Global Business Strategy
Midterm Exam
Course Introduction
Global Business Strategy examines the frameworks and decision-making processes that enable organizations to compete and succeed in international markets. The course covers topics such as global market assessment, competitive advantage, entry modes, cultural and regulatory environments, and international organizational structures. Through case studies and real-world examples, students learn to analyze global competitive dynamics, formulate strategies for global expansion, and manage cross-border operations, with an emphasis on adapting to the rapidly changing global business landscape.
Recommended Textbook
International Business The Challenge of Global Competition 13th Edition by Donald Ball\
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Chapter 1: The Challenging World of International Business
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Sample Questions
Q1) Explain the different reasons for firms to enter foreign markets.
Answer: Answers may vary, but they should note that the reasons firms enter foreign markets are all linked to either (1) the desire to increase profits and sales or (2) the desire to protect these profits and sales from being eroded by competitors. For increasing profits and sales, responses may address such factors as entering promising new markets, creating new markets, accessing faster-growing markets, exploiting improvements in communication technologies, obtaining greater profits, increasing revenues, lowering costs of goods sold, and accessing higher overseas profits. For protecting markets, profits, and sales, arguments may address such factors as following customers overseas, attacking a competitor's home market, using foreign production to lower costs, protecting foreign markets, dealing with lack of foreign exchange, responding to local production by competitors, exploiting downstream markets, responding to protectionism, guaranteeing supply of raw materials, accessing technology and managerial know-how, achieving geographic diversification, or satisfying management's desire for expansion.
Q2) Internal environmental forces are commonly referred to as controllable.
A)True
B)False
Answer: True
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Chapter 2: International Trade and Foreign Direct Investment
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Sample Questions
Q1) Regarding annual inflows of FDI:
A) industrialized nations primarily invest in one another.
B) an average of nearly 70 percent of annual FDI investments has been going into developed countries in recent years.
C) developed countries obtained a 70 percent increase in the level of FDI between 2000 and 2009.
D) all of the above.
E) two of A, B, and C.
Answer: E
Q2) In examining the volume of international trade:
A) exports of merchandise grew nearly fivefold between 1990 and 2010.
B) exports of services grew more than 10-fold between 1980 and 2010.
C) the proportion of world exports of commercial services accounted for by the United States fell by nearly 20 percent between 1980 and 2010.
D) all of the above.
E) two of A, B, and C.
Answer: E
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Chapter 3: International Institutions From an International Business Perspective
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Sample Questions
Q1) The Doha Development Agenda is:
A) a WTO conference on trade.
B) an agreement on climate control and greenhouse gases.
C) a decision-making approach to development.
D) a development rules list.
Answer: A
Q2) ASEAN began as a defensive alliance of 10 Asian nations concerned about:
A) trade barriers in the West.
B) translation issues for their export products.
C) the spread of communism in their region.
D) Japan's influence in the region.
Answer: C
Q3) The following is an area in which the UN plays a significant role for international business: loaning seed money for entrepreneurial start-ups in developed nations.
A)True
B)False
Answer: False
Page 5
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Chapter 4: Sociocultural Forces
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Sample Questions
Q1) Business makes few costly mistakes in product introductions into foreign markets.
A)True
B)False
Q2) Musical tastes vary across cultures:
A) and are built on the solid foundation of the octave.
B) which is why they need to be understood by marketers who use music in commercials.
C) and come together in the Silk Road.
D) A and D
Q3) What two aspects of the culture frameworks would you share with a colleague leaving on her first foreign assignment, and why?
Q4) Hall's high-and low-context framework is based upon communication styles.
A)True
B)False
Q5) Referring to Hall's high-and low-context framework, in a high-context culture,
A) communication is explicit.
B) the context carries much of the communication.
C) communication is direct and focused on the topic.
D) the context is irrelevant.
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Chapter 5: Natural Resources and Environmental Sustainability
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Q1) Climate influences:
A) intelligence and energy levels, per the North-South divide.
B) what people can do, physically and economically.
C) levels of emotional well-being.
D) adjustment and motivation.
Q2) Heavy oil is oil weighted down with an extra carbon molecule, and it can be gasified using the Fischer-Tropsch process.
A)True
B)False
Q3) Coal and nuclear power are both in decline as energy sources.
A)True
B)False
Q4) Sustainable business models:
A) incorporate a more socialist political approach to the marketplace.
B) have as a goal to ensure that the marketplace exists for future generations.
C) regard environmentalism as more important than profit.
D) A and C
Q5) Every coast between 20 and 30 degrees of the equator (north or south) is dry.
A)True
B)False
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Chapter 6: Political and Trade Forces
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Q1) One way that the WTO defines dumping is the selling of a product abroad for less than the average cost of production in the importing nation.
A)True
B)False
Q2) Government stability is understood to refer to a government's:
A) policies-their ability to endure over time.
B) ability to keep itself in power.
C) two of A, B, andD
D) Both A and B are described by the term government stability, so C is the appropriate response.
E) all of A, B, and D.
Q3) A comparison based on hourly wages is a reasonable guide to a need to protect domestic jobs.
A)True
B)False
Q4) Tariff barriers may be used to protect domestic industry from foreign, lower-cost producers.
A)True
B)False
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Chapter 7: Intellectual Property and Other Legal Forces
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Q1) Discovery refers to the process of finding out facts that indicate a law has been violated, and it leads to the filing of a legal case, or litigation.
A)True
B)False
Q2) A choice-of-law clause specifies where a dispute will be settled.
A)True
B)False
Q3) Microsoft is an example of how a company can avoid multiple antitrust laws in multiple jurisdictions, thanks to equalization agreements.
A)True
B)False
Q4) Copyrights are protected under:
A) The WIPO Copyright Treaty.
B) the International Convention for the Protection of Industrial Property.
C) The Berne Convention of 1886.
D) the Treaty of Rome.
E) two of the above.
Q5) How might U.S. law affect international managers?
Q6) What is international law?
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Chapter 8: The International Monetary System and Financial Forces
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Sample Questions
Q1) What is appealing about the gold standard is:
A) everyone loves gold.
B) its simplicity.
C) its transportability.
D) its carrying costs.
Q2) Exchange rate forecasting is an advanced science; with the correct data, we can predict with accuracy exchange rate movements.
A)True
B)False
Q3) Bretton Woods led to an exchange rate agreement known as the Bretton Woods System or:
A) the floating-rate system.
B) the India Accord system.
C) the gold exchange standard.
D) the French rate system.
Q4) The SDR is:
A) a special deposit for corporate reimbursement.
B) special drawing rights, an international reserve asset.
C) a special deficit refund, made to compensate for currency devaluation.
D) a paper credit issued by the Bank for International Settlements.
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Chapter 9: International Competitive Strategy
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Sample Questions
Q1) Which of the following is correct about scenario analyses?
A) The objective of the process is to forecast the future.
B) The process extrapolates from past data to build scenarios for guiding decision making.
C) Managers develop best-case, worst-case, and most likely scenarios to guide decision making.
D) All of the above are correct.
E) None of A, B, or C is correct.
Q2) Strategic planning processes are something that only the company's most senior executives are involved with.
A)True
B)False
Q3) To set corporate objectives, management must first:
A) select a viable market segment.
B) quantify them.
C) define the firm's mission.
D) research the market.
E) none of the above.
Q4) Explain the purpose of a mission statement, a vision statement, values statements, and objectives.
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Chapter 10: Organizational Design and Control
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Q1) According to the text, the types of information an IC needs to have reported by subsidiaries include:
A) financial.
B) organizational structure and systems.
C) political.
D) all of the above.
E) two of A, B, and C.
Q2) Both multinational and global companies use regionalized organizations.
A)True
B)False
Q3) Companies that adopted the global organizational form felt that this organization would:
A) permit them to obtain cheaper labor.
B) be more capable of developing strategies to confront new global competition.
C) enable them to get lower interest rates to finance expansion.
D) all of the above.
E) two of A, B, and C.
Q4) In larger, older organizations more decisions are made at the subsidiaries.
A)True
B)False
Page 12
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Chapter 11: Global Leadership Issues and Practices
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Sample Questions
Q1) A global mindset involves:
A) a good, fundamental understanding of geography.
B) solid training in foreign languages and geography.
C) an openness to diversity and inclination to synthesize across its borders.
D) early foreign experiences.
E) A and D
Q2) In establishing the team, the leader wants to:
A) set boundaries for the team.
B) encourage strong member identification with the team and team norms.
C) direct activities so the team can meet its goals.
D) encourage team members to know one another.
E) A and B.
Q3) Virtual communication is more effective than face-to-face communication.
A)True
B)False
Q4) Multiplicity for global team leaders is evidenced by more players in the game than in a domestic setting.
A)True
B)False
Q5) What are the differences between traditional and global teams?
Page 13
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Chapter 12: Assessing International Markets
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Sample Questions
Q1) Trade missions consist of a group of people in search of business opportunities.
A)True
B)False
Q2) According to the text, data on imports may not completely measure market potential because:
A) these data are not available for most countries and products.
B) foreign competitors will not report export data accurately.
C) transportation costs impact prices.
D) all of the above.
E) two of A, B, and C.
Q3) Management should take the attitude that the stability of government policy is more important than is the particular form of government of a country.
A)True
B)False
Q4) Trade flows are good indicators of the magnitude of present sales.
A)True
B)False
Q5) Discuss cluster analysis as a method of estimating market demand.
Q6) Discuss the use of market indicators.
Page 14
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Chapter 13: Entry Modes
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Q1) What is contract manufacturing, and what are the ways in which international firms employ contract manufacturing?
Q2) An arrangement in which one firm contracts with another firm to produce products to its specifications but assumes responsibility for marketing is:
A) a license.
B) a franchise.
C) a management contract.
D) contract manufacturing.
E) a turnkey project.
Q3) A company can engage in indirect exporting by using which of the following companies in its own country?
A) Import merchants
B) Sales companies
C) Export commission agents
D) Overseas merchants
E) Two of the above
Q4) Generally mergers and acquisitions are considered alliances.
A)True
B)False
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Chapter 14: Export and Import Practices
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Sample Questions
Q1) Lack of top management commitment to export is often a problem with new exporters.
A)True
B)False
Q2) In CIF (cost, insurance, freight, foreign port) the buyer quotes a price that includes the cost of the goods, insurance, and all transportation and miscellaneous charges to the named foreign port in the country of final destination.
A)True
B)False
Q3) If assembly or manufacturing is done in an FTZ using imported components, no duties need to be paid when the finished product is imported.
A)True
B)False
Q4) The sales agreement should specify as simply as possible the duties of the representative and the firm.
A)True
B)False
Q5) How do U.S. nonexporting firms often explain their avoidance of foreign markets?
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Chapter 15: Marketing Internationally
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Sample Questions
Q1) In cases where the product serves the same function but must be adapted to different conditions, the product may be left unchanged but a different message is required.
A)True
B)False
Q2) In spite of the advantages of global standardization, many firms find it necessary to:
A) use the domestic marketing mix overseas.
B) modify the present mix or develop a new one for overseas markets.
C) use different marketing mixes overseas, to save money.
D) two of the above.
E) all of A, B, and C.
Q3) The promotional mix includes:
A) personal selling.
B) product design.
C) pricing.
D) all of the above.
E) two of A, B, and C.
Q4) Identify the appealing factors of online advertising in the international sphere, as discussed in the text.
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Chapter 16: Global Operations and Supply Chain Management
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Q1) When a new plant can be built that is a duplicate of others already functioning:
A) labor trainers experienced in the operation of the machinery can be sent to the new locations without undergoing any training.
B) costs will be the same as in existing locations.
C) vendors will be requested to furnish equipment that they have supplied previously.
D) all of the above.
E) two of A, B, and C.
Q2) As discussed in the text, global sourcing arrangements include overseas joint ventures, independent overseas manufacturers, and wholly owned subsidiaries.
A)True
B)False
Q3) Generally, it is easier for international firms to standardize the concepts of total quality management and synchronous manufacturing in their foreign plants than it is to standardize the actual production facilities.
A)True
B)False
Q4) What are the benefits of standardization of global operations?
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Chapter 17: Managing Human Resources in an International Context
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Q1) The use of third-country nationals has become particularly prevalent in the LDCs because they provide substantial cost savings over the use of home-country nationals.
A)True
B)False
Q2) Nancy Adler's research suggests that women:
A) will never get to the top because they take time-out for children.
B) are more likely than men to succeed if they quit the company and start their own businesses.
C) have been remarkably successful in international assignments, which does not seem to be related to gender.
D) are less likely than men to succeed in international assignments.
E) two of the above.
Q3) Approximately 15 percent of expatriates leave their firms during the course of their overseas assignment, and an additional 28 percent leave their companies within a year of their return from abroad.
A)True
B)False
Q4) Discuss the advantages and disadvantages of employing third-country managers.
Page 19
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Chapter 18: International Accounting and Financial Management
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Q1) There are four main types of FX risk: transaction, translation, economic, and arbitrage exposure.
A)True
B)False
Q2) Finance is best left decentralized in international firms so that local efficiencies and opportunities can be accessed.
A)True
B)False
Q3) How could an IC benefit from leading and lagging?
Q4) The number of FX markets, along with floating exchange rates, varying country inflation rates, advances in technology for the management of cash, and the growth of the derivatives market are among the conditions that have led to the growth of international finance centers.
A)True
B)False
Q5) Is triple-bottom-line accounting a reasonable approach to encourage businesses to take responsibility for the impact of their actions on social and environmental systems, or does it place an unrealistic burden on businesses to measure what may not be measurable?
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