Business in Emerging Markets Exam Review
Course Introduction
This course explores the unique opportunities and challenges of conducting business in emerging markets, focusing on dynamic economies across Asia, Africa, Latin America, and Eastern Europe. Students will examine factors influencing growth and investment, including political, economic, cultural, and regulatory environments. The curriculum covers strategic entry modes, risk assessment, local adaptation, and the role of innovation in competitive advantage. Case studies and current events are used to analyze real-world examples, preparing students to develop effective business strategies for rapidly changing international markets.
Recommended Textbook
International Business Environments Operations 14th Edition by John Daniels
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20 Chapters
1998 Verified Questions
1998 Flashcards
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Page 2
Chapter 1: Globalization and International Business
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Sample Questions
Q1) A foreign direct investment occurs when ________.
A) a company owns at least 25% of a foreign firm
B) a company has a controlling interest in a foreign company
C) foreign ownership is in private rather than government securities
D) a foreign firm agrees to a licensing agreement with a large conglomerate
Answer: B
Q2) The broadening set of interdependent relationships among people from different parts of the world is known as ________.
A) globalization
B) offshoring
C) franchising
D) outsourcing
Answer: A
Q3) A major criticism of offshoring is that it ________.
A) increases production costs
B) exchanges good jobs for bad jobs
C) threatens the sovereignty of larger countries
D) allows companies to avoid payment of any taxes
Answer: B
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Page 3
Chapter 2: The Cultural Environments Facing Business
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Q1) Although English is referred to as the "international language of business,"________.
A) it is less frequently used than French in international business
B) there is a growing disagreement over which version of English to use, e.g. British, American, or Australian
C) companies headquartered outside English-speaking countries all use their official language as their operating language
D) monolingual English speakers may experience more difficulty in the future in communicating on a worldwide basis
Answer: D
Q2) The attempt to resolve small issues before principles is a characteristic of which of the following?
A) relativism
B) monochronic behavior
C) pragmatism
D) uncertainty avoidance
Answer: C
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Page 4
Chapter 3: The Political and Legal Environments Facing Business
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Sample Questions
Q1) Proponents of ________ argue that individual interests are not as important as the welfare of the group.
A) pluralism
B) capitalism
C) collectivism
D) individualism
Answer: C
Q2) Which of the following is most likely a characteristic of a "partly free" country,such as Guatemala,Kenya,or Malaysia?
A) strict religious constraints
B) fair election procedures
C) respect for civil liberties
D) weak rule of law
Answer: D
Q3) A political ideology is the collection of ideas that expresses the goals,theories,and aims that constitute a sociopolitical program.
A)True
B)False
Answer: True
Page 5
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Chapter 4: The Economic Environments Facing Businesses
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Q1) During a time of reflation,the government is most likely to ________.
A) lower taxes
B) print money
C) reduce interest rates
D) support infrastructure
Q2) The balance of trade records is a record of a country's international transactions that take place among companies,governments,or individuals.
A)True
B)False
Q3) In response to the global credit crisis,the United States government took actions that increased economic freedom.
A)True
B)False
Q4) Country X has a significant amount of external debt. Which of the following is the most likely cause?
A) The government of Country X borrowed money from local banks.
B) The government of Country X borrowed money from other governments.
C) The government of Country X spent more than it collected in revenues.
D) The government of Country X received short-term credits from selling bonds.
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Chapter 5: Globalization and Society
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Q1) What is the primary reason that Anglo American PLC developed its ART program?
A) comply with government standards
B) maintain a healthy workforce
C) abide by union demands
D) reduce employee benefits
Q2) The Ethical Trading Initiative (ETI)is primarily focused on ________.
A) fair trade laws for undeveloped countries
B) tiered pricing by pharmaceutical firms
C) greenhouse gas emission reduction
D) employment practices of MNEs
Q3) A manager practicing relativism would most likely ________.
A) adapt to local conditions instead of implementing home-country practices
B) enforce home-country laws on host-country employees and suppliers
C) refuse to change company policies and procedures to comply with local norms
D) apply universal laws to each country despite local customs and traditions
Q4) According to the Ethical Trading Initiative,child labor cannot be used unless there are no suitable alternatives for employees.
A)True
B)False
Q5) What is extraterritoriality? Why is the concept controversial?
Page 7
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Chapter 6: International Trade and Factor Mobility Theory
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Sample Questions
Q1) Which of the following is the LEAST likely result of outward migration?
A) Emigrants remit capital used to start businesses in their home countries.
B) Nations receive more foreign aid.
C) Nations lose highly educated and productive workers.
D) Countries receive remittances from emigrants.
Q2) Trade occurs more between culturally dissimilar countries than between culturally similar countries.
A)True
B)False
Q3) The finite nature of natural resources should work as a disadvantage for the export prices of developing countries.
A)True
B)False
Q4) The most internationally mobile factor of production is ________.
A) labor
B) management
C) long-term capital
D) short-term capital
Q5) What are the arguments for and against nations developing and implementing strategic trade policies?
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Chapter 7: Governmental Influence on Trade
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Q1) When customs officials set a value on which to place an import tariff,they ordinarily use the declared invoice price unless they doubt its authenticity.
A)True
B)False
Q2) The infant-industry argument for trade protection holds that an industry needs government protection from imports until it becomes competitive enough in world markets.
A)True
B)False
Q3) People who argue for lifting the U.S. trade embargo with Cuba claim all of the following EXCEPT which one?
A) The embargo has not achieved its purpose of changing Cuba's economic and political system
B) U.S. companies lose Cuban sales to competitors from other countries.
C) Increased exposure to the United States would be a more effective force of change.
D) Cuba has largely become a market economy already.
Q4) What are the main arguments for limiting trade in services? What is your opinion on limiting trade in services?
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9
Chapter 8: Cross-National Cooperation and Agreements
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Q1) The EU organization that provides political leadership,drafts laws,and runs the daily programs of the EU is the ________.
A) European Commission
B) Council of Ministers
C) European Parliament
D) European Central Bureaucracy
Q2) NAFTA is an example of a common market.
A)True
B)False
Q3) The 27 member EU negotiates trade agreements as one. The EU and Brazil have negotiated a strategic trade alliance which is an example of a ________.
A) customs union
B) global free trade agreement
C) bilateral agreement
D) multilateral agreement
Q4) The European Union is an example of regional integration.
A)True
B)False
Q5) Are commodity agreements effective? Why or why not?
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Chapter 9: Global Foreign-Exchange Markets
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Sample Questions
Q1) Which of the following is NOT one of the top exchanges that trade in foreign currency futures and options?
A) CME
B) UBS
C) NYSE Liffe
D) NASDAQ OMX
Q2) An irrevocable letter of credit ________.
A) is issued by a global credit agency
B) is the basis for multilateral credit netting
C) can be amended only if all parties involved agree
D) obligates the exporter's bank to pay interest to the importer
Q3) A(n)________ is the price of a currency.
A) tariff
B) quota
C) exchange rate
D) subsidy
Q4) The U.S. dollar is important as a vehicle for foreign exchange transactions between two countries other than the United States.
A)True
B)False
Page 11
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Chapter 10: The Determination of Exchange Rates
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Q1) An MNE would most likely benefit from converting local currency into its home-country currency when exchange rates are most favorable so it can maximize its return.
A)True
B)False
Q2) Fundamental forecasting uses trends in economic variables to predict future rates.
A)True
B)False
Q3) Tanya is a manager at a global firm that has operations located in Brazil,India,and Japan. Tanya is in the process of making a fundamental analysis in order to forecast exchange rates in each country. Which of the following questions is most relevant to Tanya?
A) What is the cyclical situation in terms of employment and inflation?
B) Are the government's intervention practices sustainable?
C) What level of credibility does the government have?
D) What is the possibility of a national crisis?
Q4) The IMF's primary role is to identify exchange rate regimes.
A)True
B)False
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Chapter 11: The Strategy of International Business
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Sample Questions
Q1) A multidomestic strategy makes the most sense for companies that see high pressures for local responsiveness and low pressures for cost reductions.
A)True
B)False
Q2) Firms that compete in the global marketplace typically face the asymmetric forces of pressures for ________ and ________.
A) global integration; local responsiveness
B) price reductions; cost reductions
C) politically sensitivity; market leadership
D) cost reductions; customer satisfaction
Q3) Which of the following is the primary limitation of the transnational strategy?
A) poor local adaptation
B) cross-unit coordination difficulties
C) duplication of subsidiary activities
D) inability to leverage core competencies
Q4) What is the relationship between the five-forces model and a firm's international business strategy? Provide examples to illustrate your answer.
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Chapter 12: Country Evaluation and Selection
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Sample Questions
Q1) Which of the following best explains why foreign subsidiary managers are often reluctant to propose divestments in the countries where they are working?
A) They are afraid of proposing the elimination of their jobs.
B) They are usually poorly trained in how to sell units or how to close them down.
C) They are too nationalistic to examine political risk objectively.
D) Many are in countries where the cultural attribute of power-distance is very high.
Q2) Sales expansion is probably the most important variable in determining international location decisions. This statement is most likely based on the assumption that ________.
A) consumer demand exceeds supply
B) increased sales will lead to more profits
C) the company will have a first-mover advantage
D) raw materials are available in the country targeted for sales
Q3) When income inequality is high in a specific country,the per capita GDP figures are more meaningful.
A)True
B)False
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14
Chapter 13: Export and Import
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Sample Questions
Q1) An Australian company makes athletic wear for women,men,and adults. After several years of successfully exporting its products to the U.K. and the U.S.,the company began exporting to Japan. This is an example of ________.
A) a born-global company
B) a location advantage
C) third-party exporting
D) incremental internationalization
Q2) Which of the following is usually NOT a factor that triggers companies to look to exports to boost total sales?
A) maturity of the domestic market
B) potential to leverage core competencies in foreign markets
C) social needs in developing countries
D) response to the market entry of a foreign rival
Q3) According to the research described in your text,which of the following is among the factors that would increase a firm's probability of exporting?
A) low domestic productivity
B) high domestic labor costs
C) high level of operational efficiency
D) high R & D demands
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Page 15
Chapter 14: Direct Investment and Collaborative Strategies
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Sample Questions
Q1) When no single company has control over a collaborative arrangement,________.
A) the operation may lack direction
B) none of the partners is responsible for legal violations
C) differences in corporate culture are likely to grow
D) one partner's interests are likely to be put ahead of the other partner's interests
Q2) What problem most likely arises when a company wishes to sell techniques/technology that it has either not yet fully developed or used commercially?
A) A buyer is reluctant to buy what it has not seen, and a seller risks divulging secretive information.
B) Most governments want to see contract details, which companies feel are proprietary.
C) It is difficult to develop a rapport between negotiating parties in this type of situation.
D) Parties can seldom agree on the desired level of quality control.
Q3) Collaborative arrangements prevent the possibility of information being passed to potential competitors.
A)True
B)False
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Chapter 15: The Organization of International Business
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Q1) Vertical and horizontal constraints that segment employees and their tasks within an organization are generally referred to as ________.
A) structures
B) networks
C) boundaries
D) classifications
Q2) The balance between centralization and decentralization of authority in a company is known as ________.
A) systemic differentiation
B) horizontal differentiation
C) schematic differentiation
D) vertical differentiation
Q3) Profile the idea and features of horizontal differentiation,paying particular attention to its implications to how managers design their company's structure.
Q4) Coordination refers to ________.
A) linking various value activities within an organization
B) identifying the span of control within an organization
C) portioning the performance of specific tasks
D) assigning tasks to qualified managers
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Chapter 16: Marketing Globally
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Q1) Which of the following is most likely to occur when a firm segments markets by country?
A) achieving objectives by following a sales orientation strategy within that market
B) initially targeting the high-income consumers within that market
C) overlooking similarities between different countries
D) introducing multiple products to assess demand
Q2) A pull rather than a push strategy is most likely preferable when ________.
A) self-service is not predominant
B) the price of a product is high relative to incomes
C) there are few governmental restrictions on advertising
D) there are a large number of languages and a low literacy rate
Q3) Antidumping regulations of the WTO allow countries to establish restrictions against any exports that fail to meet quality standards.
A)True
B)False
Q4) How do foreign government regulations affect pricing and promotion for international businesses?
Q5) What is the gray market? Why are companies concerned about it?
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Chapter 17: Global Manufacturing and Supply Chain Management
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Q1) Deciding whether to establish production facilities in many different countries or in one centralized location is part of the ________.
A) cultural matrix
B) Six Sigma process
C) manufacturing configuration
D) innovation matrix
Q2) The three levels of quality standards are general,international,and industry-specific.
A)True
B)False
Q3) Six Sigma is a highly focused system of quality control that scrutinizes a company's entire production system.
A)True
B)False
Q4) Centralized manufacturing is most widely used when customers have widely varying localized needs.
A)True
B)False
Q5) Describe total quality management.
Page 19
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Chapter 18: International Accounting Issues
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Q1) From the perspective of the classification of accounting systems,German and Japanese companies tend to be ________.
A) micro-based countries
B) strong equity market countries
C) weak equity market countries
D) pragmatic business countries
Q2) A major reason for the Parmalat accounting scandal is that the firm ________.
A) sold milk in countries without a license
B) used U.S. GAAP standards instead of IFRS
C) used off-balance-sheet financing to hide debts
D) transferred most of its assets to banks in Switzerland
Q3) The accounting principle that relates to more,rather than less,extensive footnotes in reports is known as ________.
A) secrecy
B) measurement
C) conservatism
D) transparency
Q4) How do exchange rates affect budgets used to evaluate performance in MNEs?
Q5) In a brief essay,discuss the concepts of transfer pricing and hedging.
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Chapter 19: The Multinational Finance Function
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Q1) Which of the following is a characteristic of the Eurocurrency market?
A) The Eurocurrency market is both short and medium term.
B) Private borrowers are the major players in the Eurocurrency market.
C) The Eurocurrency market is a retail, rather than wholesale, market.
D) The interest rates in the Eurocurrency market are about the same as in domestic markets.
Q2) What are the major sources of external funds for an MNE's normal operations? Why do MNEs use offshore financial centers to raise funds?
Q3) One way to account for the challenge of the variability of future cash flows is to ________.
A) adjust the hurdle rate for the project
B) use the most likely cash flow estimate
C) ignore different rates of inflation to prevent confusion
D) leave out a consideration of the terminal value of an investment
Q4) The OECD is concerned about transfer pricing practices because ________.
A) transfer pricing can help maximize a company's worldwide tax liability
B) transfer prices tend to be higher in industrial than developing countries
C) governments use transfer prices to manipulate companies' investment strategies
D) companies use transfer prices to manipulate prices and therefore taxes
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Chapter 20: International Human Resources
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Sample Questions
Q1) What individual characteristics and qualifications should a company consider when choosing managerial candidates for foreign assignments? Which one do you think is most important? Why?
Q2) Why is management of international human resources more difficult than directing human resources at the domestic level?
A) the complications that arise from political, cultural, legal, and economic differences between countries
B) the challenge posed by managers in other countries that aim to achieve global objectives for the company no matter the costs imposed on national objectives
C) the greater similarity among foreign subsidiaries than among domestic subsidiaries in terms of dependence on headquarters for resources
D) the complications posed by dealing with competing agendas from different labor unions in different countries
Q3) Unlike the geocentric and polycentric mindsets,the ethnocentric mindset is not tied to a particular home or host nation.
A)True
B)False
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