Global Strategic Management
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Course Introduction
Global Strategic Management explores the key concepts, frameworks, and tools necessary for formulating and implementing strategy in international business environments. The course examines how multinational organizations navigate complexities such as cross-cultural differences, global competition, and diverse regulatory environments. Students analyze real-world cases to understand strategic decision-making, entry modes into foreign markets, international expansion, competitive advantage on a global scale, and the impact of technology and innovation in shaping global strategies. Emphasis is placed on developing critical thinking and strategic skills for managers operating in an increasingly interconnected world.
Recommended Textbook
International Business Environments Operations 14th Edition by John Daniels
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Page 2
Chapter 1: Globalization and International Business
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Q1) International business includes all commercial transactions between two or more countries.
A)True
B)False
Answer: True
Q2) When a company successfully responds to foreign production and market opportunities,________.
A) other companies will likely emulate its successful practices
B) it likely has a long-term advantage over competitors
C) it will downsize its domestic operations
D) its home government likely raises taxes on the company
Answer: A
Q3) Managers who are knowledgeable about ________ are better able to identify the location,quantity,quality,and availability of the world's natural resources.
A) political factors
B) geographic factors
C) competitive factors
D) cultural factors
Answer: B
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Page 3
Chapter 2: The Cultural Environments Facing Business
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Q1) Which of the following is the most accurate statement about culture?
A) Cultural variables can easily be isolated from other factors such as economic and political conditions.
B) Although most cultural variables are universal, the forms these variables take differ from culture to culture.
C) Most cultural variables are superficial and can easily be influenced by environmental factors.
D) Within a culture, everyone responds to particular cultural variables the same way.
Answer: B
Q2) Assume a firm plans to expand internationally. If its managers wish to avoid pitfalls caused by differences in "silent language," they should consider differences in
A) normal proximity during conversations
B) degree of detail expected in written contract
C) the meaning of slang words during presentations
D) importance of adherence to schedules
Answer: A
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Chapter 3: The Political and Legal Environments Facing Business
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Sample Questions
Q1) The Third Wave of Democratization was partially triggered by improved communication systems.
A)True
B)False
Answer: True
Q2) ________ political risks arise from political actions,such as public corruption or a partisan judicial system,that interfere with transactions between sellers and buyers and that can significantly raise the costs of getting things done.
A) Systemic
B) Procedural
C) Catastrophic
D) Distributive
Answer: B
Q3) Which of the following countries has a collectivist orientation?
A) Canada
B) Australia
C) Japan
D) Netherlands
Answer: C
Page 5
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Chapter 4: The Economic Environments Facing Businesses
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Q1) In a mixed economy,all dimensions of economic activity,including pricing and production decisions,are determined by a central government plan.
A)True
B)False
Q2) Presently,which of the following countries is best characterized as a pure example of a command economy?
A) Russia
B) Libya
C) China
D) Vietnam
Q3) In the aftermath of the recent worldwide credit crisis,there has been a significant reduction in the level of government involvement in economic affairs.
A)True
B)False
Q4) The so-called "misery index" is the sum of a country's inflation and unemployment rates.
A)True
B)False
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Chapter 5: Globalization and Society
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Q1) Which stakeholders must companies satisfy? What role should stakeholders play in a firm's internal code of conduct?
Q2) Which of the following is a primary business objective for pursuing ethical behavior?
A) avoiding industrial sanctions
B) developing competitive advantages
C) developing creative advertisements
D) discouraging false commitments to the firm
Q3) Which of the following is most important to the effectiveness of an internal code of conduct?
A) ensuring that employees understand the code by requiring confirmation in writing
B) paying bonuses to suppliers and distributors that agree to the code
C) relying on nonprofit NGOs to develop guidelines
D) adhering to industry standards and norms
Q4) What is extraterritoriality? Why is the concept controversial?
Q5) Normativism asserts that universal standards of behavior exist and should be accepted in all cultures.
A)True
B)False
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Chapter 6: International Trade and Factor Mobility Theory
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Q1) Comparative advantage theory holds that gains from trade are the result of capital movements from countries with low interest rates to countries with higher interest rates.
A)True
B)False
Q2) Why is the United States both an exporter and importer of such products as vehicles and passenger aircraft?
A) Buyers procure similar products for replacement parts.
B) Transportation costs and cultural differences limit exporters.
C) Companies differentiate products to appeal to different consumers.
D) Bilateral trading agreements require this interchange for a number of products.
Q3) The premise that there will be more finely tuned specialization of production among countries is most likely based on the idea that companies will ________.
A) depend more on production of nontradable goods and services
B) encourage urbanization in emerging countries that lack infrastructure
C) establish facilities in dispersed locations to hinder domestic competition
D) take advantage of wage and skill differences among countries
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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 argument for using protectionism to bring about industrialization in developing countries presumes that gains will occur because the industry will become internationally competitive.
A)True
B)False
Q3) The government of Country X imposes import restrictions on steel to help the domestic steel industry in depressed areas. What is the most likely result of such restrictions?
A) damaging other industries in Country X
B) devaluing the currency of Country X
C) lowering steel prices in Country X
D) triggering boycotts in Country X
Q4) An effective tariff is the sum of the ad valorem tariff plus the specific duty.
A)True
B)False
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Chapter 8: Cross-National Cooperation and Agreements
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Q1) Very few commodity agreements are successful in bringing together supplier and consumer countries to stabilize commodity prices.
A)True
B)False
Q2) Baldani Manufacturing,an Italian firm,plans to expand into Asia. In order to take advantage of regional trading groups,Baldani will most likely need to change its ________.
A) operating strategies
B) selection test methods
C) bilateral trade agreements
D) economic integration methods
Q3) Members of the Andean Community(CAN)have a common external tariff. CAN is most likely a ________.
A) free trade agreement
B) customs union
C) domestic trade zone
D) free trade sovereignty
Q4) The European Union is an example of regional integration. A)True B)False
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Chapter 9: Global Foreign-Exchange Markets
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Q1) In the foreign exchange market,the bid is the rate at which ________.
A) the trader is willing to sell foreign exchange
B) the buyer is willing to swap foreign exchange
C) the trader is willing to buy foreign exchange
D) the trader earns a profit
Q2) In the spot market,the ________ is the difference between the bid and offer rates and is the trader's profit margin.
A) bid
B) offer
C) cross rate
D) spread
Q3) Why are options most likely so attractive to companies?
A) The writer of the option does not charge the company any fee for writing the option.
B) Options provide companies with more flexibility than a forward contract.
C) Options are usually cheaper than forward contracts.
D) Options can be used for only foreign exchange deals.
Q4) An offer is the right but not the obligation to buy or sell foreign currency.
A)True
B)False
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Chapter 10: The Determination of Exchange Rates
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Q1) Which type of exchange rate arrangement is based on supply and demand?
A) soft peg
B) hard peg
C) crawling
D) floating
Q2) A country's central bank is responsible for ________.
A) distributing money to foreign countries that are in a debt crisis
B) encouraging disorderly conditions in foreign exchange markets
C) the policies affecting the value of its country's currency
D) establishing foreign exchange markets
Q3) A current account deficit suggests that a country is importing more than it is exporting and building up foreign debt.
A)True
B)False
Q4) According to the Treaty of Maastricht,a euro applicant must have a total outstanding government debt that does not exceed 60% of its GDP.
A)True
B)False
Q5) What is a black market? Under what conditions might one exist?
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Chapter 11: The Strategy of International Business
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Sample Questions
Q1) A company that develops different capabilities and contributions from different countries and shares them in integrated worldwide operations is using a transnational strategy.
A)True
B)False
Q2) A differentiation strategy is a unique mixture of the multidomestic and global strategies whereby the company attempts to capture the advantages of both.
A)True
B)False
Q3) Pressures for global integration include economic integration,convergent consumer preferences,and political demands imposed by host countries.
A)True
B)False
Q4) The fundamental outlook of the global strategy is adaptation.
A)True
B)False
Q5) What is the Industry Organization (IO)paradigm? Discuss the underlying assumptions of this model.
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Chapter 12: Country Evaluation and Selection
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Q1) Sales potential is probably the most important variable in determining international location decisions because consumer demand exceeds supply.
A)True
B)False
Q2) Governments that conduct takeovers of foreign companies rarely make formal declarations of their intent to take over in advance of the action.
A)True
B)False
Q3) Which of the following is most likely a true statement about companies' acquisition of resources/assets abroad?
A) Regardless of industry, cheap labor is the most sought after resource.
B) Resource availability limits a firm's production location choices.
C) Regardless of industry, raw materials are the most sought after resource.
D) Risks are higher for resource-seeking than for sales-seeking foreign operations.
Q4) In a short essay,discuss liquidity preference as it relates to monetary risk.
Q5) What problems are common with the published data available about different countries?
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Chapter 13: Export and Import
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Q1) The U.S. government has more than 10,000 tariff classifications and more than half of them are subject to interpretation.
A)True
B)False
Q2) Vantex Fabrics is a U.S. firm that designs,manufactures,and sells high-quality fabrics used for home decor. Executives at the firm believe that Vantex could significantly increase its profitability by exporting fabrics to foreign markets. The vice president of marketing is in favor of exporting to England,while the vice president of finance asserts that the firm would benefit most from exporting to China. Which of the following,if true,best supports the vice president of marketing's suggestion?
A) Incremental internalization reduces the exporting risks facing Vantex.
B) Rapid internationalization decreases the likelihood of failure for Vantex.
C) Vantex plans to diversify its product offerings within the next ten years.
D) Vantex employs 450 people and will likely develop worldwide operations within 12 months.
Q3) What is a born global? How has technology triggered the growth of born globals?
Q4) Countertrade is an efficient way of doing business.
A)True
B)False
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Chapter 14: Direct Investment and Collaborative Strategies
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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 is a management contract? What are the potential advantages to both parties in the contract?
Q3) An advantage of collaborative agreements is the ability to spread faster geographically.
A)True
B)False
Q4) Internal tension may develop within a company as it changes an international operating mode because some managers gain responsibility and others lose it.
A)True
B)False
Q5) Licenses are often given to companies owned in whole or in part by the licensor.
A)True
B)False
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Chapter 15: The Organization of International Business
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Q1) The notion of boundaries,within the context of neoclassical structures,refers to those limitations that interfere with communication and collaboration between the firm and its suppliers,distributors,allies,competitive rivals,and customers.
A)True
B)False
Q2) A company adopting a(n)________ strategy will likely aim to develop an organization culture that helps employees around the world unconditionally accept common goals and practices.
A) domestic
B) multidomestic
C) national
D) global
Q3) Organization ________ refers to the formal arrangement of roles,responsibilities,and relationships within an organization.
A) structure
B) systems
C) culture
D) strategy
Q4) Describe how an MNE might use reports as a control mechanism.
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Chapter 16: Marketing Globally
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Sample Questions
Q1) International marketing differs from domestic marketing in that ________.
A) marketing principles are different
B) consumers prefer domestically made merchandise
C) environmental variations require applying principles differently
D) low prices are a more important competitive factor in foreign markets
Q2) A push strategy for international sales is most likely preferable to a pull strategy when ________.
A) there are few prohibitions on advertising
B) the price of the product is high relative to incomes
C) people rely on friends' opinions before buying a product
D) literacy rates are high
Q3) Market diversity,government intervention,and currency fluctuations complicate international pricing decisions.
A)True
B)False
Q4) Define price escalation in exporting and explain why it occurs.
Q5) The most common way of identifying market segments is through demographics. A)True B)False
Page 18
Q6) In a short essay,describe the various reasons for product alteration.
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Chapter 17: Global Manufacturing and Supply Chain Management
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Q1) The use of JIT does not depend on the quality of incoming parts or the time of their arrival.
A)True
B)False
Q2) The manufacturing plants of Orion Computers are located closer to customers rather than in low-wage areas. What is the most likely reason for this strategy?
A) competitor locations in emerging markets
B) overseas producers with innovative designs
C) customer demand for dependability
D) diversification of product lines
Q3) ________ manufacturing is any manufacturing that takes place in a country different from the home country.
A) Offshore
B) Multidomestic
C) Cost-minimization
D) Outsourcing
Q4) The make-or-buy decision applies only to domestic firms.
A)True
B)False
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Chapter 18: International Accounting Issues
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Q1) Transfer prices are ________.
A) always based on production costs
B) the prices on goods transferred from one country to another
C) regulated by the United Nations so as to avoid manipulation
D) often used to minimize taxation
Q2) The balanced scorecard is ________.
A) an average of foreign exchange rates
B) an approach to performance measurement
C) used widely by U.S. firms but not European firms
D) not very successful at linking financial and nonfinancial performance
Q3) The most common approach to translate budgets and compare a budget with actual performance uses the ________.
A) spot rate
B) forecast rate
C) historical exchange rate
D) temporal exchange rate
Q4) Compare the two major approaches used to translate foreign currency financial statements,and explain how translation gains and losses are reported under these two approaches.
Q5) How do exchange rates affect budgets used to evaluate performance in MNEs?
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Chapter 19: The Multinational Finance Function
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Q1) Tax law variations around the world affect an MNE's capital budgeting,financing,and method of setting transfer prices.
A)True
B)False
Q2) When Sistema,a Russian company,issued a U.S. dollar stock offering in London,its shares were classified as a(n)________.
A) Global Depositary Receipt
B) American Depositary Receipt
C) European Depositary Receipt
D) International Depositary Receipt
Q3) A price on goods and services sold by one member of a corporate family to another is known as a(n)________.
A) transfer price
B) tax credit price
C) passive price
D) active price
Q4) What are the major sources of internal funds for MNEs? Why do many MNEs acquire external funds through the Eurodollar market?
Q5) What is a transfer price? Why are transfer prices used?
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Chapter 20: International Human Resources
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Q1) The three types of interpretative frameworks in international businesses are
A) ethnocentric, polycentric, and geocentric
B) ethnocentric, intercentric, and monocentric
C) monocentric, neocentric, and polycentric
D) intracentric, geocentric, and neocentric
Q2) What are the differences between ethnocentric,polycentric,and geocentric frameworks?
Q3) An executive with a polycentric staffing policy presumes that successful business practices at home need not change when transferred to foreign markets.
A)True
B)False
Q4) Expatriates are locals from the country of the foreign subsidiary.
A)True
B)False
Q5) Fundamentally,the task of HRM is putting the right person into the right job in the right place at the right time for the right salary.
A)True
B)False
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