO: 9-2: To learn about the major staffing options for global operations and the factors involved in those choices AACSB: Diverse and multicultural work environments 96) Companies using a polycentric staffing approach, avoid using parent-country nationals to fill in key managerial positions.

Answer: TRUE Difficulty: 1: Easy Chapter: 9 Skill: Concept LO: 9-2: To learn about the major staffing options for global operations and the factors involved in those choices AACSB: Diverse and multicultural work environments 97) A polycentric recruiting approach enables a company to take advantage of its worldwide pool of management skill.

Answer: TRUE Difficulty: 1: Easy Chapter: 9 Skill: Concept LO: 9-2: To learn about the major staffing options for global operations and the factors involved in those choices AACSB: Diverse and multicultural work environments

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98) In ethnocentric staffing, operations outside the home country are managed by individuals from the host country.

Answer: FALSE Difficulty: 1: Easy Chapter: 9 Skill: Concept LO: 9-2: To learn about the major staffing options for global operations and the factors involved in those choices AACSB: Diverse and multicultural work environments 99) The major drawback of polycentric staffing is the potential for losing control of the hostcountry operation.

Answer: TRUE Difficulty: 1: Easy Chapter: 9 Skill: Concept LO: 9-2: To learn about the major staffing options for global operations and the factors involved in those choices AACSB: Diverse and multicultural work environments 100) In geocentric staffing, operations outside the home country are managed by the bestqualified individuals, regardless of their nationality.

Answer: TRUE Difficulty: 1: Easy Chapter: 9 Skill: Concept LO: 9-2: To learn about the major staffing options for global operations and the factors involved in those choices AACSB: Diverse and multicultural work environments 101) An ethnocentric policy can create barriers for the host-country office.

Answer: TRUE Difficulty: 1: Easy Chapter: 9 Skill: Concept LO: 9-2: To learn about the major staffing options for global operations and the factors involved in those choices AACSB: Diverse and multicultural work environments 102) Inpatriate managers can facilitate multicultural management teams in global organizations.

Answer: TRUE Difficulty: 1: Easy Chapter: 9 Skill: Concept LO: 9-2: To learn about the major staffing options for global operations and the factors involved in those choices AACSB: Diverse and multicultural work environments 33 .

103) With an ethnocentric staffing approach, host-country nationals are hired to fill key positions in their own country.

Answer: TRUE Difficulty: 2: Moderate Chapter: 9 Skill: Concept LO: 9-2: To learn about the major staffing options for global operations and the factors involved in those choices AACSB: Diverse and multicultural work environments 104) Host-country nationals are more likely to be accepted by people both inside and outside the subsidiary, and they provide role models for other upwardly mobile personnel.

Answer: TRUE Difficulty: 2: Moderate Chapter: 9 Skill: Concept LO: 9-2: To learn about the major staffing options for global operations and the factors involved in those choices AACSB: Diverse and multicultural work environments 105) Local managers are, by and large, effective in dealing with problems in sensitive political situations.

Answer: TRUE Difficulty: 1: Easy Chapter: 9 Skill: Concept LO: 9-2: To learn about the major staffing options for global operations and the factors involved in those choices AACSB: Diverse and multicultural work environments 106) One disadvantage of a polycentric staffing policy is the difficulty of coordinating activities and goals between the subsidiary and the parent company, including the potentially conflicting loyalties of the local manager.

Answer: TRUE Difficulty: 1: Easy Chapter: 9 Skill: Concept LO: 9-2: To learn about the major staffing options for global operations and the factors involved in those choices AACSB: Diverse and multicultural work environments

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107) The term "transpatriate" is increasingly replacing expatriate.

Answer: TRUE Difficulty: 1: Easy Chapter: 9 Skill: Concept LO: 9-2: To learn about the major staffing options for global operations and the factors involved in those choices AACSB: Diverse and multicultural work environments 108) Expatriates are managers with global experience who are transferred to the organization's headquarters country so that their overseas business and cultural experience and contacts can facilitate interactions among the country's far-flung operations.

Answer: FALSE Difficulty: 1: Easy Chapter: 9 Skill: Concept LO: 9-2: To learn about the major staffing options for global operations and the factors involved in those choices AACSB: Diverse and multicultural work environments 109) A staffing option known as inpatriates has been used to provide a linking pin between the company's headquarters and local host subsidiaries.

Answer: TRUE Difficulty: 1: Easy Chapter: 9 Skill: Concept LO: 9-2: To learn about the major staffing options for global operations and the factors involved in those choices AACSB: Diverse and multicultural work environments 110) In the global staffing approach, the best managers are recruited from within or outside of the company, regardless of nationality.

Answer: TRUE Difficulty: 1: Easy Chapter: 9 Skill: Concept LO: 9-2: To learn about the major staffing options for global operations and the factors involved in those choices AACSB: Diverse and multicultural work environments

35 .

111) In a polycentric staffing approach, recruiting is done on a regional basis and can produce a specific mix of PCNs, HCNs, and TCNs, according to the needs of the company or the product strategy.

Answer: FALSE Difficulty: 1: Easy Chapter: 9 Skill: Concept LO: 9-2: To learn about the major staffing options for global operations and the factors involved in those choices AACSB: Diverse and multicultural work environments 112) Expatriates are managers with global experience who are transferred to the organization's headquarters country, so their overseas business and cultural experience and contacts can facilitate interactions among the country's far-flung operations.

Answer: FALSE Difficulty: 1: Easy Chapter: 9 Skill: Concept LO: 9-3: To emphasize the need for managing the performance of expatriates through careful selection, performance management, and global teams AACSB: Diverse and multicultural work environments 113) Local managers can provide communication of strategic goals and change processes, and provide continuity among revolving expatriates and host nationals.

Answer: FALSE Difficulty: 2: Moderate Chapter: 9 Skill: Concept LO: 9-3: To emphasize the need for managing the performance of expatriates through careful selection, performance management, and global teams AACSB: Diverse and multicultural work environments 114) Alienation or lack of support from headquarters is one of the major causes of expatriate failure.

Answer: TRUE Difficulty: 1: Easy Chapter: 9 Skill: Concept LO: 9-3: To emphasize the need for managing the performance of expatriates through careful selection, performance management, and global teams AACSB: Analytical thinking

36 .

115) Culture shock refers to a state of disorientation and anxiety about not knowing how to behave in an unfamiliar culture.

Answer: TRUE Difficulty: 1: Easy Chapter: 9 Skill: Concept LO: 9-4: To appreciate the necessity of cross-cultural training, job-specific training techniques, and appropriate compensation for expatriate performance AACSB: Diverse and multicultural work environments 116) To ensure that expatriates do not lose out through their overseas assignment, the balance sheet approach is often used to equalize the standard of living between the host country and the home country.

Answer: TRUE Difficulty: 1: Easy Chapter: 9 Skill: Concept LO: 9-4: To appreciate the necessity of cross-cultural training, job-specific training techniques, and appropriate compensation for expatriate performance AACSB: Diverse and multicultural work environments 117) Training programs designed for preparing employees for assignments abroad consist of area studies, practical information, and cross-cultural awareness.

Answer: TRUE Difficulty: 1: Easy Chapter: 9 Skill: Concept LO: 9-4: To appreciate the necessity of cross-cultural training, job-specific training techniques, and appropriate compensation for expatriate performance AACSB: Diverse and multicultural work environments 118) Cross-cultural awareness training tends to lower intercultural sensitivity and effectiveness.

Answer: FALSE Difficulty: 1: Easy Chapter: 9 Skill: Concept LO: 9-4: To appreciate the necessity of cross-cultural training, job-specific training techniques, and appropriate compensation for expatriate performance AACSB: Diverse and multicultural work environments

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119) Many multinationals, in particular "chains," wish to train their local managers and workers to bridge the divide between the firm's successful corporate culture and practices, and the local culture and work practices.

Answer: TRUE Difficulty: 1: Easy Chapter: 9 Skill: Concept LO: 9-5: To discuss the role of host country managers and the need for their training and appropriate compensation packages AACSB: Diverse and multicultural work environments 120) Briefly discuss the interdependence of strategy, structure, and staffing.

Answer: The interdependence of strategy, structure, and staffing is particularly worth noting.

Ideally, the desired strategy of the firm should dictate the organizational structure and staffing modes considered most effective for implementing that strategy. In reality, however, there is usually considerable interdependence among those functions. Existing structural constraints often affect strategic decisions; similarly, staffing constraints or unique sets of competencies in management come into play in organizational and sometimes strategic decisions. It is thus important to achieve a system of fits, among those variables, that facilitates strategic implementation.

Difficulty: 2: Moderate Chapter: 9 Skill: Concept LO: 9-1: To understand the strategic importance to the firm of the IHRM function and its various responsibilities AACSB: Application of knowledge

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121) Briefly define the ethnocentric, polycentric, regiocentric, and global staffing approaches.

Answer: Ethnocentric staffing approach is used to fill key managerial positions with people from the headquarters—that is, parent-country nationals (PCNs).

With a polycentric staffing approach, local managers—host-country nationals (HCNs)—are hired to fill key positions in their own country. This approach is more likely to be effective when implementing a multinational strategy.

In a regiocentric staffing approach, recruiting is done on a regional basis—say, within Latin America for a position in Chile. This staffing approach can produce a specific mix of PCNs, HCNs, and TCNs, according to the needs of the company or the product strategy.

In the global staffing approach, the best managers are recruited from within or outside of the company, regardless of nationality. This practice—recruiting third country nationals (TCNs)— has been used for some time by many European multinationals.

Difficulty: 1: Easy Chapter: 9 Skill: Concept LO: 9-2: To learn about the major staffing options for global operations and the factors involved in those choices AACSB: Application of knowledge; Diverse and multicultural work environments 122) What are the advantages of the global staffing approach?

Answer: A global staffing approach has several important advantages. First, this policy provides a greater pool of qualified and willing applicants from which to choose, which in time results in further development of a global executive cadre.

Second, where third country nationals are used to manage subsidiaries, they usually bring more cultural flexibility and adaptability to a situation, as well as bilingual or multilingual skills, than parent-country nationals, especially if they are from a similar cultural background as the hostcountry coworkers and are accustomed to moving around.

Third, it can be more cost-effective to transfer and pay managers from some countries than from others because their pay scale and benefits packages are lower. Indeed, those firms with a truly global staffing orientation are phasing out the entire ethnocentric concept of a home or host country.

Overall, firms still tend to use expatriates in key positions in host countries that have a less familiar culture and also in less-developed economies.

Difficulty: 2: Moderate Chapter: 9 Skill: Concept LO: 9-2: To learn about the major staffing options for global operations and the factors involved in those choices AACSB: Application of knowledge; Diverse and multicultural work environments

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123) Why do most firms shift from ethnocentric staffing to polycentric or regiocentric staffing methods?

Answer: Most MNCs tend to start their operations in a particular region by selecting primarily from their own pool of managers. Over time, and with increasing internationalization, they tend to move to a predominantly polycentric or regiocentric policy because of (1) increasing pressure (explicit or implicit) from local governments to hire locals (or sometimes legal restraints on the use of expatriates) and (2) the greater costs of expatriate staffing, particularly when the company has to pay taxes for the parent-company employee in both countries. In addition, in recent years, MNCs have noted an improvement in the level of managerial and technical competence in many countries, negating the chief reason for using a primarily ethnocentric policy in the past.

Difficulty: 3: Challenging Chapter: 9 Skill: Concept LO: 9-2: To learn about the major staffing options for global operations and the factors involved in those choices AACSB: Diverse and multicultural work environments 124) What are the major causes of expatriate failure?

Answer: The following is a synthesis of the factors frequently mentioned by researchers and firms as the major causes of expatriate failure: 1. Selection based on headquarters criteria rather than assignment needs 2. Inadequate preparation, training, and orientation prior to assignment 3. Alienation or lack of support from headquarters 4. Inability to adapt to local culture and working environment 5. Problems with spouse and children–poor adaptation, family unhappiness 6. Insufficient compensation and financial support 7. Poor programs for career support and repatriation Difficulty: 3: Challenging Chapter: 9 Skill: Concept LO: 9-3: To emphasize the need for managing the performance of expatriates through careful selection, performance management, and global teams AACSB: Diverse and multicultural work environments 125) What is the difference between culture shock and subculture shock?

Answer: Culture shock is a state of disorientation and anxiety about not knowing how to behave in an unfamiliar culture. It occurs when the individual first begins working in a new culture. Subculture shock occurs when a manager is transferred to another part of the country where there are perceived cultural differences between majority and minority cultures. The shock comes from feeling like an "immigrant" in one's own country and being unprepared for such differences.

Difficulty: 2: Moderate Chapter: 9 Skill: Concept LO: 9-4: To appreciate the necessity of cross-cultural training, job-specific training techniques, and appropriate compensation for expatriate performance AACSB: Diverse and multicultural work environments 40 .

126) What are the different stages of culture shock as described by Oberg?

Answer: Culture shock usually progresses through four stages, as described by Oberg: (1) honeymoon, when positive attitudes and expectations, excitement, and a tourist feeling prevail (which may last up to several weeks); (2) irritation and hostility, the crisis stage when cultural differences result in problems at work, at home, and in daily living–expatriates and family members feel homesick and disoriented, lashing out at everyone (many never get past this stage); (3) gradual adjustment, a period of recovery in which the "patient" gradually becomes able to understand and predict patterns of behavior, use the language, deal with daily activities, and the family starts to accept their new life; and (4) biculturalism, the stage in which the manager and family members grow to accept and appreciate local people and practices, and are able to function effectively in two cultures.

Difficulty: 3: Challenging Chapter: 9 Skill: Concept LO: 9-4: To appreciate the necessity of cross-cultural training, job-specific training techniques, and appropriate compensation for expatriate performance AACSB: Diverse and multicultural work environments 127) What are the factors that facilitate and hinder the integration of expatriate staff with local staff?

Answer: Factors that facilitate integration of expatriate staff with local staff are: 1. Relationship-building 2. Speaking the local language 3. Knowledge sharing 4. Cultural adaptability/flexibility 5. Respect 6. Overseas experience 7. Develop local value-added from venture 8. Encourage local innovation Factors that hinder integration of expatriate staff with local staff are: 1. Not using team concept 2. Not learning local language 3. Withholding useful information 4. Spouse and family problems in adjusting 5. Superior and autocratic behavior 6. Limited time in assignment 7. Headquarters mentality 8. Dominate from head office Difficulty: 2: Moderate Chapter: 9 Skill: Concept LO: 9-4: To appreciate the necessity of cross-cultural training, job-specific training techniques, and appropriate compensation for expatriate performance AACSB: Diverse and multicultural work environments 41 .

128) Why is expatriate compensation complicated? What are some of the universal best practices regarding employee compensation?

Answer: Designing and maintaining an appropriate compensation package is more complex than it would seem because of the need to consider and reconcile parent- and host-country financial, legal, and customary practices. The problem is that although little variation in typical executive salaries at the level of base compensation exists around the world, a wide variation in net spendable income is often present. Universal best practices include the idea that there should be a reduced emphasis on seniority and that benefits should comprise an important part of a compensation package.

Difficulty: 3: Challenging Chapter: 9 Skill: Concept LO: 9-4: To appreciate the necessity of cross-cultural training, job-specific training techniques, and appropriate compensation for expatriate performance AACSB: Diverse and multicultural work environments 129) Explain the balance sheet approach to international compensation packages. Why is this approach so important?

Answer: The balance sheet approach is a compensation techniques that strives to equalize the pay package an expatriate manager receives while working abroad in comparison with what he/she would receive at home. Standard of living is a key aspect of the balance. Without balanced compensation problems, many companies would lack adequate incentives for sending people abroad. It is often used to equalize the standard of living between the host country and the home country and add some compensation for inconvenience or qualitative loss.

Difficulty: 2: Moderate Chapter: 9 Skill: Concept LO: 9-4: To appreciate the necessity of cross-cultural training, job-specific training techniques, and appropriate compensation for expatriate performance AACSB: Diverse and multicultural work environments

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130) Describe Tung's five training techniques for assisting expatriates in the adjustment process.

How can training be integrated with global orientation?

Answer: Many training techniques are available to assist overseas assignees in the adjustment process. These techniques are classified by Tung as: (1) area studies, that is, documentary programs about the country's geography, economics, sociopolitical history, and so forth; (2) culture assimilators, who expose trainees to the kinds of situations they are likely to encounter that are critical to successful interactions; (3) language training; (4) sensitivity training; and (5) field experiences—exposure to people from other cultures within the trainee's own country.

It is important to remember that training programs, like staffing approaches, should be designed with the company's strategy in mind. Although it is probably impractical to break down those programs into a lot of variations, it is feasible to at least consider the relative level or stage of globalization that the firm has reached, because obvious major differences would be appropriate—for example, from the initial export stage to the full global stage. It is noteworthy, for example, that the training of host-country nationals for a global firm has a considerably higher level of scope and rigor than that for the other stages, and borders on the standards for the firm's expatriates.

As a further area for managerial preparation for global orientation—in addition to training plans for expatriates and for HCNs separately—there is a particular need to anticipate potential problems with the interaction of expatriates and local staff. In a study of expatriates and local staff (inpatriates) in Central and Eastern European joint ventures and subsidiaries, Peterson found that managers reported a number of behaviors by expatriates that helped them to integrate with local staff, but also some that were hindrances. Clearly, this kind of feedback from MNC managers in the field can provide the basis for expatriate training and also help HCNs to anticipate and work with the expatriates in order to meet joint strategic objectives.

Difficulty: 3: Challenging Chapter: 9 Skill: Synthesis LO: 9-4: To appreciate the necessity of cross-cultural training, job-specific training techniques, and appropriate compensation for expatriate performance AACSB: Analytical thinking

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International Management, 10e, (Deresky/Miller) Chapter 10 Developing a Global Management Cadre 1) In order to maximize a firm's global human resources, IHR managers need to ________.

A) develop effective global management teams B) develop line supervisors through extensive training programs C) acquire low-cost resources D) promote their organizations through word-of-mouth communication Answer: A Difficulty: 2: Moderate Chapter: 10 Skill: Concept LO: 10-1: To appreciate the importance of international assignments in developing top managers with global experience and perspectives and to understand the benefits and costs associated with expatriate assignments AACSB: Diverse and multicultural work environments 2) There are various categories of resources–both people and processes–which IHR managers and others must develop and maintain; in particular it is essential for them to ________.

A) minimize long-term retention and use of international cadre B) develop culturally homogeneous teams C) promote the role of women in international management D) consider host-country labor relations system as essentially anarchic Answer: C Difficulty: 2: Moderate Chapter: 10 Skill: Concept LO: 10-1: To appreciate the importance of international assignments in developing top managers with global experience and perspectives and to understand the benefits and costs associated with expatriate assignments AACSB: Interpersonal relations and teamwork

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3) Felix Johnson is a senior HR manager in a global conglomerate. He believes that an important factor contributing to international competitiveness is the ability of an organization to maximize its global human resources in the long run. With which of the following is Felix most likely to agree?

A) Outsourcing is the most logical method of achieving economies of scale and maximizing benefits.

B) Extensive training programs are unlikely to help organizations improve the quality of their workers.

C) The promotion of women in international management is unlikely to positively impact an organization's competitiveness in the global business arena.

D) Maximizing long-term retention through career management increases the odds in favor of global competitiveness.

Answer: D Difficulty: 3: Challenging Chapter: 10 Skill: Application LO: 10-1: To appreciate the importance of international assignments in developing top managers with global experience and perspectives and to understand the benefits and costs associated with expatriate assignments AACSB: Analytical thinking 4) Neil Grahams is a strategic HR advisor in an American MNC. He believes that in today's globalized economy, both the knowledge and management resources as well as the skilled and unskilled employee resources, central to the success of an organization, are dispersed around the world. According to him, an organization can significantly improve global competitiveness by maximizing its global human resources in the long run. With which of the following is Neil most likely to agree?

A) that maximizing long-term retention adversely affects the ability of an organization to maximize its global human resources in the long run B) that IHR managers must develop effective global management teams to improve global competitiveness C) that women have little or no role to play in international management D) that the use of international cadre through career management is unlikely to improve global competitiveness Answer: B Difficulty: 3: Challenging Chapter: 10 Skill: Application LO: 10-1: To appreciate the importance of international assignments in developing top managers with global experience and perspectives and to understand the benefits and costs associated with expatriate assignments AACSB: Analytical thinking

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5) Effective human resource management of a company's global cadre ends with ________.

A) allocation of an overseas assignment to the executive B) making sure that the foreign assignment and the reintegration process are positive experiences C) preparing the executive for cultural differences D) providing foreign-language training to the executive Answer: B Difficulty: 2: Moderate Chapter: 10 Skill: Concept LO: 10-1: To appreciate the importance of international assignments in developing top managers with global experience and perspectives and to understand the benefits and costs associated with expatriate assignments AACSB: Application of knowledge 6) ________ refers to bringing a manager back home after a foreign assignment has been completed.

A) Expatriation B) Repatriation C) Expatriate failure D) Acculturation Answer: B Difficulty: 1: Easy Chapter: 10 Skill: Concept LO: 10-1: To appreciate the importance of international assignments in developing top managers with global experience and perspectives and to understand the benefits and costs associated with expatriate assignments AACSB: Diverse and multicultural work environments 7) In the context of the study conducted by Lazarova and Caligiuri, which of the following refers to an important factor for successful repatriation?

A) providing foreign-language training B) career development opportunities C) preparing the expatriate to adjust in the host country D) assistance on tax payments Answer: B Difficulty: 2: Moderate Chapter: 10 Skill: Concept LO: 10-1: To appreciate the importance of international assignments in developing top managers with global experience and perspectives and to understand the benefits and costs associated with expatriate assignments AACSB: Analytical thinking

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8) In the context of the study conducted by Lazarova and Caligiuri, which of the following refers to an important HRM practice for successful repatriation?

A) continuous communication with the home office B) financial and tax assistance C) agreement about position upon repatriation D) visible signs that the company values international experience Answer: D Difficulty: 2: Moderate Chapter: 10 Skill: Concept LO: 10-1: To appreciate the importance of international assignments in developing top managers with global experience and perspectives and to understand the benefits and costs associated with expatriate assignments AACSB: Diverse and multicultural work environments 9) The management of the reentry phase of the career cycle, if not handled adequately, ________.

A) can lead to culture shock B) can lead to the negation of the long-term benefits of that executive's international experience C) is most likely to nullify the monetary benefits associated with the executive's international experience D) is most likely to decrease general apathy toward overseas assignments Answer: B Difficulty: 2: Moderate Chapter: 10 Skill: Concept LO: 10-1: To appreciate the importance of international assignments in developing top managers with global experience and perspectives and to understand the benefits and costs associated with expatriate assignments AACSB: Diverse and multicultural work environments 10) The psychological process of readapting to one's home culture after working in a hostcountry culture is called ________.

A) social loafing B) assimilation effect C) reverse culture shock D) expatriate failure Answer: C Difficulty: 2: Moderate Chapter: 10 Skill: Concept LO: 10-1: To appreciate the importance of international assignments in developing top managers with global experience and perspectives and to understand the benefits and costs associated with expatriate assignments AACSB: Diverse and multicultural work environments

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11) "The longer a person is away, the more difficult it is to get back into the swing of things." In the context of repatriation, this often leads to ________.

A) reverse culture shock B) expatriate retention C) assimilation D) segregation Answer: A Difficulty: 2: Moderate Chapter: 10 Skill: Concept LO: 10-1: To appreciate the importance of international assignments in developing top managers with global experience and perspectives and to understand the benefits and costs associated with expatriate assignments AACSB: Diverse and multicultural work environments 12) An expatriate manager who returns after a few years from an overseas assignment to find that there is no position for him in his home country office experiences a(n) ________.

A) reverse culture shock B) expatriate failure C) cognitive dissonance D) assimilation effect Answer: A Difficulty: 2: Moderate Chapter: 10 Skill: Concept LO: 10-1: To appreciate the importance of international assignments in developing top managers with global experience and perspectives and to understand the benefits and costs associated with expatriate assignments AACSB: Diverse and multicultural work environments

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13) Jade International is a highly diversified global firm with headquarters in New Jersey. It manufactures a variety of products ranging from home security systems to automotive components. Jade's 100,000 employees work at facilities located in more than 60 countries around the world. Jade frequently sends American managers overseas to manage the firm's foreign facilities. The HR department is considering the idea of redesigning Jade's expatriate support services program. Which of the following, if true, best supports Jade's decision to provide assistance to trailing spouses in finding jobs overseas?

A) Jade puts great emphasis on promoting the role of women in global management.

B) The majority of Jade's expatriate managers have long-term international experience.

C) Jade has lost a significant chunk of its global cadre in the recent past owing to its failure to offer feasible options to address the dual-career couple's dilemma.

D) Female managers at Jade have reported discriminatory treatment while on overseas assignments.

Answer: C Difficulty: 3: Challenging Chapter: 10 Skill: Critical Thinking LO: 10-1: To appreciate the importance of international assignments in developing top managers with global experience and perspectives and to understand the benefits and costs associated with expatriate assignments AACSB: Reflective thinking 14) Which of the following is a recommendation by Lazarova and Caligiuri for a successful repatriation program?

A) offering support for dealing with family issues on early returns from assignment B) assigning additional professional responsibilities to the expatriate C) establishing a special organizational unit for the purposes of career planning and continuing guidance for the expatriate D) allowing the expatriate to choose alternate career paths Answer: C Difficulty: 3: Challenging Chapter: 10 Skill: Concept LO: 10-1: To appreciate the importance of international assignments in developing top managers with global experience and perspectives and to understand the benefits and costs associated with expatriate assignments AACSB: Diverse and multicultural work environments

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15) ________ is one of the informal means that firms often use to help the trailing spouse find a position at the same location.

A) Intercompany networking B) Organizational shuffling C) Predeparture training D) Global management Answer: A Difficulty: 1: Easy Chapter: 10 Skill: Concept LO: 10-1: To appreciate the importance of international assignments in developing top managers with global experience and perspectives and to understand the benefits and costs associated with expatriate assignments AACSB: Application of knowledge 16) As women continue to move up the corporate ladder, the accompanying spouse is often male—estimated at more than ________ percent.

A) 85 B) 5 C) 25 D) 50 Answer: C Difficulty: 1: Easy Chapter: 10 Skill: Concept LO: 10-1: To appreciate the importance of international assignments in developing top managers with global experience and perspectives and to understand the benefits and costs associated with expatriate assignments AACSB: Application of knowledge 17) Which of the following is essential for a firm that carefully manages its expatriates' careers?

A) creating global opportunities for junior managers B) retaining managers with global experience and skills C) maintaining close connections with national subsidiaries D) recruiting fresh college graduates for global management positions Answer: B Difficulty: 1: Easy Chapter: 10 Skill: Concept LO: 10-1: To appreciate the importance of international assignments in developing top managers with global experience and perspectives and to understand the benefits and costs associated with expatriate assignments AACSB: Diverse and multicultural work environments

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18) Which of the following best explains the attrition rate for expatriates?

A) The skills of expatriates are not marketable because of their time spent overseas.

B) Expatriates are usually relegated to junior positions upon returning to their home country.

C) Expatriates feel unappreciated and dissatisfied both during and after the assignment and leave the company.

D) Expatriates receive less compensation overseas than they receive domestically.

Answer: C Difficulty: 2: Moderate Chapter: 10 Skill: Concept LO: 10-1: To appreciate the importance of international assignments in developing top managers with global experience and perspectives and to understand the benefits and costs associated with expatriate assignments AACSB: Diverse and multicultural work environments 19) Which of the following types of knowledge gained abroad helps in understanding the differences in customer preferences?

A) knowledge about why B) knowledge about when C) knowledge about what D) knowledge about who Answer: C Difficulty: 1: Easy Chapter: 10 Skill: Concept LO: 10-1: To appreciate the importance of international assignments in developing top managers with global experience and perspectives and to understand the benefits and costs associated with expatriate assignments AACSB: Analytical thinking 20) Which of the following exemplifies knowledge about when?

A) knowledge about the effect of timing B) knowledge about relationships created over the life of an assignment C) knowledge about management skills D) knowledge about differences in customer preferences Answer: A Difficulty: 3: Challenging Chapter: 10 Skill: Application LO: 10-1: To appreciate the importance of international assignments in developing top managers with global experience and perspectives and to understand the benefits and costs associated with expatriate assignments AACSB: Analytical thinking

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21) ________ are about learning how to deal with a wide range of people, to adapt to their cultures through compromise, and not to be a dictator.

A) Multiple perspectives B) Tolerance levels C) Technical skills D) Managerial skills Answer: D Difficulty: 1: Easy Chapter: 10 Skill: Concept LO: 10-2: To recognize the need to design programs for the careful preparation, adaptation, and repatriation of the expatriate and any accompanying family, as well as programs for career management and retention, thereby also transferring knowledge to and from host operations AACSB: Application of knowledge 22) Lauryn, an American national, was sent to Japan on an assignment. According to her, it was during this time that she learned to understand situations from the viewpoint of local employees and business people. As an expatriate, which of the following skills did Lauryn attain?

A) multiple perspectives B) ability to work with others C) tolerance for ambiguity D) technical skills Answer: A Difficulty: 2: Moderate Chapter: 10 Skill: Application LO: 10-2: To recognize the need to design programs for the careful preparation, adaptation, and repatriation of the expatriate and any accompanying family, as well as programs for career management and retention, thereby also transferring knowledge to and from host operations AACSB: Application of knowledge 23) ________ is an acquired skill that refer(s) to making decisions with less information and more uncertainty about the process and the outcome.

A) Technical skills B) Managerial skills C) Multiple perspectives D) Tolerance for ambiguity Answer: D Difficulty: 2: Moderate Chapter: 10 Skill: Concept LO: 10-2: To recognize the need to design programs for the careful preparation, adaptation, and repatriation of the expatriate and any accompanying family, as well as programs for career management and retention, thereby also transferring knowledge to and from host operations AACSB: Application of knowledge

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24) Jeff Richards works for an American MNC. For more than 10 years, Jeff was posted in the company's subsidiary in Ghana. Upon returning to his home country a few months ago, Jeff reported that his international experience had substantially enhanced his skills of making decisions with less information and more uncertainty about the outcome. In this instance, Jeff alludes to which of the following acquired skills?

A) tolerance for ambiguity B) technical skills C) managerial skills D) multiple perspectives Answer: A Difficulty: 2: Moderate Chapter: 10 Skill: Application LO: 10-2: To recognize the need to design programs for the careful preparation, adaptation, and repatriation of the expatriate and any accompanying family, as well as programs for career management and retention, thereby also transferring knowledge to and from host operations AACSB: Application of knowledge 25) According to Lazarova and Tarique, which of the following conditions must be met for the successful transfer of knowledge between repatriates and firms?

A) The repatriates must have valuable knowledge to transfer.

B) The repatriates must have low tolerance for ambiguity.

C) The organization must promote the role of women in global management.

D) The organization must successfully resolve the dual-career dilemma.

Answer: A Difficulty: 2: Moderate Chapter: 10 Skill: Concept LO: 10-2: To recognize the need to design programs for the careful preparation, adaptation, and repatriation of the expatriate and any accompanying family, as well as programs for career management and retention, thereby also transferring knowledge to and from host operations AACSB: Diverse and multicultural work environments; Analytical thinking

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26) A repatriated manager says, "Making decisions with less information and more uncertainty about the process and the outcome." Which of the following acquired skills is the manager referring to in this instance?

A) technical skills B) multiple perspectives C) managerial skills D) tolerance for ambiguity Answer: D Difficulty: 3: Challenging Chapter: 10 Skill: Application LO: 10-2: To recognize the need to design programs for the careful preparation, adaptation, and repatriation of the expatriate and any accompanying family, as well as programs for career management and retention, thereby also transferring knowledge to and from host operations AACSB: Application of knowledge 27) Which of the following statements is FALSE regarding repatriation?

A) Many returning executives learn how to deal with a wide range of people, to adapt to their cultures through compromise, and not be a dictator B) Many returning executives learn about making decisions with more information and less uncertainty C) Many returning executives learn to understand situations from the perspective of local employees and business people D) Many returning executives learn patience and tolerance—realizing that managers abroad are in the minority among local people Answer: B Difficulty: 2: Moderate Chapter: 10 Skill: Application LO: 10-2: To recognize the need to design programs for the careful preparation, adaptation, and repatriation of the expatriate and any accompanying family, as well as programs for career management and retention, thereby also transferring knowledge to and from host operations AACSB: Application of knowledge

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28) According to Lazarova and Tarique, organizations need to ________ in order to facilitate knowledge transfer.

A) provide mentoring to repatriates B) resolve the dual-career dilemma C) have the right tools to capture knowledge D) encourage low tolerance for ambiguity among repatriates Answer: C Difficulty: 1: Easy Chapter: 10 Skill: Concept LO: 10-2: To recognize the need to design programs for the careful preparation, adaptation, and repatriation of the expatriate and any accompanying family, as well as programs for career management and retention, thereby also transferring knowledge to and from host operations AACSB: Application of knowledge 29) ________ is optimized when career opportunities provided by the organization are congruent with repatriate career goals and aspirations.

A) Team management B) Organizational efficiency C) Productivity D) Knowledge transfer Answer: D Difficulty: 1: Easy Chapter: 10 Skill: Concept LO: 10-2: To recognize the need to design programs for the careful preparation, adaptation, and repatriation of the expatriate and any accompanying family, as well as programs for career management and retention, thereby also transferring knowledge to and from host operations AACSB: Application of knowledge 30) For sharing resources and managing the transnational transfer of knowledge, it is essential for MNCs to maximize their human assets in the form of ________ teams.

A) virtual management B) regional management C) niche management D) global management Answer: D Difficulty: 1: Easy Chapter: 10 Skill: Concept LO: 10-3: To become familiar with the use of global management teams to coordinate host country and cross-border business AACSB: Interpersonal relations and teamwork

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31) Which term refers to a group of geographically dispersed co-workers that uses a desktop videoconferencing system to communicate and accomplish tasks for the firm?

A) virtual team B) telecommuter group C) permanent transferee D) short-term international team Answer: A Difficulty: 1: Easy Chapter: 10 Skill: Application LO: 10-3: To become familiar with the use of global management teams to coordinate host country and cross-border business AACSB: Interpersonal relations and teamwork 32) What is the primary problem associated with virtual teams at international firms?

A) scheduling meetings B) agreeing on important issues C) facilitating group communication D) building trust among team members Answer: D Difficulty: 2: Moderate Chapter: 10 Skill: Application LO: 10-3: To become familiar with the use of global management teams to coordinate host country and cross-border business AACSB: Interpersonal relations and teamwork 33) Which of the following is NOT considered a task for a global management team?

A) cultivating trust among members B) overcoming communication barriers C) ensuring the team is autonomous from the headquarters D) aligning goals of individual team members Answer: C Difficulty: 2: Moderate Chapter: 10 Skill: Application LO: 10-3: To become familiar with the use of global management teams to coordinate host country and cross-border business AACSB: Application of knowledge

13 .

34) If a global management team needs to be glocal, then ________.

A) it needs to be able to respond to the local market while still be adept at coordinating the parts of the firm B) it needs to be responsive to the home country market while still being adept at coordinating the parts of the firm C) it needs to be responsive to the headquarters while still being adept at coordinating the parts of the firm D) it needs to be responsive to its global customers, while still being adept at coordinating the parts of the firm Answer: A Difficulty: 2: Moderate Chapter: 10 Skill: Application LO: 10-3: To become familiar with the use of global management teams to coordinate host country and cross-border business AACSB: Application of knowledge 35) The term "________" describes a collection of managers in or from several countries who must rely on group collaboration if each member is to experience optimum success and goal achievement.

A) global management team B) niche management team C) virtual management team D) strategic management team Answer: A Difficulty: 1: Easy Chapter: 10 Skill: Concept LO: 10-3: To become familiar with the use of global management teams to coordinate host country and cross-border business AACSB: Interpersonal relations and teamwork 36) Which of the following must an international team avoid if it wants to achieve the individual and collective goals of the team members?

A) developing a global perspective B) providing means to communicate corporate culture C) causing the global enterprise to disintegrate D) disseminating the corporate culture Answer: C Difficulty: 2: Moderate Chapter: 10 Skill: Concept LO: 10-3: To become familiar with the use of global management teams to coordinate host country and cross-border business AACSB: Interpersonal relations and teamwork

14 .

37) Which of the following is particularly important in joint ventures for the purposes of strategic planning, implementation, and production?

A) ethnocentric hiring strategy B) dual-career couples C) multicultural teams D) rigid repatriation policies Answer: C Difficulty: 1: Easy Chapter: 10 Skill: Concept LO: 10-3: To become familiar with the use of global management teams to coordinate host country and cross-border business AACSB: Interpersonal relations and teamwork 38) The members of ________ interact through computer-mediated communication systems and are linked together across time, space, and organizational boundaries.

A) virtual global teams B) primary groups C) local teams D) cliques Answer: A Difficulty: 1: Easy Chapter: 10 Skill: Concept LO: 10-3: To become familiar with the use of global management teams to coordinate host country and cross-border business AACSB: Interpersonal relations and teamwork 39) ________ enable cost effective, rapid knowledge sharing and collaboration, but are fraught with cross-cultural and logistical challenges.

A) Virtual global teams B) Organizational cliques C) Local work teams D) Organizational lobbies Answer: A Difficulty: 1: Easy Chapter: 10 Skill: Concept LO: 10-3: To become familiar with the use of global management teams to coordinate host country and cross-border business AACSB: Interpersonal relations and teamwork

15 .

40) Which of the following is true with regard to global virtual teams?

A) Advances in communication hinder virtual global teams.

B) Virtual global teams do not offer cost advantages.

C) Cultural misunderstandings are fairly rare occurrences across virtual teams.

D) The members of virtual teams interact through computer-mediated communication systems.

Answer: D Difficulty: 1: Easy Chapter: 10 Skill: Concept LO: 10-3: To become familiar with the use of global management teams to coordinate host country and cross-border business AACSB: Interpersonal relations and teamwork 41) Which of the following refers to a language- and communication-related issue that poses a challenge to many virtual global teams?

A) lack of face-to-face meetings to establish trust or for cross-interaction processes such as brainstorming B) variable skill levels and willingness to interact through virtual media C) lack of visibility of nonverbal cues D) variations in attitudes and expectations toward time Answer: C Difficulty: 2: Moderate Chapter: 10 Skill: Concept LO: 10-3: To become familiar with the use of global management teams to coordinate host country and cross-border business AACSB: Written and oral communication 42) Which of the following is NOT an operational challenge for global virtual teams?

A) organizational objectives B) geographic dispersal C) culture differences D) technology Answer: A Difficulty: 1: Easy Chapter: 10 Skill: Concept LO: 10-3: To become familiar with the use of global management teams to coordinate host country and cross-border business AACSB: Interpersonal relations and teamwork

16 .

43) Successful virtual team managers ________.

A) have the ability to convey goals and resolve conflicts B) are more likely to use autocratic power C) are more likely to discourage innovation D) have limited international experience Answer: A Difficulty: 2: Moderate Chapter: 10 Skill: Concept LO: 10-3: To become familiar with the use of global management teams to coordinate host country and cross-border business AACSB: Interpersonal relations and teamwork 44) Which of the following is considered essential in light of the increasing proliferation of foreign subsidiaries and joint ventures?

A) nurturing autocratic leadership B) acquiring resources C) increasing the power distance D) developing effective transnational teams Answer: D Difficulty: 2: Moderate Chapter: 10 Skill: Concept LO: 10-3: To become familiar with the use of global management teams to coordinate host country and cross-border business AACSB: Interpersonal relations and teamwork 45) According to the Joshi study, the most critical conflicts related to transnational teams are between ________.

A) headquarters and subsidiaries B) expatriates C) teams having cultural differences, local work norms, and varied time zones D) subsidiaries Answer: D Difficulty: 1: Easy Chapter: 10 Skill: Concept LO: 10-3: To become familiar with the use of global management teams to coordinate host country and cross-border business AACSB: Interpersonal relations and teamwork

17 .

46) Which of the following is an advantage of a synergy?

A) minimized cross-cultural exchanges B) exposure to different viewpoints C) greater complexity in the workplace D) varying managerial styles Answer: B Difficulty: 1: Easy Chapter: 10 Skill: Concept LO: 10-3: To become familiar with the use of global management teams to coordinate host country and cross-border business AACSB: Interpersonal relations and teamwork 47) According to a study of global teams by Govindarajan and Gupta, which of the following is the most important task in developing a successful global business team?

A) clarifying the objectives of the team B) aligning the goals of each team member C) cultivating trust among all team members D) ensuring that team members have essential skills Answer: C Difficulty: 1: Easy Chapter: 10 Skill: Concept LO: 10-3: To become familiar with the use of global management teams to coordinate host country and cross-border business AACSB: Interpersonal relations and teamwork 48) According to a study of global teams by Govindarajan and Gupta, which of the following is critical to the success of global business teams if they want to minimize conflict and encourage cooperation?

A) aligning goals of individual team members B) obtaining clarity regarding team objectives C) ensuring that the team possesses necessary knowledge and skills D) cultivating trust among team members Answer: D Difficulty: 1: Easy Chapter: 10 Skill: Concept LO: 10-3: To become familiar with the use of global management teams to coordinate host country and cross-border business AACSB: Interpersonal relations and teamwork

18 .

49) Which of the following is a recommendation made by Govindarajan and Gupta for improving global teamwork?

A) rotating and diffusing team leadership B) conducting all meetings in a single location C) disassociating rewards from team performance D) discouraging social networking among managers from different countries Answer: A Difficulty: 2: Moderate Chapter: 10 Skill: Concept LO: 10-3: To become familiar with the use of global management teams to coordinate host country and cross-border business AACSB: Interpersonal relations and teamwork 50) Which of the following is NOT a recommendation made by Govindarajan and Gupta for improving global teamwork?

A) minimize global exposure for all team members B) cultivating a culture of trust C) linking rewards to team performance D) building social networks among managers from different countries Answer: A Difficulty: 2: Moderate Chapter: 10 Skill: Concept LO: 10-3: To become familiar with the use of global management teams to coordinate host country and cross-border business AACSB: Interpersonal relations and teamwork 51) A comparative study of European project groups in several countries by Sylvie Chevrie revealed three main strategies for dealing with the challenge of achieving cross-cultural collaboration in multinational horizontal projects. Which of the following is one of those strategies?

A) minimizing trial-and-error processes B) drawing upon individual tolerance and self-control C) linking compensation to individual achievement D) keeping disparate members isolated from the core organizational processes Answer: B Difficulty: 1: Easy Chapter: 10 Skill: Concept LO: 10-3: To become familiar with the use of global management teams to coordinate host country and cross-border business AACSB: Interpersonal relations and teamwork

19 .

52) A comparative study of European project groups in several countries by Sylvie Chevrie revealed three main strategies for dealing with the challenge of achieving cross-cultural collaboration in multinational horizontal projects. Which of the following is NOT one of those strategies?

A) drawing upon individual tolerance and self-control B) setting up transnational cultures C) linking rewards to individual achievement D) trial-and-error processes coupled with personal relationships Answer: C Difficulty: 1: Easy Chapter: 10 Skill: Concept LO: 10-3: To become familiar with the use of global management teams to coordinate host country and cross-border business AACSB: Interpersonal relations and teamwork 53) Adler's major study of women from what country working as expatriate managers in countries around the world showed that they are, for the most part, successful?

A) Russia B) China C) Saudi Arabia D) America Answer: D Difficulty: 1: Easy Chapter: 10 Skill: Concept LO: 10-4: To recognize the varying roles of women around the world in international management AACSB: Diverse and multicultural work environments 54) The reasons for the different opportunities for women among various countries can often be traced to ________.

A) the inadequate education systems of the host countries B) the cultural expectations of the host countries C) the predominantly agricultural economies of the host countries D) the lack of adequate technology in the host countries Answer: B Difficulty: 1: Easy Chapter: 10 Skill: Concept LO: 10-4: To recognize the varying roles of women around the world in international management AACSB: Diverse and multicultural work environments

20 .

55) For years, some foreign firms hesitated to send women managers on foreign assignments to countries, such as ________, because the firms assumed the women would not be accepted in the culture that frowned on women working outside the home.

A) Canada B) England C) France D) Japan Answer: D Difficulty: 2: Moderate Chapter: 10 Skill: Concept LO: 10-4: To recognize the varying roles of women around the world in international management AACSB: Diverse and multicultural work environments 56) Research on expatriate assignments continues to show that ________.

A) the number of dual-career couples is steadily declining B) linking rewards to team performance decreases the overall productivity of teams in the long run C) females are disproportionately underrepresented in expatriate assignments D) encouraging trial-and-error processes adversely affects cross-cultural collaboration Answer: C Difficulty: 2: Moderate Chapter: 10 Skill: Concept LO: 10-4: To recognize the varying roles of women around the world in international management AACSB: Diverse and multicultural work environments 57) Opportunities for indigenous female employees to move up the managerial ladder in a given culture depend on the ________.

A) values and expectations regarding the role of women in that society B) ability of women to perform in cross-cultural teams in that culture C) success of male managers in integrating global teams in that culture D) overall quality of life in that culture Answer: A Difficulty: 2: Moderate Chapter: 10 Skill: Concept LO: 10-4: To recognize the varying roles of women around the world in international management AACSB: Diverse and multicultural work environments

21 .

58) Which of the following is true with regard to women in international business?

A) Representation by women in senior management is lowest in Russia and the Philippines.

B) Female senior managers in international business are still more the exception than the norm.

C) Usually, firms do not hesitate to send women to countries where traditional gender roles are the norm.

D) In the United States, unemployment rates are higher for women than for men.

Answer: B Difficulty: 2: Moderate Chapter: 10 Skill: Concept LO: 10-4: To recognize the varying roles of women around the world in international management AACSB: Diverse and multicultural work environments 59) ________ refers to a process of negotiations between workers and managers.

A) Picketing B) Segregating C) Job security D) Collective bargaining Answer: D Difficulty: 1: Easy Chapter: 10 Skill: Concept LO: 10-5: To understand the variations in host-country labor relations systems and the impact on the manager's job and effectiveness AACSB: Diverse and multicultural work environments 60) One of the main dimensions of the labor-management relationship that a manager must consider is ________.

A) specific human resource policies in terms of recruitment, training, and compensation B) the role of mentoring bodies in the relationship C) advertising and promotional strategies D) repatriation policies and procedures Answer: A Difficulty: 2: Moderate Chapter: 10 Skill: Concept LO: 10-5: To understand the variations in host-country labor relations systems and the impact on the manager's job and effectiveness AACSB: Application of knowledge

22 .

61) Which of the following is a constraint frequently placed on management by organized labor?

A) restrictions on the repatriation of capital B) limits on the firm's ability to vary employment levels when necessary C) rigid requirements for bargaining with global unions D) restrictions on borrowing from private banks Answer: B Difficulty: 2: Moderate Chapter: 10 Skill: Concept LO: 10-5: To understand the variations in host-country labor relations systems and the impact on the manager's job and effectiveness AACSB: Application of knowledge 62) Which of the following is the most likely reason for falling union membership in industrialized countries?

A) a decrease in the proportion of white-collar and service workers as proportionate to manufacturing workers B) technological and organizational changes C) the declining popularity of unions among the older generations D) a reduced number of firms offshoring white-collar jobs Answer: B Difficulty: 1: Easy Chapter: 10 Skill: Concept LO: 10-5: To understand the variations in host-country labor relations systems and the impact on the manager's job and effectiveness AACSB: Application of knowledge 63) The traditional trade union structures in Western industrialized societies have been in ________, representing all grades of employees in a specific industry.

A) craft unions B) general unions C) industrial unions D) conglomerate unions Answer: C Difficulty: 1: Easy Chapter: 10 Skill: Concept LO: 10-5: To understand the variations in host-country labor relations systems and the impact on the manager's job and effectiveness AACSB: Application of knowledge

23 .

64) ________ represent members in several industries.

A) Industry unions B) General unions C) Craft unions D) Conglomerate unions Answer: D Difficulty: 1: Easy Chapter: 10 Skill: Concept LO: 10-5: To understand the variations in host-country labor relations systems and the impact on the manager's job and effectiveness AACSB: Application of knowledge 65) ________ unions are based on certain occupational skills.

A) General B) Craft C) Industry D) Conglomerate Answer: B Difficulty: 1: Easy Chapter: 10 Skill: Concept LO: 10-5: To understand the variations in host-country labor relations systems and the impact on the manager's job and effectiveness AACSB: Application of knowledge 66) Which term refers to the process used to make agreements between management and labor unions?

A) labor management B) collective bargaining C) negotiations D) labor allowances Answer: B Difficulty: 1: Easy Chapter: 10 Skill: Concept LO: 10-5: To understand the variations in host-country labor relations systems and the impact on the manager's job and effectiveness AACSB: Application of knowledge

24 .

67) Which of the following is one of the forces working toward convergence in labor systems?

A) successful repatriation B) internal competitive forces C) decreased open trade D) political changes Answer: D Difficulty: 1: Easy Chapter: 10 Skill: Concept LO: 10-5: To understand the variations in host-country labor relations systems and the impact on the manager's job and effectiveness AACSB: Reflective thinking 68) ________ occurs as the migration of management and workplace practices around the world reduce workplace disparities from one country to another.

A) Convergence B) Segregation C) Diversification D) Codetermination Answer: A Difficulty: 1: Easy Chapter: 10 Skill: Concept LO: 10-5: To understand the variations in host-country labor relations systems and the impact on the manager's job and effectiveness AACSB: Diverse and multicultural work environments 69) The mission of the International Labor Organization is to ________.

A) develop and nurture global union leaders B) file lawsuits on behalf of workers C) promote low-skilled and semiskilled laborers as opposed to highly skilled laborers worldwide.

D) ensure that humane conditions of labor are maintained Answer: D Difficulty: 2: Moderate Chapter: 10 Skill: Concept LO: 10-5: To understand the variations in host-country labor relations systems and the impact on the manager's job and effectiveness AACSB: Application of knowledge

25 .

70) Convergence occurs as ________ is sought, such as for the EC countries, and as competitive pressures in free-trade zones, such as the USMCA countries, eventually bring about demands for some equalization of benefits for workers.

A) segregation B) harmonization C) homogenization of the workforce D) cultural assimilation Answer: B Difficulty: 1: Easy Chapter: 10 Skill: Concept LO: 10-5: To understand the variations in host-country labor relations systems and the impact on the manager's job and effectiveness AACSB: Reflective thinking 71) Which of the following refers to a force that favors global convergence?

A) technological standardization B) political ideology C) social systems D) national labor relations systems and traditions Answer: A Difficulty: 1: Easy Chapter: 10 Skill: Concept LO: 10-5: To understand the variations in host-country labor relations systems and the impact on the manager's job and effectiveness AACSB: Information technology 72) Which of the following is a force that establishes or maintains divergent systems?

A) technological standardization B) declining role of unions C) collective bargaining methods D) global competitiveness Answer: C Difficulty: 1: Easy Chapter: 10 Skill: Concept LO: 10-5: To understand the variations in host-country labor relations systems and the impact on the manager's job and effectiveness AACSB: Application of knowledge

26 .

73) Which of the following terms refers to the participation of labor in the management of a firm?

A) codetermination B) parochialism C) assimilation D) differentiation Answer: A Difficulty: 1: Easy Chapter: 10 Skill: Concept LO: 10-5: To understand the variations in host-country labor relations systems and the impact on the manager's job and effectiveness AACSB: Application of knowledge 74) Which of the following is an EU policy that promotes common job-related benefits and working conditions throughout the EU? A) fixed alliance B) social charter C) statutory law D) codetermination Answer: B Difficulty: 2: Moderate Chapter: 10 Skill: Concept LO: 10-5: To understand the variations in host-country labor relations systems and the impact on the manager's job and effectiveness AACSB: Application of knowledge 75) In the globalized economy, the knowledge and management resources required for a firm to succeed are no longer concentrated in a single region.

Answer: FALSE Difficulty: 1: Easy Chapter: 10 Skill: Concept LO: 10-1: To appreciate the importance of international assignments in developing top managers with global experience and perspectives and to understand the benefits and costs associated with expatriate assignments AACSB: Diverse and multicultural work environments

27 .

76) IHR managers are responsible for minimizing long-term retention and benefits so that the company can develop a top management team with global experience.

Answer: FALSE Difficulty: 1: Easy Chapter: 10 Skill: Concept LO: 10-1: To appreciate the importance of international assignments in developing top managers with global experience and perspectives and to understand the benefits and costs associated with expatriate assignments AACSB: Interpersonal relations and teamwork 77) For a firm, the ability to develop a globally experienced top management team depends largely on the success of expatriates' assignments.

Answer: TRUE Difficulty: 2: Moderate Chapter: 10 Skill: Concept LO: 10-1: To appreciate the importance of international assignments in developing top managers with global experience and perspectives and to understand the benefits and costs associated with expatriate assignments AACSB: Interpersonal relations and teamwork 78) Reverse culture shock occurs primarily because of the ease of reintegrating into the organization.

Answer: FALSE Difficulty: 1: Easy Chapter: 10 Skill: Concept LO: 10-1: To appreciate the importance of international assignments in developing top managers with global experience and perspectives and to understand the benefits and costs associated with expatriate assignments AACSB: Interpersonal relations and teamwork 79) For companies to maximize the long-term use of their global cadre, they need to make sure that the foreign assignment and the reintegration process are positive experiences.

Answer: TRUE Difficulty: 1: Easy Chapter: 10 Skill: Concept LO: 10-1: To appreciate the importance of international assignments in developing top managers with global experience and perspectives and to understand the benefits and costs associated with expatriate assignments AACSB: Interpersonal relations and teamwork

28 .

80) Effective human resource management of a company's global cadre ends with the overseas assignment.

Answer: FALSE Difficulty: 1: Easy Chapter: 10 Skill: Concept LO: 10-1: To appreciate the importance of international assignments in developing top managers with global experience and perspectives and to understand the benefits and costs associated with expatriate assignments AACSB: Interpersonal relations and teamwork 81) Employees preparing for overseas assignments benefit from training in cultural differences, attitude formation and behavioral influence, factual country knowledge, and language skills.

Answer: TRUE Difficulty: 1: Easy Chapter: 10 Skill: Concept LO: 10-1: To appreciate the importance of international assignments in developing top managers with global experience and perspectives and to understand the benefits and costs associated with expatriate assignments AACSB: Diverse and multicultural work environments 82) Effective human resource management of a company's global cadre ends with the successful repatriation of the executive into company headquarters.

Answer: TRUE Difficulty: 2: Moderate Chapter: 10 Skill: Concept LO: 10-1: To appreciate the importance of international assignments in developing top managers with global experience and perspectives and to understand the benefits and costs associated with expatriate assignments AACSB: Diverse and multicultural work environments 83) According to the study by Lazarova and Caligiuri, career planning sessions are associated with successful repatriation.

Answer: TRUE Difficulty: 1: Easy Chapter: 10 Skill: Concept LO: 10-1: To appreciate the importance of international assignments in developing top managers with global experience and perspectives and to understand the benefits and costs associated with expatriate assignments AACSB: Diverse and multicultural work environments

29 .

84) Reverse culture shock occurs primarily because of the difficulty of reintegrating into the organization.

Answer: TRUE Difficulty: 1: Easy Chapter: 10 Skill: Critical Thinking LO: 10-1: To appreciate the importance of international assignments in developing top managers with global experience and perspectives and to understand the benefits and costs associated with expatriate assignments AACSB: Diverse and multicultural work environments 85) Feelings of alienation due to the loss of contact with family, friends, and daily life speed up the resocialization process.

Answer: FALSE Difficulty: 1: Easy Chapter: 10 Skill: Concept LO: 10-1: To appreciate the importance of international assignments in developing top managers with global experience and perspectives and to understand the benefits and costs associated with expatriate assignments AACSB: Diverse and multicultural work environments 86) To maximize the long-term use of their global cadre, companies need to make sure that a foreign assignment and the reintegration process are positive experiences.

Answer: TRUE Difficulty: 1: Easy Chapter: 10 Skill: Concept LO: 10-1: To appreciate the importance of international assignments in developing top managers with global experience and perspectives and to understand the benefits and costs associated with expatriate assignments AACSB: Diverse and multicultural work environments 87) A candidate's spouse and other family members need the desire and ability to cope with unfamiliar environments and cultures.

Answer: TRUE Difficulty: 1: Easy Chapter: 10 Skill: Application LO: 10-1: To appreciate the importance of international assignments in developing top managers with global experience and perspectives and to understand the benefits and costs associated with expatriate assignments AACSB: Application of knowledge

30 .

88) Typically, firms use highly formal means to help an accompanying spouse find a position at the same location.

Answer: FALSE Difficulty: 1: Easy Chapter: 10 Skill: Concept LO: 10-1: To appreciate the importance of international assignments in developing top managers with global experience and perspectives and to understand the benefits and costs associated with expatriate assignments AACSB: Reflective thinking 89) The attrition rate for expatriates is considerably higher than that of inpatriates.

Answer: FALSE Difficulty: 1: Easy Chapter: 10 Skill: Concept LO: 10-1: To appreciate the importance of international assignments in developing top managers with global experience and perspectives and to understand the benefits and costs associated with expatriate assignments AACSB: Diverse and multicultural work environments 90) Making decisions with more information and less uncertainty about the process and the outcome is referred as tolerance for ambiguity.

Answer: FALSE Difficulty: 2: Moderate Chapter: 10 Skill: Concept LO: 10-2: To recognize the need to design programs for the careful preparation, adaptation, and repatriation of the expatriate and any accompanying family, as well as programs for career management and retention, thereby also transferring knowledge to and from host operations AACSB: Application of knowledge 91) Repatriated managers often experience change and uncertainty as they adjust to returning home after a foreign assignment.

Answer: TRUE Difficulty: 1: Easy Chapter: 10 Skill: Concept LO: 10-2: To recognize the need to design programs for the careful preparation, adaptation, and repatriation of the expatriate and any accompanying family, as well as programs for career management and retention, thereby also transferring knowledge to and from host operations AACSB: Interpersonal relations and teamwork

31 .

92) Learning to communicate more with others and empathize with them implies that an executive has acquired considerable tolerance for ambiguity.

Answer: FALSE Difficulty: 2: Moderate Chapter: 10 Skill: Concept LO: 10-2: To recognize the need to design programs for the careful preparation, adaptation, and repatriation of the expatriate and any accompanying family, as well as programs for career management and retention, thereby also transferring knowledge to and from host operations AACSB: Analytical thinking 93) Knowledge transfer is optimized when career opportunities provided by the organization are congruent with repatriate career goals and aspirations.

Answer: TRUE Difficulty: 2: Moderate Chapter: 10 Skill: Concept LO: 10-2: To recognize the need to design programs for the careful preparation, adaptation, and repatriation of the expatriate and any accompanying family, as well as programs for career management and retention, thereby also transferring knowledge to and from host operations AACSB: Diverse and multicultural work environments 94) A successful repatriation program starts after the first phase of the assignment has been completed.

Answer: FALSE Difficulty: 1: Easy Chapter: 10 Skill: Concept LO: 10-2: To recognize the need to design programs for the careful preparation, adaptation, and repatriation of the expatriate and any accompanying family, as well as programs for career management and retention, thereby also transferring knowledge to and from host operations AACSB: Diverse and multicultural work environments 95) The manner in which multicultural interaction affects the firm's operations depends on its level of international involvement, its environment, and its strategy.

Answer: TRUE Difficulty: 2: Moderate Chapter: 10 Skill: Concept LO: 10-2: To recognize the need to design programs for the careful preparation, adaptation, and repatriation of the expatriate and any accompanying family, as well as programs for career management and retention, thereby also transferring knowledge to and from host operations AACSB: Diverse and multicultural work environments

32 .

96) Research indicates that teleconferencing and videoconferencing is the best way to kick off a virtual team project.

Answer: TRUE Difficulty: 2: Moderate Chapter: 10 Skill: Concept LO: 10-3: To become familiar with the use of global management teams to coordinate host country and cross-border business AACSB: Written and oral communication 97) A global management team describes a collection of managers in or from several countries who rely on group collaboration if each member is to experience optimum success and goal achievement.

Answer: TRUE Difficulty: 1: Easy Chapter: 10 Skill: Concept LO: 10-3: To become familiar with the use of global management teams to coordinate host country and cross-border business AACSB: Written and oral communication 98) A horizontal networked structure enables the organization to share knowledge across business units and across cultures.

Answer: TRUE Difficulty: 1: Easy Chapter: 10 Skill: Concept LO: 10-3: To become familiar with the use of global management teams to coordinate host country and cross-border business AACSB: Written and oral communication 99) The ability to develop and lead effective transnational teams is non-essential in light of the increasing use of foreign subsidiaries, joint ventures, and other transnational alliances.

Answer: FALSE Difficulty: 1: Easy Chapter: 10 Skill: Concept LO: 10-3: To become familiar with the use of global management teams to coordinate host country and cross-border business AACSB: Written and oral communication

33 .

100) A vertical networked structure, with people around the world conducting meetings and exchanging information via the Internet, thus enabling the organization to capitalize on 24-hour productivity is called a virtual global team.

Answer: FALSE Difficulty: 1: Easy Chapter: 10 Skill: Concept LO: 10-3: To become familiar with the use of global management teams to coordinate host country and cross-border business AACSB: Interpersonal relations and teamwork 101) In traditional societies, women tend to enjoy a high degree of economic independence.

Answer: FALSE Difficulty: 1: Easy Chapter: 10 Skill: Concept LO: 10-4: To recognize the varying roles of women around the world in international management AACSB: Diverse and multicultural work environments 102) According to research, host country citizens react negatively towards female executives on foreign assignments because of cultural attitudes about women working outside of the home.

Answer: FALSE Difficulty: 1: Easy Chapter: 10 Skill: Concept LO: 10-4: To recognize the varying roles of women around the world in international management AACSB: Diverse and multicultural work environments 103) Opportunities for indigenous female employees to move up the managerial ladder in a given culture do not depend on the values and expectations regarding the role of women in that society.

Answer: FALSE Difficulty: 1: Easy Chapter: 10 Skill: Concept LO: 10-4: To recognize the varying roles of women around the world in international management AACSB: Diverse and multicultural work environments

34 .

104) Women enjoy equal access to senior management positions in most Asian countries.

Answer: FALSE Difficulty: 2: Moderate Chapter: 10 Skill: Concept LO: 10-4: To recognize the varying roles of women around the world in international management AACSB: Diverse and multicultural work environments 105) The abundance of expatriates who are female or represent other minority groups does not reflect their lack of desire to take overseas assignments.

Answer: FALSE Difficulty: 1: Easy Chapter: 10 Skill: Concept LO: 10-4: To recognize the varying roles of women around the world in international management AACSB: Diverse and multicultural work environments 106) The prevailing labor relations system in a country is important to the international manager because it can constrain the strategic choices and operational activities of a firm operating there.

Answer: TRUE Difficulty: 1: Easy Chapter: 10 Skill: Concept LO: 10-5: To understand the variations in host-country labor relations systems and the impact on the manager's job and effectiveness AACSB: Application of knowledge 107) Convergence occurs as the migration of management and workplace practices around the world reduce workplace disparities from one country to another.

Answer: TRUE Difficulty: 1: Easy Chapter: 10 Skill: Concept LO: 10-5: To understand the variations in host-country labor relations systems and the impact on the manager's job and effectiveness AACSB: Application of knowledge

35 .

108) Codetermination encourages cooperation between management and labor in running a business.

Answer: TRUE Difficulty: 1: Easy Chapter: 10 Skill: Concept LO: 10-5: To understand the variations in host-country labor relations systems and the impact on the manager's job and effectiveness AACSB: Application of knowledge 109) Unions in Germany are well integrated into managerial decision making and often makes a positive contribution to corporate competitiveness and restructuring, similar to the relationship that companies in the United States has with unions.

Answer: FALSE Difficulty: 1: Easy Chapter: 10 Skill: Concept LO: 10-5: To understand the variations in host-country labor relations systems and the impact on the manager's job and effectiveness AACSB: Application of knowledge 110) Many foreign firms set up production in Mexico—using the advantages of NAFTA, and now USMCA, at least in part for the lower wages.

Answer: TRUE Difficulty: 1: Easy Chapter: 10 Skill: Concept LO: 10-5: To understand the variations in host-country labor relations systems and the impact on the manager's job and effectiveness AACSB: Application of knowledge

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111) What are some reasons for firms bringing expatriates home early? How can firms ease the transition during repatriation?

Answer: New expatriate postings are not only down, but many employers are actually bringing them home early for several reasons. Posting expatriates abroad is very expensive, security problems increasingly give potential expatriates pause, educational facilities are turning out topquality candidates abroad, and the recent global recession made the cost of posting employees abroad even more unattractive. As expatriates return home, employers can ease the transition with a repatriation program. Firms need to make sure that the expatriate and his or her family don't feel that the company has left them adrift. Firms often provide psychologists, mentors, career planning services, and relocation assistance.

Difficulty: 3: Challenging Chapter: 10 Skill: Application LO: 10-1: To appreciate the importance of international assignments in developing top managers with global experience and perspectives and to understand the benefits and costs associated with expatriate assignments AACSB: Application of knowledge 112) According to research, what practices should firms follow when making international assignments in order to ensure a high degree of job satisfaction and limited turnover?

Answer: Black and Gregersen's research of 750 U.S., European, and Japanese companies concluded that those companies reporting a high degree of job satisfaction and strong performance, and experiencing limited turnover, used the following practices when making international assignments: 1. They focus on knowledge creation and global leadership development.

2. They assign overseas posts to people whose technical skills are matched or exceeded by their cross-cultural abilities.

3. They end expatriate assignments with a deliberate repatriation process.

A successful repatriation program starts before the assignment. The company's top management must set up a culture conveying the message that the organization regards international assignments as an integral part of continuing career development and advancement, and that it values the skills of the returnees. The company's objectives should be reflected in its long-range plans, commitment, and compensation on behalf of the expatriate.

Difficulty: 2: Moderate Chapter: 10 Skill: Concept LO: 10-1: To appreciate the importance of international assignments in developing top managers with global experience and perspectives and to understand the benefits and costs associated with expatriate assignments AACSB: Diverse and multicultural work environments

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113) Define repatriation. Discuss some of the difficulties faced by repatriated employees. How can human resource managers assist repatriated employees?

Answer: Repatriation is the expatriate's return to his or her home country following completion of a foreign assignment.

Unless managed well, the expatriate is likely to encounter problems upon returning home. Some returning employees find their international experience is not valued, and they may be placed in lesser or ill-suited positions than what they held abroad. Some expatriates report financial difficulties upon returning, such as inflated housing prices or cuts in pay. Many experience "reverse culture shock," readjustment to parent-country culture. For the employee and family members who have spent several years abroad, psychological readjustment to life in the home country can be stressful.

Human resource managers can proactively provide counseling on the types of problems that employees face upon returning home. While the expatriate is abroad, the firm can monitor the employee's compensation and career path. After returning home, the firm can provide bridge loans and other interim financial assistance, as well as counseling to address both career and psychological needs. The firm needs to ensure the expatriate has a career position equal to, or better than, the one held before going abroad.

Difficulty: 2: Moderate Chapter: 10 Skill: Concept LO: 10-2: To recognize the need to design programs for the careful preparation, adaptation, and repatriation of the expatriate and any accompanying family, as well as programs for career management and retention, thereby also transferring knowledge to and from host operations AACSB: Diverse and multicultural work environments 114) What are the long-term consequences of an ineffective repatriation program?

Answer: The long-term implications of ineffective repatriation practices for any particular company are clear: few good managers will be willing to take international assignments because they will see what happened to their colleagues. If a certain manager lost out on promotion opportunities while overseas and is now, in fact, worse off than before he or she left, the only people willing to take on foreign assignments in the future will be either those who have not been able to succeed on the home front or those who think that a stint abroad will be like a vacation. In fact, research has shown that employees commonly see overseas assignments as negative career moves in some U.S. multinational companies.

Difficulty: 2: Moderate Chapter: 10 Skill: Concept LO: 10-2: To recognize the need to design programs for the careful preparation, adaptation, and repatriation of the expatriate and any accompanying family, as well as programs for career management and retention, thereby also transferring knowledge to and from host operations AACSB: Analytical thinking

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115) What challenges face repatriated managers when they return from a foreign assignment?

How do these problems affect employers?

Answer: Repatriated managers may not know what their new job back home will entail. They may have enjoyed considerable authority abroad that will not continue at home. They may feel out of the loop on changes that have occurred at the home office. They and their families may have enjoyed a higher social status in the host country than they will enjoy after returning home.

The repatriation problem can be expensive for a firm. By some estimates one-quarter of all repatriated employees leave their employer within a year after returning home. The average U.S. expatriate costs the employer about $300,000 per year and stays three to four years on an overseas assignment; thus, each repatriated executive who leaves the firm represents a milliondollar investment walking out the door.

Difficulty: 2: Moderate Chapter: 10 Skill: Concept LO: 10-2: To recognize the need to design programs for the careful preparation, adaptation, and repatriation of the expatriate and any accompanying family, as well as programs for career management and retention, thereby also transferring knowledge to and from host operations AACSB: Diverse and multicultural work environments 116) What are some reasons for firms bringing expatriates home early? How can firms ease the transition during repatriation?

Answer: New expatriate postings are not only down, but many employers are actually bringing them home early for several reasons. Posting expatriates abroad is very expensive, security problems increasingly give potential expatriates pause, educational facilities are turning out topquality candidates abroad, and the recent global recession made the cost of posting employees abroad even more unattractive. As expatriates return home, employers can ease the transition with a repatriation program. Firms need to make sure that the expatriate and his or her family don't feel that the company has left them adrift. Firms often provide psychologists, mentors, career planning services, and relocation assistance.

Difficulty: 2: Moderate Chapter: 10 Skill: Application LO: 10-2: To recognize the need to design programs for the careful preparation, adaptation, and repatriation of the expatriate and any accompanying family, as well as programs for career management and retention, thereby also transferring knowledge to and from host operations AACSB: Application of knowledge

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117) What are the three phases of the expatriate transition process? Briefly describe each phase.

Answer: The overall transition process experienced by the company's international management cadre over time comprises three phases of transition and adjustment that must be managed for successful socialization to a new culture and resocialization back to the old culture. These phases are: (1) the exit transition from the home country, the success of which will be determined largely by the quality of preparation the expatriate has received; (2) the entry transition to the host country, in which successful acculturation (or early exit) will depend largely on monitoring and support; and (3) the entry transition back to the home country or to a new host country, in which the level of reverse culture shock and the ease of re-acculturation will depend on previous stages of preparation and support.

Difficulty: 2: Moderate Chapter: 10 Skill: Concept LO: 10-2: To recognize the need to design programs for the careful preparation, adaptation, and repatriation of the expatriate and any accompanying family, as well as programs for career management and retention, thereby also transferring knowledge to and from host operations AACSB: Application of knowledge 118) According to Berthoin, what are the different types of knowledge that can be gained abroad by global managers? How can firms ensure that they experience long-term benefits from this knowledge?

Answer: Berthoin described five types of knowledge gained abroad: 1. Knowledge about what (e.g., differences in customer preferences) 2. Knowledge about why (e.g., understanding how culture differences affect cross-cultural understanding) 3. Knowledge about how (e.g., management skills such as delegating responsibilities) 4. Knowledge about when (e.g., knowledge about the effect of timing) 5. Knowledge about who (e.g., relationships created over the life of an assignment) The management of the reentry phase of the career cycle is as vital as the management of the cross-cultural entry and training. Otherwise, the long-term benefits of that executive's international experience may be negated. A company may derive many potential benefits from carefully managing the careers of its expatriates. By helping managers make the right moves for their careers, the company will be able to retain people with increasing global experience and skills.

Difficulty: 2: Moderate Chapter: 10 Skill: Concept LO: 10-2: To recognize the need to design programs for the careful preparation, adaptation, and repatriation of the expatriate and any accompanying family, as well as programs for career management and retention, thereby also transferring knowledge to and from host operations AACSB: Application of knowledge

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119) What are global management teams? Why are they important to global firms?

Answer: The term global management team describes a collection of managers in or from several countries who must rely on group collaboration if each member is to experience optimum success and goal achievement. Therefore, global teamwork is vital, as are the pockets of crosscultural teamwork and interactions that occur at many boundaries. For the global company, worldwide competition and markets necessitate global teams for strategy development, both for the organization as a whole and for the local units to respond to their markets.

Difficulty: 2: Moderate Chapter: 10 Skill: Concept LO: 10-3: To become familiar with the use of global management teams to coordinate host country and cross-border business AACSB: Interpersonal relations and teamwork 120) What are some of the operational challenges for global virtual teams with respect to language and communication?

Answer: Since the teams are composed of members from different nationalities and culture, there are translation difficulties, or at least variations in accents, semantics, terminology, and jargon. Lack of personal and physical contact inhibits trust- and relationship-building in many countries. Also, the social dynamics change. Additionally, lack of visibility of nonverbal cues makes interpretation difficult and creates two-way noise in the communication process.

Difficulty: 2: Moderate Chapter: 10 Skill: Concept LO: 10-3: To become familiar with the use of global management teams to coordinate host country and cross-border business AACSB: Interpersonal relations and teamwork 121) What are some of the skills that are necessary for leaders of virtual global teams?

Answer: Successful virtual global team leaders have the following skills: (1) interpersonal facilitation, the ability to build teams and resolve conflicts; (2) task facilitation, the ability to convey goals and train team members to use the collaborative technology effectively; (3) resource acquisition; and (4) external alignment/vision, the ability to mesh the team's activities with the organization's goals.

Difficulty: 2: Moderate Chapter: 10 Skill: Concept LO: 10-3: To become familiar with the use of global management teams to coordinate host country and cross-border business AACSB: Interpersonal relations and teamwork

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122) Discuss the conflicts associated with transnational teams.

Answer: Teams comprising people located in far-flung operations are faced with oftenconflicting goals of achieving greater efficiency across those operations, responding to local differences, and facilitating organizational learning across boundaries. Conflicts arise based on cultural differences, local work norms and environments, and varied time zones. A study by Joshi et al. of a 30-member team of human resource (HR) managers in six countries in the AsiaPacific region showed that network analysis of the various interactions among team members can reveal when and where negative cross-cultural conflicts occur, and thus provide top management with information for conflict resolution, so a higher level of synergy may be attained among the group members. The advantages of synergy include a greater opportunity for global competition (by being able to share experiences, technology, and a pool of international managers) and a greater opportunity for cross-cultural understanding and exposure to different viewpoints. The disadvantages include problems resulting from differences in language, communication, and varying managerial styles; complex decision-making processes; fewer promotional opportunities; personality conflicts, often resulting from stereotyping and prejudice; and greater complexity in the workplace.

Difficulty: 3: Challenging Chapter: 10 Skill: Concept LO: 10-3: To become familiar with the use of global management teams to coordinate host country and cross-border business AACSB: Interpersonal relations and teamwork 123) What are the reasons for the small numbers of female expatriates?

Answer: Acceptable norms for the professional role of women in most other cultures greatly restrict the number of job opportunities available to them. In addition, women are expected to closely adapt themselves to the cultural norms for women that exist in any particular culture.

Many cultures have much more restrictive norms for women than they do for men, making the foreign assignment appear less attractive. Perhaps the biggest hurdle, however, to females taking on expatriate assignments is the perception of management in the home country. Given some of the restrictions found in the world based on gender, and the perception that females are less interested in such assignments, management may be overlooking this important human asset.

Difficulty: 2: Moderate Chapter: 10 Skill: Concept LO: 10-4: To recognize the varying roles of women around the world in international management AACSB: Diverse and multicultural work environments

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124) Define labor relations. What are the three main dimensions of the labor-management relationship that a global manager needs to consider?

Answer: The term "labor relations" refers to the process through which managers and workers determine their workplace relationships. This process may be through verbal agreement and job descriptions, or through a union's written labor contract that has been reached through negotiation in collective bargaining between workers and managers.

The three main dimensions of the labor-management relationship that the manager will consider are: (1) the participation of labor in the affairs of the firm, especially as this affects performance and well-being; (2) the role and impact of unions in the relationship; and (3) specific humanresource policies in terms of recruitment, training, and compensation.

Difficulty: 2: Moderate Chapter: 10 Skill: Concept LO: 10-5: To understand the variations in host-country labor relations systems and the impact on the manager's job and effectiveness AACSB: Application of knowledge

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International Management, 10e, (Deresky/Miller) Chapter 11 Motivating and Leading 1) Which virtue of a job candidate would most likely be perceived as valuable by a Japanese employer?

A) unity B) a competitive nature C) individualism D) quantifiable material goals Answer: A Difficulty: 3: Challenging Chapter: 11 Skill: Concept LO: 11-1: To understand the complexity and the variables involved in cross-cultural motivation AACSB: Diverse and multicultural work environments 2) ________ suggests being motivated by more risky opportunities for variety and fast-track advancement.

A) Small power distance B) High uncertainty avoidance C) Low uncertainty avoidance D) Large power distance Answer: C Difficulty: 1: Easy Chapter: 11 Skill: Concept LO: 11-1: To understand the complexity and the variables involved in cross-cultural motivation AACSB: Diverse and multicultural work environments 3) Formal rules, structure and routine in the workplace are preferred by individuals from a culture high in ________.

A) power tolerance B) power respect C) uncertainty avoidance D) uncertainty acceptance Answer: C Difficulty: 1: Easy Chapter: 11 Skill: Concept LO: 11-1: To understand the complexity and the variables involved in cross-cultural motivation AACSB: Diverse and multicultural work environments

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4) Low power distance implies that ________.

A) people would be more likely to prefer an autocratic leadership style B) most people would be more comfortable with the traditional division of work and roles C) people would be more motivated by teamwork and relations with peers D) most people would be more comfortable with a clear distinction between managers and subordinates rather than with a blurring of decision-making responsibility Answer: C Difficulty: 1: Easy Chapter: 11 Skill: Concept LO: 11-1: To understand the complexity and the variables involved in cross-cultural motivation AACSB: Diverse and multicultural work environments 5) Which of the following is characterized by low dependence on an organization and a desire for personal time, freedom, and challenges?

A) collectivism B) democracy C) individualism D) anarchy Answer: C Difficulty: 1: Easy Chapter: 11 Skill: Concept LO: 11-1: To understand the complexity and the variables involved in cross-cultural motivation AACSB: Diverse and multicultural work environments 6) Peter comes from a culture that emphasizes hard work and promotes the entrepreneurial spirit within individuals. While he and his coworkers are encouraged to achieve their personal goals, they are also held responsible for their actions. Which of the following dimensions does this culture illustrate?

A) femininity B) individualism C) high power distance D) high uncertainty avoidance Answer: B Difficulty: 2: Moderate Chapter: 11 Skill: Concept LO: 11-1: To understand the complexity and the variables involved in cross-cultural motivation AACSB: Diverse and multicultural work environments

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7) Team cohesiveness is more likely to emerge naturally in a(n) ________ culture.

A) collectivistic B) individualistic C) uncertainty avoiding D) uncertainty accepting Answer: A Difficulty: 1: Easy Chapter: 11 Skill: Concept LO: 11-1: To understand the complexity and the variables involved in cross-cultural motivation AACSB: Diverse and multicultural work environments 8) People generally prefer significant consultation between superiors and subordinates in cultures where ________ is low.

A) power distance B) fatalism C) individualism D) self-actualization Answer: A Difficulty: 1: Easy Chapter: 11 Skill: Concept LO: 11-1: To understand the complexity and the variables involved in cross-cultural motivation AACSB: Diverse and multicultural work environments 9) Which of the following is true about collectivist cultures?

A) People place high emphasis on autonomy, opportunities for personal achievements, and a work-life balance.

B) People are motivated when they feel that the company is providing them with good working conditions, fringe benefits, and training.

C) People typically opt for high pay, personal accomplishment, and job advancement.

D) People typically opt for risky opportunities for variety and fast-track advancement.

Answer: B Difficulty: 1: Easy Chapter: 11 Skill: Concept LO: 11-1: To understand the complexity and the variables involved in cross-cultural motivation AACSB: Diverse and multicultural work environments

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10) A culture with high power distance tends to be characterized by ________.

A) inequality between superiors and subordinates B) the absence of any form of hierarchy C) power derived from hard work and entrepreneurial drive D) a preference for individualism over collectivism Answer: A Difficulty: 2: Moderate Chapter: 11 Skill: Concept LO: 11-1: To understand the complexity and the variables involved in cross-cultural motivation AACSB: Diverse and multicultural work environments 11) Organizations which have cultures that score high on ________ tend to be more hierarchical, with power deriving from prestige, force, and inheritance.

A) uncertainty avoidance B) power distance C) short-term orientation D) femininity Answer: B Difficulty: 2: Moderate Chapter: 11 Skill: Concept LO: 11-1: To understand the complexity and the variables involved in cross-cultural motivation AACSB: Diverse and multicultural work environments 12) Cultures scoring high on the dimension of ________ generally have more relaxed lifestyles in which people are more concerned about caring for others as opposed to material gain.

A) femininity B) ethnocentricity C) imperialism D) individualism Answer: A Difficulty: 2: Moderate Chapter: 11 Skill: Concept LO: 11-1: To understand the complexity and the variables involved in cross-cultural motivation AACSB: Diverse and multicultural work environments

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13) Which of the following is true about highly feminine cultures?

A) Opportunities for individual advancement and autonomy are the driving factors for people in feminine cultures.

B) People are more comfortable with the traditional division of work and roles.

C) The division of work and roles tend to be looser, motivating people through more flexible roles and work networks.

D) People are motivated by risky opportunities for variety and fast-track advancement.

Answer: C Difficulty: 1: Easy Chapter: 11 Skill: Concept LO: 11-1: To understand the complexity and the variables involved in cross-cultural motivation AACSB: Diverse and multicultural work environments 14) In which of the following countries would a merit-based reward system most likely be effective?

A) South Korea B) Taiwan C) Japan D) the United States Answer: D Difficulty: 1: Easy Chapter: 11 Skill: Concept LO: 11-1: To understand the complexity and the variables involved in cross-cultural motivation AACSB: Diverse and multicultural work environments 15) A merit-based reward system would be ineffective in Korea, Taiwan, and Japan, because such a system would most likely ________.

A) violate the traditional value system B) hinder social networking C) discourage junior employees D) hinder productivity Answer: A Difficulty: 1: Easy Chapter: 11 Skill: Concept LO: 11-1: To understand the complexity and the variables involved in cross-cultural motivation AACSB: Diverse and multicultural work environments

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16) Blackmoor Industries is an American firm that manufactures automotive parts. Blackmoor has two manufacturing facilities in the United States and one in a foreign country. Blackmoor's global managers have recently reported that they are having difficulty motivating their employees to meet various deadlines and production quotas. Which of the following undermines the argument that Blackmoor's global managers should implement a merit-based reward system to motivate individual employees?

A) Blackmoor's foreign facility is located in Korea, a country characterized by a traditional value system.

B) The employees in Blackmoor's foreign facility belong to a highly individualistic culture.

C) Blackmoor's foreign facility is located in Canada.

D) The employees in Blackmoor's foreign facility favor a democratic style of leadership.

Answer: A Difficulty: 3: Challenging Chapter: 11 Skill: Critical Thinking LO: 11-1: To understand the complexity and the variables involved in cross-cultural motivation AACSB: Diverse and multicultural work environments 17) For most people, the basic meaning of work is tied to ________.

A) self-actualization needs B) subordinateship C) group membership D) economic necessity Answer: D Difficulty: 1: Easy Chapter: 11 Skill: Concept LO: 11-1: To understand the complexity and the variables involved in cross-cultural motivation AACSB: Diverse and multicultural work environments 18) A study of average work hours in various countries conducted by Steers found that ________ worked longer hours and took fewer vacation days.

A) Koreans B) Japanese C) British D) Indonesians Answer: A Difficulty: 1: Easy Chapter: 11 Skill: Concept LO: 11-1: To understand the complexity and the variables involved in cross-cultural motivation AACSB: Diverse and multicultural work environments

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19) Blackmoor Industries is an American firm that manufactures automotive parts. The firm has several manufacturing facilities in the United States and one in a foreign country. Blackmoor's global managers have recently reported that workers in the foreign facility are more comfortable with the traditional division of work and roles. Consequently, flexible roles and work networks are unlikely to find favor in this particular facility, unlike in those spread across the United States. If the above information is true, which of the following can be fittingly inferred?

A) Blackmoor's foreign facility is located in a low uncertainty avoidance culture.

B) Blackmoor's foreign facility is located in a highly individualist culture.

C) Blackmoor's foreign facility is located in a masculine culture.

D) Blackmoor's foreign facility is located in a low power distance culture.

Answer: C Difficulty: 3: Challenging Chapter: 11 Skill: Application LO: 11-1: To understand the complexity and the variables involved in cross-cultural motivation AACSB: Analytical thinking; Diverse and multicultural work environments 20) The degree of general importance that working has in the life of an individual at any given point in time is called ________.

A) intrinsic motivation B) extrinsic motivation C) self-actualization D) work centrality Answer: D Difficulty: 1: Easy Chapter: 11 Skill: Concept LO: 11-1: To understand the complexity and the variables involved in cross-cultural motivation AACSB: Application of knowledge 21) ________ research focused on how some people are motivated by internal aspirations and life goals, whereas others are primarily motivated by the job conditions.

A) Henry Mintzberg's B) Henri Fayol's C) Abraham Maslow's D) Frederick Herzberg's Answer: D Difficulty: 1: Easy Chapter: 11 Skill: Concept LO: 11-1: To understand the complexity and the variables involved in cross-cultural motivation AACSB: Application of knowledge

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22) Which theory suggests that one set of factors affects dissatisfaction and another set affects satisfaction?

A) Hofstede's B) Maslow's C) Vroom's D) Herzberg's Answer: D Difficulty: 2: Moderate Chapter: 11 Skill: Concept LO: 11-1: To understand the complexity and the variables involved in cross-cultural motivation AACSB: Application of knowledge 23) Work centrality refers to ________.

A) the division of work roles between men and women in a given society B) the degree of general importance that working has in the life of an individual at any given point in time C) the concentration of work networks in a given region D) employee attitudes toward leaders Answer: B Difficulty: 1: Easy Chapter: 11 Skill: Concept LO: 11-1: To understand the complexity and the variables involved in cross-cultural motivation AACSB: Reflective thinking 24) Which of the following is true, according to the MOW research study on work centrality?

A) The British are indifferent to leisure.

B) The Japanese hold leisure to be very important in their lives.

C) The British hold work to be very important in their lives.

D) The Japanese hold work to be very important in their lives.

Answer: D Difficulty: 1: Easy Chapter: 11 Skill: Concept LO: 11-1: To understand the complexity and the variables involved in cross-cultural motivation AACSB: Diverse and multicultural work environments

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25) Which of the following statements is true according to the MOW research study?

A) The Japanese hold work to be of minimal significance in their lives.

B) Arabs do not take work seriously.

C) Israelis derive a higher level of interest and satisfaction from work as compared with the Germans.

D) The British regard work to be the most important aspect in their lives.

Answer: C Difficulty: 1: Easy Chapter: 11 Skill: Concept LO: 11-1: To understand the complexity and the variables involved in cross-cultural motivation AACSB: Diverse and multicultural work environments 26) In the Middle East, ________ plays a major role in all aspects of life, including work.

A) religion B) materialism C) individualism D) leisure Answer: A Difficulty: 1: Easy Chapter: 11 Skill: Concept LO: 11-1: To understand the complexity and the variables involved in cross-cultural motivation AACSB: Diverse and multicultural work environments 27) With regard to transitioning economy in Russia, Russian managers primarily emphasize ________.

A) job security B) intellectual capital C) self-esteem D) self-actualization Answer: A Difficulty: 1: Easy Chapter: 11 Skill: Concept LO: 11-1: To understand the complexity and the variables involved in cross-cultural motivation AACSB: Diverse and multicultural work environments

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28) Japanese workers are likely to ________.

A) emphasize personal goals over group-wide goals B) be motivated by materialistic rewards C) be insulted by material incentives D) emphasize individual achievement over group achievement Answer: C Difficulty: 1: Easy Chapter: 11 Skill: Concept LO: 11-1: To understand the complexity and the variables involved in cross-cultural motivation AACSB: Diverse and multicultural work environments 29) In the context of needs, Western cultures tend to focus on ________.

A) the needs of the individual B) the needs of society C) materialistic needs D) self-actualization needs Answer: A Difficulty: 1: Easy Chapter: 11 Skill: Concept LO: 11-1: To understand the complexity and the variables involved in cross-cultural motivation AACSB: Diverse and multicultural work environments 30) The task of ________ is the essence of leadership.

A) maintaining the status quo B) helping management reduce costs C) helping employees realize their highest potential in the workplace D) insulating the organization from changes in the external business environment Answer: C Difficulty: 1: Easy Chapter: 11 Skill: Concept LO: 11-2: To become familiar with the global leader's role and environment and what makes a successful global leader AACSB: Application of knowledge

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31) The critical factors necessary for successful leadership abroad have come to be known as the ________.

A) global logistics B) global mindset C) cultural diversity D) cultural quotient Answer: B Difficulty: 3: Challenging Chapter: 11 Skill: Concept LO: 11-2: To become familiar with the global leader's role and environment and what makes a successful global leader AACSB: Application of knowledge 32) Which of the following is NOT one of the typical characteristics of a successful leader with a global mindset?

A) low cultural quotient B) personal autonomy C) emotional resilience D) high flexibility Answer: A Difficulty: 3: Challenging Chapter: 11 Skill: Concept LO: 11-2: To become familiar with the global leader's role and environment and what makes a successful global leader AACSB: Application of knowledge 33) According to Javidan, which of the following qualities does not describe a leader?

A) intellectual capital B) psychological capital C) financial capital D) social capital Answer: C Difficulty: 1: Easy Chapter: 11 Skill: Concept LO: 11-2: To become familiar with the global leader's role and environment and what makes a successful global leader AACSB: Application of knowledge

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34) Peter Bonna is a senior manager in a high-technology company in the United States. He has in-depth knowledge of his company's resources and the ability to recognize and exploit market opportunities abroad. His thorough understanding of how the business and people operate at the local level in international markets makes his invaluable asset to her company. Peter is ________.

A) global business savvy B) an authoritarian leader C) an ethnocentric manager D) a self-protective leader Answer: A Difficulty: 2: Moderate Chapter: 11 Skill: Application LO: 11-2: To become familiar with the global leader's role and environment and what makes a successful global leader AACSB: Application of knowledge 35) Which of the following refers to one of the four personal development strategies, outlined by Morrison, Gregersen, and Black, through which companies and managers can meet the requirements of effective global leadership?

A) global positioning B) hiring C) training D) technology Answer: C Difficulty: 1: Easy Chapter: 11 Skill: Concept LO: 11-2: To become familiar with the global leader's role and environment and what makes a successful global leader AACSB: Application of knowledge 36) Increasingly, global companies are requiring that their managers who will progress to top management positions must ________.

A) adopt an ethnocentric approach to management B) have overseas assignment experience C) adhere to an autocratic style of leadership D) refrain from empowering subordinates Answer: B Difficulty: 1: Easy Chapter: 11 Skill: Concept LO: 11-2: To become familiar with the global leader's role and environment and what makes a successful global leader AACSB: Analytical thinking

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37) ________ involves the ability to inspire and influence the thinking, attitudes, and behavior of people anywhere in the world.

A) An ethnocentric approach to management B) Effective global leadership C) Effective repatriation D) An autocratic style of leadership Answer: B Difficulty: 1: Easy Chapter: 11 Skill: Concept LO: 11-2: To become familiar with the global leader's role and environment and what makes a successful global leader AACSB: Application of knowledge 38) Which of the following is one of the typical roles managers on international assignments must often play to enhance leadership effectiveness?

A) representative of competing firms B) manager of the local firm C) cultural representative of the host country D) cultural representative of the neighboring country Answer: B Difficulty: 3: Challenging Chapter: 11 Skill: Concept LO: 11-2: To become familiar with the global leader's role and environment and what makes a successful global leader AACSB: Application of knowledge 39) The global leader's role comprises the interaction of two sets of variables, ________.

A) the content and the context of leadership B) technology and information C) democratic leadership and autocratic leadership D) differentiation and integration Answer: A Difficulty: 1: Easy Chapter: 11 Skill: Concept LO: 11-2: To become familiar with the global leader's role and environment and what makes a successful global leader AACSB: Application of knowledge

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40) The content of leadership comprises ________.

A) community relations B) the attributes of the leader C) the level of risk faced by the leader D) the business environment Answer: B Difficulty: 1: Easy Chapter: 11 Skill: Concept LO: 11-2: To become familiar with the global leader's role and environment and what makes a successful global leader AACSB: Application of knowledge 41) The context of leadership comprises ________.

A) the business environment B) the technical knowledge of the leader C) clarity of information available in the host area D) the communication skills of the leader Answer: A Difficulty: 1: Easy Chapter: 11 Skill: Concept LO: 11-2: To become familiar with the global leader's role and environment and what makes a successful global leader AACSB: Application of knowledge 42) Which of the following is true with regard to the global leader's role?

A) Managers on international assignments try to maximize leadership effectiveness by juggling several important, and sometimes conflicting, roles.

B) The global leader's role comprises the interaction of two sets of variables, technology and information.

C) The cumulative effects of one or more weak managers hardly have a significant negative impact on the ability of the organization to meet its objectives.

D) Managers on international assignments do not represent the firm.

Answer: A Difficulty: 1: Easy Chapter: 11 Skill: Concept LO: 11-2: To become familiar with the global leader's role and environment and what makes a successful global leader AACSB: Application of knowledge

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43) Which of the following is an effect of e-business on leadership?

A) Global leaders are obliged to adopt an ethnocentric approach to management in order to check the transformation of large corporations.

B) Individual managers are obliged to adapt to the hyperspeed environment of e-business, as well as to the need for visionary leadership in a whole new set of competitive industry dynamics.

C) The pace of international business has slowed down considerably resulting in a overall decline in efficiencies.

D) The importance of rigid organizational structure has increased.

Answer: B Difficulty: 3: Challenging Chapter: 11 Skill: Concept LO: 11-2: To become familiar with the global leader's role and environment and what makes a successful global leader AACSB: Information technology 44) Which of the following does NOT accurately characterize workers in the Mexican culture?

A) They rank high on collectivism.

B) They rank high on power distance.

C) They rank low on individualism.

D) They rank low on uncertainty avoidance.

Answer: D Difficulty: 2: Moderate Chapter: 11 Skill: Concept LO: 11-3: To discuss the research on leadership and how leadership styles and practices vary around the world AACSB: Diverse and multicultural work environments 45) In Mexico, ________ are important; Mexicans are sensitive to conflict situations and need to maintain face.

A) individual objectives B) work harmony and scheduling C) timeliness and punctuality D) scheduling and time management Answer: D Difficulty: 1: Easy Chapter: 11 Skill: Concept LO: 11-3: To discuss the research on leadership and how leadership styles and practices vary around the world AACSB: Diverse and multicultural work environments

15 .

46) ________ is the most common reason(s) given by Mexican workers for absenteeism and for failing to return to work.

A) A personal illness B) A family reason C) Job dissatisfaction D) A transportation costs Answer: B Difficulty: 2: Moderate Chapter: 11 Skill: Concept LO: 11-3: To discuss the research on leadership and how leadership styles and practices vary around the world AACSB: Diverse and multicultural work environments 47) Which of the following is true with regard to Mexican workers?

A) Mexican workers prefer benefits that help to manage family-related issues.

B) Mexican workers tend to emphasize work over family.

C) The incidence of absenteeism is substantially low among Mexican workers.

D) Pure business relationships are highly regarded by Mexican workers.

Answer: A Difficulty: 1: Easy Chapter: 11 Skill: Concept LO: 11-3: To discuss the research on leadership and how leadership styles and practices vary around the world AACSB: Diverse and multicultural work environments 48) Most managers in Mexico find that the management style that works best there is ________.

A) democratic B) authoritative C) theocratic D) consultative Answer: B Difficulty: 1: Easy Chapter: 11 Skill: Concept LO: 11-3: To discuss the research on leadership and how leadership styles and practices vary around the world AACSB: Diverse and multicultural work environments

16 .

49) Which of the following is false about the Mexican culture?

A) Scheduling and time management is of secondary importance.

B) Harmony in the workplace is extremely important.

C) Employees work to live.

D) Business takes priority over family and friends.

Answer: D Difficulty: 1: Easy Chapter: 11 Skill: Concept LO: 11-3: To discuss the research on leadership and how leadership styles and practices vary around the world AACSB: Diverse and multicultural work environments 50) Which of the following is typical of the Mexican business culture?

A) flat organizational structure B) self-leadership C) resistance to change D) bottom-up decision making Answer: C Difficulty: 1: Easy Chapter: 11 Skill: Concept LO: 11-3: To discuss the research on leadership and how leadership styles and practices vary around the world AACSB: Diverse and multicultural work environments 51) Which of the following helps explain why Maslow's higher-order needs are generally not very high on most Mexican workers' lists of needs?

A) an absence of free trade zones in the country B) a low regard for family and personal relationships C) a relatively low standard of living for most workers D) a high rate of absenteeism in the maquiladoras Answer: C Difficulty: 2: Moderate Chapter: 11 Skill: Concept LO: 11-3: To discuss the research on leadership and how leadership styles and practices vary around the world AACSB: Diverse and multicultural work environments

17 .

52) Mike Norris was assigned as a business manager at an American MNC's Russian subsidiary.

In order to motivate his subordinates, Mike delegated limited authority to some of them.

However, it did not work out as he expected. Which of the following is most likely the reason behind the plan's failure?

A) Workers in Russia are less likely to use their own judgment in making decisions.

B) The Russian culture is characterized by a low power distance.

C) The Russian culture is highly individualistic in nature.

D) Workers in Russia prefer self-managed work teams.

Answer: A Difficulty: 2: Moderate Chapter: 11 Skill: Application LO: 11-3: To discuss the research on leadership and how leadership styles and practices vary around the world AACSB: Diverse and multicultural work environments 53) The continued prevalence of authoritative leadership in Russia has resulted in ________.

A) flatter organizational structures B) increased participation of employees in the decision-making process C) the dissolution of the status quo D) highly structured work systems Answer: D Difficulty: 1: Easy Chapter: 11 Skill: Concept LO: 11-3: To discuss the research on leadership and how leadership styles and practices vary around the world AACSB: Diverse and multicultural work environments 54) An employee's needs are determined largely by ________.

A) the organizational goals of the company he or she is a part of B) the cultural context of values and attitudes C) peer groups D) reference groups Answer: B Difficulty: 1: Easy Chapter: 11 Skill: Concept LO: 11-3: To discuss the research on leadership and how leadership styles and practices vary around the world AACSB: Diverse and multicultural work environments

18 .

55) Rewarding the individual is frowned upon in ________ because it encourages competition rather than the desired group cooperation.

A) Taiwan B) the United States C) Canada D) Japan Answer: D Difficulty: 1: Easy Chapter: 11 Skill: Concept LO: 11-3: To discuss the research on leadership and how leadership styles and practices vary around the world AACSB: Diverse and multicultural work environments 56) Which of the following is NOT one of the typical reward categories in the United States?

A) career advancement B) cultural C) financial D) social status Answer: B Difficulty: 1: Easy Chapter: 11 Skill: Concept LO: 11-3: To discuss the research on leadership and how leadership styles and practices vary around the world AACSB: Application of knowledge 57) Which of the following is considered to be an incentive in China and gives workers more power?

A) training B) alignment with participatory style of leadership C) low risk aversion D) networking Answer: A Difficulty: 1: Easy Chapter: 11 Skill: Concept LO: 11-3: To discuss the research on leadership and how leadership styles and practices vary around the world AACSB: Diverse and multicultural work environments

19 .

58) The ________ model of leadership style has been recommended by American research studies as the one more likely to have positive results with most U.S. employees.

A) autocratic B) authoritarian C) self-protective D) participative Answer: D Difficulty: 1: Easy Chapter: 11 Skill: Concept LO: 11-3: To discuss the research on leadership and how leadership styles and practices vary around the world AACSB: Application of knowledge 59) Modern leadership theory recognizes that ________.

A) no single leadership style works well in all situations B) the charismatic style of leadership works well in all situations C) the democratic style of leadership works well in all situations D) the democratic, or participative, leadership style is less likely to have positive results with U.S. employees Answer: A Difficulty: 1: Easy Chapter: 11 Skill: Concept LO: 11-4: To understand the variables that necessitate contingency leadership: culture, context, people, and situations AACSB: Application of knowledge 60) Which of the following is a negatively regarded trait of a leader?

A) effective bargainer B) authoritative C) participative D) dictatorial Answer: D Difficulty: 1: Easy Chapter: 11 Skill: Concept LO: 11-4: To understand the variables that necessitate contingency leadership: culture, context, people, and situations AACSB: Analytical thinking

20 .

61) Which of the following traits is considered an impediment to leadership effectiveness according to the GLOBE Project?

A) dictatorial B) individualistic C) status-conscious D) self-sacrificial Answer: A Difficulty: 1: Easy Chapter: 11 Skill: Concept LO: 11-4: To understand the variables that necessitate contingency leadership: culture, context, people, and situations AACSB: Application of knowledge 62) A visionary leader who inspires subordinates and is performance-oriented would be best described as a(n) ________ leader.

A) charismatic B) autocratic C) dictatorial D) self-protective Answer: A Difficulty: 1: Easy Chapter: 11 Skill: Concept LO: 11-4: To understand the variables that necessitate contingency leadership: culture, context, people, and situations AACSB: Application of knowledge 63) A team-oriented leader is someone who ________.

A) asserts the interests of the team over larger organizational goals B) exhibits diplomatic, integrative, and collaborative behaviors toward the team C) who lacks compassion for subordinates D) is self-centered, conflictual, and status conscious Answer: B Difficulty: 1: Easy Chapter: 11 Skill: Concept LO: 11-4: To understand the variables that necessitate contingency leadership: culture, context, people, and situations AACSB: Application of knowledge

21 .

64) The ________ dimension describes a leader who is self-centered, conflictual, and status conscious.

A) humane B) team-oriented C) participative D) self-protective Answer: D Difficulty: 1: Easy Chapter: 11 Skill: Concept LO: 11-4: To understand the variables that necessitate contingency leadership: culture, context, people, and situations AACSB: Application of knowledge 65) The ________ leader is one who delegates decision making and encourages subordinates to take responsibility.

A) charismatic B) autocratic C) participative D) self-protective Answer: C Difficulty: 1: Easy Chapter: 11 Skill: Concept LO: 11-4: To understand the variables that necessitate contingency leadership: culture, context, people, and situations AACSB: Application of knowledge 66) According to the GLOBE Project, being a participative leader is regarded as more important in ________.

A) Brazil B) Egypt C) Indonesia D) Mexico Answer: A Difficulty: 1: Easy Chapter: 11 Skill: Concept LO: 11-4: To understand the variables that necessitate contingency leadership: culture, context, people, and situations AACSB: Application of knowledge

22 .

67) Employees in countries that rank high on power distance are more likely to prefer a(n) ________.

A) autocratic leadership style B) participative leadership style C) charismatic leadership style D) consultative leadership style Answer: A Difficulty: 1: Easy Chapter: 11 Skill: Concept LO: 11-4: To understand the variables that necessitate contingency leadership: culture, context, people, and situations AACSB: Application of knowledge 68) Employees in countries that rank low on power distance are more likely to prefer a(n) ________ style.

A) autocratic leadership B) participative leadership C) self-protective leadership D) authoritarian leadership Answer: B Difficulty: 1: Easy Chapter: 11 Skill: Concept LO: 11-4: To understand the variables that necessitate contingency leadership: culture, context, people, and situations AACSB: Application of knowledge 69) Hofstede's research on leadership reflects the values of ________.

A) superiors B) the top management C) born globals D) subordinates Answer: D Difficulty: 1: Easy Chapter: 11 Skill: Concept LO: 11-4: To understand the variables that necessitate contingency leadership: culture, context, people, and situations AACSB: Application of knowledge

23 .

70) Workers in a high power-distance society like Mexico are more likely to prefer ________.

A) managers, who encourage the increased involvement of subordinates in the decision-making process B) clear distinctions between managers and subordinates C) managers, who exhibit a democratic style of leadership D) a flat organizational structure Answer: B Difficulty: 1: Easy Chapter: 11 Skill: Concept LO: 11-4: To understand the variables that necessitate contingency leadership: culture, context, people, and situations AACSB: Diverse and multicultural work environments 71) Having which of the following traits is universally considered to facilitate leadership effectiveness?

A) visionary B) self-protective C) autocratic D) malevolent Answer: A Difficulty: 1: Easy Chapter: 11 Skill: Concept LO: 11-4: To understand the variables that necessitate contingency leadership: culture, context, people, and situations AACSB: Application of knowledge 72) Employees in countries that rank low on power distance (Sweden and Israel) are more likely to ________.

A) adopt a collectivist mindset B) not be involved in the decision-making process C) participate in problem solving D) be "fed" all the answers by their superiors Answer: C Difficulty: 1: Easy Chapter: 11 Skill: Concept LO: 11-4: To understand the variables that necessitate contingency leadership: culture, context, people, and situations AACSB: Diverse and multicultural work environments

24 .

73) Which of the following refers to a cultural variable that shapes the content of a leadership situation?

A) elasticity of demand B) level of risk C) productivity D) work norms Answer: D Difficulty: 1: Easy Chapter: 11 Skill: Concept LO: 11-4: To understand the variables that necessitate contingency leadership: culture, context, people, and situations AACSB: Analytical thinking 74) According to the contingency theory of leadership, international managers ________.

A) must try to enforce the parent-country norms across foreign subsidiaries B) must adjust their leadership behaviors according to the context, norms, attitudes, and other variables in the host country C) must rigidly conform to the motivational theories and practices of the parent country D) must not link performance with reward Answer: B Difficulty: 1: Easy Chapter: 11 Skill: Concept LO: 11-4: To understand the variables that necessitate contingency leadership: culture, context, people, and situations AACSB: Application of knowledge 75) People with high uncertainty avoidance are motivated by less risky opportunities for variety and fast-track advancement.

Answer: TRUE Difficulty: 1: Easy Chapter: 11 Skill: Concept LO: 11-1: To understand the complexity and the variables involved in cross-cultural motivation AACSB: Diverse and multicultural work environments 76) People in countries with a high level of national collectivism are more likely to be motivated by opportunities for organization.

Answer: TRUE Difficulty: 1: Easy Chapter: 11 Skill: Concept LO: 11-1: To understand the complexity and the variables involved in cross-cultural motivation AACSB: Diverse and multicultural work environments

25 .

77) People in collectivist cultures are given freedom to focus on personal goals.

Answer: FALSE Difficulty: 1: Easy Chapter: 11 Skill: Concept LO: 11-1: To understand the complexity and the variables involved in cross-cultural motivation AACSB: Diverse and multicultural work environments 78) A culture with low power distance tends to be characterized by considerable inequality between superiors and subordinates.

Answer: FALSE Difficulty: 1: Easy Chapter: 11 Skill: Concept LO: 11-1: To understand the complexity and the variables involved in cross-cultural motivation AACSB: Diverse and multicultural work environments 79) In individualistic cultures, employees typically value their autonomy, and are likely to be motivated by fringe benefits and training provided by the employer.

Answer: FALSE Difficulty: 1: Easy Chapter: 11 Skill: Concept LO: 11-1: To understand the complexity and the variables involved in cross-cultural motivation AACSB: Diverse and multicultural work environments 80) Tactful managers consciously avoid an ethnocentric attitude and they do not make negative value judgments about a person's level of motivation because it differs from their own.

Answer: TRUE Difficulty: 1: Easy Chapter: 11 Skill: Concept LO: 11-1: To understand the complexity and the variables involved in cross-cultural motivation AACSB: Diverse and multicultural work environments 81) Low power distance implies that people would be more motivated by teamwork and relations with peers.

Answer: TRUE Difficulty: 1: Easy Chapter: 11 Skill: Concept LO: 11-1: To understand the complexity and the variables involved in cross-cultural motivation AACSB: Diverse and multicultural work environments

26 .

82) The degree of general importance that working has in the life of an individual at any given point in time is known as work centrality.

Answer: TRUE Difficulty: 1: Easy Chapter: 11 Skill: Concept LO: 11-1: To understand the complexity and the variables involved in cross-cultural motivation AACSB: Diverse and multicultural work environments 83) Managers around the world have similar needs but show differing levels of satisfaction of those needs derived from their jobs.

Answer: TRUE Difficulty: 1: Easy Chapter: 11 Skill: Concept LO: 11-1: To understand the complexity and the variables involved in cross-cultural motivation AACSB: Diverse and multicultural work environments 84) In Thailand, the Thais call work ngan, which is the same as the Thai word for "play," and they tend to introduce periods of play in their workdays.

Answer: TRUE Difficulty: 1: Easy Chapter: 11 Skill: Concept LO: 11-1: To understand the complexity and the variables involved in cross-cultural motivation AACSB: Diverse and multicultural work environments 85) Koreans' hard work ethic is attributable to loyalty to the company, group-oriented achievement, and emphasis on group harmony and business relationships.

Answer: TRUE Difficulty: 1: Easy Chapter: 11 Skill: Concept LO: 11-1: To understand the complexity and the variables involved in cross-cultural motivation AACSB: Diverse and multicultural work environments 86) The British hold work to be very important in their lives; the Japanese, on the other hand seem to enjoy their leisure time.

Answer: FALSE Difficulty: 1: Easy Chapter: 11 Skill: Concept LO: 11-1: To understand the complexity and the variables involved in cross-cultural motivation AACSB: Diverse and multicultural work environments

27 .

87) The Islamic work ethic is a commitment toward fulfillment, so business motives are held in the highest regard.

Answer: TRUE Difficulty: 1: Easy Chapter: 11 Skill: Concept LO: 11-1: To understand the complexity and the variables involved in cross-cultural motivation AACSB: Diverse and multicultural work environments 88) Studies have shown Arabs are serious about their work and that favoritism have no place in the Arab workplace, however. Japanese and Americans, consider friendship to be an integral part of the workplace.

Answer: TRUE Difficulty: 1: Easy Chapter: 11 Skill: Concept LO: 11-1: To understand the complexity and the variables involved in cross-cultural motivation AACSB: Diverse and multicultural work environments 89) In Mexico, the manager is regarded as el patrón or the mother figure, whose role it is to take care of the workers as an extended family.

Answer: FALSE Difficulty: 1: Easy Chapter: 11 Skill: Concept LO: 11-1: To understand the complexity and the variables involved in cross-cultural motivation AACSB: Diverse and multicultural work environments 90) In Mexico, a daily incentive system with automatic payouts for production exceeding quotas, as well as daily/monthly attendance bonuses, works well.

Answer: TRUE Difficulty: 1: Easy Chapter: 11 Skill: Concept LO: 11-1: To understand the complexity and the variables involved in cross-cultural motivation AACSB: Diverse and multicultural work environments 91) Many Hong Kong Chinese believe that outcomes are determined by joss.

Answer: TRUE Difficulty: 1: Easy Chapter: 11 Skill: Concept LO: 11-1: To understand the complexity and the variables involved in cross-cultural motivation AACSB: Diverse and multicultural work environments

28 .

92) The global mindset of successful leaders is characterized by personal autonomy and emotional resilience.

Answer: TRUE Difficulty: 1: Easy Chapter: 11 Skill: Concept LO: 11-2: To become familiar with the global leader's role and environment and what makes a successful global leader AACSB: Application of knowledge 93) Global business savvy refers to the inability to recognize global market opportunities for a company and to have a vision of doing business worldwide.

Answer: FALSE Difficulty: 1: Easy Chapter: 11 Skill: Concept LO: 11-2: To become familiar with the global leader's role and environment and what makes a successful global leader AACSB: Application of knowledge 94) The context of leadership comprises the attributes of the leader and the decisions to be made.

Answer: FALSE Difficulty: 1: Easy Chapter: 11 Skill: Concept LO: 11-2: To become familiar with the global leader's role and environment and what makes a successful global leader AACSB: Application of knowledge 95) The content of leadership comprises all those variables related to the particular situation.

Answer: FALSE Difficulty: 1: Easy Chapter: 11 Skill: Concept LO: 11-2: To become familiar with the global leader's role and environment and what makes a successful global leader AACSB: Application of knowledge 96) The leader's role at all levels is rapidly changing along with each new technological development.

Answer: TRUE Difficulty: 1: Easy Chapter: 11 Skill: Concept LO: 11-2: To become familiar with the global leader's role and environment and what makes a successful global leader AACSB: Information technology 29 .

97) The autocratic leader is one who delegates decision making and encourages subordinates to take responsibility.

Answer: FALSE Difficulty: 1: Easy Chapter: 11 Skill: Concept LO: 11-2: To become familiar with the global leader's role and environment and what makes a successful global leader AACSB: Application of knowledge 98) The Mexican culture, generally, is "doing-oriented," compared to the "being-oriented" culture that prevails in the rest of North America.

Answer: FALSE Difficulty: 1: Easy Chapter: 11 Skill: Concept LO: 11-3: To discuss the research on leadership and how leadership styles and practices vary around the world AACSB: Diverse and multicultural work environments 99) Most managers in Mexico find that the management style that works best there is authoritative and paternal.

Answer: TRUE Difficulty: 1: Easy Chapter: 11 Skill: Concept LO: 11-3: To discuss the research on leadership and how leadership styles and practices vary around the world AACSB: Diverse and multicultural work environments 100) In the Mexican culture, workers expect managers to delegate authority and encourage participation.

Answer: FALSE Difficulty: 1: Easy Chapter: 11 Skill: Concept LO: 11-3: To discuss the research on leadership and how leadership styles and practices vary around the world AACSB: Diverse and multicultural work environments

30 .

101) In China low wage rates are compensated for by free housing, schools, and medical care.

Answer: TRUE Difficulty: 1: Easy Chapter: 11 Skill: Concept LO: 11-3: To discuss the research on leadership and how leadership styles and practices vary around the world AACSB: Diverse and multicultural work environments 102) In the United States, rewards usually fall into five categories: financial, social status, job content, career, and professional.

Answer: TRUE Difficulty: 1: Easy Chapter: 11 Skill: Concept LO: 11-3: To discuss the research on leadership and how leadership styles and practices vary around the world AACSB: Diverse and multicultural work environments 103) The critical factors necessary for successful leadership abroad have come to be known as the global mindset.

Answer: TRUE Difficulty: 1: Easy Chapter: 11 Skill: Concept LO: 11-3: To discuss the research on leadership and how leadership styles and practices vary around the world AACSB: Application of knowledge 104) Employees in countries that rank high on power distance are more likely to prefer a more authoritative leadership style.

Answer: TRUE Difficulty: 1: Easy Chapter: 11 Skill: Concept LO: 11-4: To understand the variables that necessitate contingency leadership: culture, context, people, and situations AACSB: Diverse and multicultural work environments

31 .

105) The contingency theory of leadership requires the managers to adjust their leadership behaviors according to the context, norms, attitudes, and other variables in that society.

Answer: TRUE Difficulty: 1: Easy Chapter: 11 Skill: Concept LO: 11-4: To understand the variables that necessitate contingency leadership: culture, context, people, and situations AACSB: Diverse and multicultural work environments 106) In Brazil, for example, one can conclude that an effective leader is expected to be very charismatic, team-oriented and participative, and relatively humane but not autonomous.

Answer: TRUE Difficulty: 1: Easy Chapter: 11 Skill: Application LO: 11-4: To understand the variables that necessitate contingency leadership: culture, context, people, and situations AACSB: Diverse and multicultural work environments 107) Employees in countries that rank low on power distance are more likely to prefer an autocratic leadership style, and they expect superiors to adhere to that style.

Answer: FALSE Difficulty: 1: Easy Chapter: 11 Skill: Application LO: 11-4: To understand the variables that necessitate contingency leadership: culture, context, people, and situations AACSB: Diverse and multicultural work environments 108) Employees in countries that rank high on power distance are more comfortable with a clear distinction between managers and subordinates rather than with a blurring of decision-making responsibility.

Answer: TRUE Difficulty: 1: Easy Chapter: 11 Skill: Application LO: 11-4: To understand the variables that necessitate contingency leadership: culture, context, people, and situations AACSB: Diverse and multicultural work environments

32 .

109) In the Middle East little delegation occurs, so a successful company there must have weak managers who make all the decisions.

Answer: FALSE Difficulty: 1: Easy Chapter: 11 Skill: Application LO: 11-4: To understand the variables that necessitate contingency leadership: culture, context, people, and situations AACSB: Diverse and multicultural work environments 110) Employees in countries that tank low on power distance (Sweden and Israel) are more likely to prefer a consultative, participative leadership style, and they expect superiors to adhere to that style.

Answer: TRUE Difficulty: 2: Moderate Chapter: 11 Skill: Application LO: 11-4: To understand the variables that necessitate contingency leadership: culture, context, people, and situations AACSB: Diverse and multicultural work environments 111) Using Hofstede's culture dimensions, what general assumptions can be made about motivation based on a culture's level of (1) uncertainty avoidance; (2) power distance; (3) individualism; and (4) masculinity?

Answer: In high uncertainty avoidance cultures, there is a need for job security. However, in cultures with low uncertainty avoidance, people would probably be motivated by more risky opportunities for variety and fast track advancement.

In high power distance cultures, suggests motivators in the relationship between subordinates and a boss. But in low power distance cultures, people tend to be more motivated by teamwork and relations with peers.

In high individualism (low collectivism) cultures, people tend to be motivated by opportunities for individual advancement and autonomy. However, in low individualism (high collectivism) cultures people tend to be motivated by appealing to group goals and support.

In high masculinity (low femininity) cultures, most people would be motivated with the traditional division of work and roles, but in low masculinity (high femininity) cultures, people may be inclined to be motivated through more flexible roles and work networks.

Difficulty: 2: Moderate Chapter: 11 Skill: Application LO: 11-1: To understand the complexity and the variables involved in cross-cultural motivation AACSB: Application of knowledge

33 .

112) What is the difference between masculine and feminine cultures? What does recent research reveal about masculine and feminine cultures?

Answer: High masculinity suggests that most people would be more comfortable with the traditional division of work and roles; in a more feminine culture, the boundaries could be looser, motivating people through more flexible roles and work networks.

Based on Hofstede's dimensions of individualism and masculinity, more recent research was conducted by Gelade, Dobson, and Auer. The findings based on the masculinity dimension showed that the higher the level of "masculinity" (such as in Japan and Mexico), the more motivated employees were by being given opportunities for high pay, personal accomplishment, and job advancement.

This compared with those from more "feminine" cultures (such as in Denmark and Sweden), who claimed that factors related to their relationships with their managers and coworkers provided more commitment to the organization.

Difficulty: 2: Moderate Chapter: 11 Skill: Concept LO: 11-1: To understand the complexity and the variables involved in cross-cultural motivation AACSB: Diverse and multicultural work environments

34 .

113) Define work centrality. Highlight the most valuable insights provided by the Meaning of Work (MOW) research team about the value of work.

Answer: Work centrality is defined as "the degree of general importance that working has in the life of an individual at any given point in time."

Studies on the meaning of work in eight countries were carried out by George England and a group of researchers who are called the Meaning of Work (MOW) International Research Team.

Their research sought to determine a person's idea of the relative importance of work compared to that of leisure, community, religion, and family.

The results showed, for example, that the Japanese hold work to be very important in their lives; the Brits, on the other hand, seem to like their leisure time more than those in the other countries surveyed. However, given the complexity of cultural and economic variables involved in people's attitude toward work, the results are difficult to generalize, in particular as concerns the implications of on-the-job work motivation. More relevant to managers (as an aid to understanding culture-based differences in motivation) are the specific reasons for valuing work.

What kinds of needs does the working environment satisfy, and how does that psychological contract differ among populations?

The MOW research team provided some excellent insights into this question when it asked people in the eight countries what they value about work and what needs are satisfied by their jobs. Their research results showed the relative order of importance overall as follows: 1. A needed income 2. Interest and satisfaction 3. Contacts with others 4. A way to serve society 5. A means of keeping occupied 6. Status and prestige.

Difficulty: 2: Moderate Chapter: 11 Skill: Concept LO: 11-1: To understand the complexity and the variables involved in cross-cultural motivation AACSB: Diverse and multicultural work environments

35 .

114) Briefly describe the personal work style of a leader with a global mindset. What comprises a global leader's role?

Answer: A leader with a global mindset is open-minded, a team player in a global matrix, and an effective cross-cultural communicator and collaborator.

The leader's role comprises the interaction of two sets of variables—the content and the context of leadership. The content of leadership comprises the attributes of the leader and the decisions to be made; the context of leadership comprises of all those variables related to the particular situation. The increased number of variables (political, economic, and cultural) in the context of the managerial job abroad requires astute leadership. The multicultural leader's role blends leadership, communication, motivation, and other managerial skills within unique and everchanging environments.

Difficulty: 2: Moderate Chapter: 11 Skill: Concept LO: 11-2: To become familiar with the global leader's role and environment and what makes a successful global leader AACSB: Analytical thinking 115) What three major qualities do leaders tend to have if they possess a global mindset?

Answer: In terms of qualities, leaders with a global mindset tend to possess high intellectual capital, which reflects the general knowledge and capacity to learn, including savviness for global business. Moreover, they possess a high level of psychological capital, which reflects the openness to differences and capacity to change. Lastly, they possess a high level of social capital, which captures the ability to build trusting relationships with a diverse group of people, and a sense of intercultural empathy and diplomacy.

Difficulty: 2: Moderate Chapter: 11 Skill: Application LO: 11-2: To become familiar with the global leader's role and environment and what makes a successful global leader AACSB: Application of knowledge 116) What personal work styles do leaders tend to have if they possess a global mindset?

Answer: Leaders with a global mindset tend to have a high "cultural quotient" (CQ). They tend to be open minded and flexible as well as effective as cross cultural communicators and collaborative. Leaders with a global mindset also tend to be effective team players in a global matrix and supports global objectives and balances global with local goals and practices.

Difficulty: 2: Moderate Chapter: 11 Skill: Application LO: 11-2: To become familiar with the global leader's role and environment and what makes a successful global leader AACSB: Application of knowledge

36 .

117) In the Mexican culture, family and relationships are highly valued. How does this cultural norm affect work and business in Mexico?

Answer: In Mexico the family is of central importance; loyalty and commitment to family and friends frequently determine employment, promotion, or special treatment for contracts.

Decisions and actions are usually based on what is good for the family and the group.

Unfortunately, it is this admirable cultural norm that often results in motivation and productivity problems on the job by contributing to very high absenteeism and turnover, especially in the maquiladoras. This high turnover and absenteeism are costly to employers, thereby offsetting the advantage of the relatively low labor cost per hour. "Family reasons" (taking care of sick relatives or elderly parents) are the most common reasons given for absenteeism and for failing to return to work. Workers often simply do not come back to work after vacations or holidays.

For many Mexican males, the value of work lies primarily in its ability to fulfill their culturally imposed responsibilities as head of the household and breadwinner rather than to seek individual achievement.

Difficulty: 2: Moderate Chapter: 11 Skill: Concept LO: 11-3: To discuss the research on leadership and how leadership styles and practices vary around the world AACSB: Diverse and multicultural work environments 118) What does effective global leadership entail? What are the different roles that managers on international assignments often assume to enhance leadership effectiveness?

Answer: Effective global leadership entails the ability to inspire and influence the thinking, attitudes, and behavior of people anywhere in the world. The importance of the leadership role cannot be overemphasized, because the leader's interactions strongly influence the motivation and behavior of employees, and ultimately, the entire climate of the organization. The cumulative effects of one or more weak managers can have a significant negative impact on the ability of the organization to meet its objectives.

Managers on international assignments try to maximize leadership effectiveness by juggling several important, and sometimes conflicting, roles as: (1) a representative of the parent firm, (2) the manager of the local firm, (3) a resident of the local community, (4) a citizen of either the host country or of another country, (5) a member of a profession, and (6) a member of a family.

Difficulty: 3: Challenging Chapter: 11 Skill: Concept LO: 11-4: To understand the variables that necessitate contingency leadership: culture, context, people, and situations AACSB: Diverse and multicultural work environments

37 .

119) List the leadership styles and behaviors found to be culturally contingent according to the GLOBE research program. Briefly describe each leadership style.

Answer: Research by the Global Leadership and Organizational Behavior Effectiveness (GLOBE) research program comprised a network of 170 social scientists and management scholars from 62 countries for the purpose of understanding the impact of cultural variables on leadership and organizational processes.

Those leadership styles and behaviors found to be culturally contingent are: charismatic, teamoriented, self-protective, participative, humane, and autonomous.

The charismatic leader shown in this research is someone who is, for example, a visionary—an inspiration to subordinates and performance-oriented. A team-oriented leader is someone who exhibits diplomatic, integrative, and collaborative behaviors toward the team. The self-protective dimension describes a leader who is self-centered, conflictual, and status conscious. The participative leader is one who delegates decision making and encourages subordinates to take responsibility. Humane leaders are those who show compassion to their employees. An autonomous leader is, as expected, an individualist, so countries that ranked participation as important tended to rank autonomy in leadership as relatively unimportant.

Difficulty: 3: Challenging Chapter: 11 Skill: Concept LO: 11-4: To understand the variables that necessitate contingency leadership: culture, context, people, and situations AACSB: Application of knowledge

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