International Business Operations
Final Test Solutions
Course Introduction
International Business Operations explores the strategies and practices involved in conducting business in a global environment. The course examines how multinational companies manage cross-border transactions, including international marketing, supply chain logistics, finance, human resources, and risk management. Students will analyze the impact of cultural, legal, economic, and political factors on business decisions and learn how global trends such as emerging markets, digitalization, and sustainability shape operational strategies. Emphasis is placed on case studies and real-world examples to develop practical skills for navigating the complexities of international markets.
Recommended Textbook
International Business The New Realities 4th Edition by S. Tamer Cavusgil
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17 Chapters
1641 Verified Questions
1641 Flashcards
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Page 2
Chapter 1: Introduction: What Is International Business
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Sample Questions
Q1) In a short essay, explain the cross-cultural risk faced by internationalizing firms. What causes this type of risk? Why might it pose a problem for internationalizing firms?
Answer: Cross-cultural risk refers to a situation or event where a cultural miscommunication puts some human value at stake. Cross-cultural risk arises from differences in language, lifestyles, mind-sets, customs, and religion. Values unique to a culture tend to be long-lasting and transmitted from one generation to the next. These values influence the mind-set and work style of employees and the shopping patterns of buyers. Foreign customer characteristics differ significantly from those of buyers in the home market.
Language is a critical dimension of culture. In addition to facilitating communication, language is a window on people's value systems and living conditions. When translating from one language to another, it is often difficult to find words that convey the same meanings. Such challenges impede effective communication and cause misunderstandings. Miscommunication due to cultural differences gives rise to inappropriate business strategies and ineffective relations with customers.
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Chapter 2: Globalization of Markets and the
Internationalization of the Firm
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Sample Questions
Q1) Industrialization implies that emerging markets are increasing their dependence on low-cost labor.
A)True
B)False
Answer: False
Q2) The third phase of globalization was triggered by ________.
A)the end of World War II
B)the invention of electricity
C)the end of World War I
D)the Great Depression
Answer: A
Q3) The representative from Business A is most likely from ________.
A)China
B)United Kingdom
C)Mexico
D)Brazil
Answer: B
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Page 4
Chapter 3: The Cultural Environment of International Business
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101 Verified Questions
101 Flashcards
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Sample Questions
Q1) Feminine cultures tend to emphasize ________.
A)interdependence among people
B)accumulation of wealth
C)ambition
D)competitiveness
Answer: A
Q2) Which of the following countries is an example of a strongly collectivist society?
A)Ireland
B)Canada
C)Australia
D)China
Answer: D
Q3) Cultural values and attitudes can be transmitted through a variety of sources including parents, teachers, friends, government leaders, movies, television, and the Internet.
A)True
B)False
Answer: True
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Chapter 4: Ethics, Corporate Social Responsibility,
Sustainability and Corporate Governance
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Sample Questions
Q1) Improper ethical behavior is unlikely to result when bad means are justified by good ends.
A)True
B)False
Q2) Intellectual property rights law enacted in one country are enforceable worldwide.
A)True
B)False
Q3) ________ represents the base of the pyramid of ethical behavior.
A)Ethical behavior
B)Corporate social responsibility
C)Complying with laws and regulations
D)Guarding against corruption
Q4) Piracy is equivalent to counterfeiting.
A)True
B)False
Q5) The most advanced companies monitor suppliers to ensure that they use sustainable practices.
A)True
B)False
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Chapter 5: Theories of International Trade and Investment
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Sample Questions
Q1) According to Michael Porter, a nation's factor endowments help determine its
A)national competitive advantage
B)demand conditions
C)negative balance of trade
D)comparative advantage
Q2) The ________ is one of the three key modern perspectives that helps explain the development of national competitive advantage.
A)factor proportions theory
B)absolute advantage principle
C)national industrial policy
D)comparative advantage of nations
Q3) Which of the following refers to a collaborative venture which results in a new legal entity?
A)non-equity-based strategic alliances
B)sole proprietorships
C)equity-based joint ventures
D)not-for-profit organizations
Q4) Explain the limitations of early trade theories. Discuss born global firms.
Q5) Why do nations trade? What would the world be like without international trade?
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Chapter 6: Political and Legal Systems in National Environments
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Sample Questions
Q1) The immediate cause of country risk is a legal or political factor.
A)True
B)False
Q2) Which of the following is the LEAST adversarial method of resolving a contractual dispute?
A)trial
B)arbitration
C)litigation
D)conciliation
Q3) Which of the following countries is considered primarily socialist?
A)Germany
B)Canada
C)India
D)Libya
Q4) A(n)________ is a type of trade penalty imposed on one or more countries by one or more other countries.
A)confiscation
B)expropriation
C)subsidy
D)sanction
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Chapter 7: Government Intervention and Regional Economic Integration
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Sample Questions
Q1) Blocking imports ________.
A)increases the availability of raw materials
B)increases the availability of products sold in the home market
C)reduces the availability of products sold in the home market
D)decreases the cost of products sold in the home market
Q2) Products are classified under about 8,000 different unique codes in the ________ schedule, a standardized system used worldwide.
A)harmonized tariff
B)protective tariff
C)revenue tariff
D)specific tariff
Q3) The WTO was created in order to reduce tariffs through continuous negotiations among member nations.
A)True
B)False
Q4) Nations with economies based on agriculture and textile manufacturing generate more economic revenue than do nations with many high-tech industries.
A)True
B)False
Page 9
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Chapter 8: Understanding Emerging Markets
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Sample Questions
Q1) Microfinance provides large-scale financial services mainly to global conglomerates.
A)True
B)False
Q2) ________ in developing economies deter firms from these countries from participating in the global economy.
A)Low trade volumes
B)Bureaucracy and red tape
C)High inward FDI
D)Lack of a rich cultural heritage
Q3) Certain emerging markets that have evolved from centrally planned economies to liberalized markets are called transition economies.
A)True
B)False
Q4) Where are emerging markets mostly found? What are the factors contributing to their rapid growth?
Q5) How are large MNEs from advanced economies competing against new emerging market MNEs? In a short essay, describe the methods used by the incumbents to protect market share from emergent firms.
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Chapter 9: The International Monetary and Financial Environment
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Q1) Describe the two main types of foreign exchange management used today. Provide examples of nations which use each type of system. What are the benefits of each system?
Q2) A devaluation is an action taken by the international monetary fund.
A)True
B)False
Q3) Which of the following is characteristic of the fixed exchange rate system?
A)utilized by most advanced economies
B)rates based on supply and demand forces
C)value of currency is set relative to the value of another
D)allows for monetary policy flexibility
Q4) Companies have a tendency to prefer handling international business transactions with their own country's currency rather than with the currency of another country.
A)True
B)False
Q5) The floating exchange rate system is also called a pegged exchange rate system. A)True
B)False
11
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Chapter 10: Financial Management and Accounting in the Global Firm
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Sample Questions
Q1) In passive hedging, the firm frequently reviews total exposure and hedges only a subset of its total exposures, usually those that pose the greatest risk.
A)True
B)False
Q2) The sale of corporate bonds to individuals or institutions to raise capital is called
A)debt financing
B)equity financing
C)multilateral netting
D)currency hedging
Q3) The NYSE and the NASDAQ Stock Market are the largest in terms of volumes of shares traded.
A)True
B)False
Q4) Describe the six major financial management tasks that are critical to firms active in international business transactions.
Q5) Major supply shocks do not affect exchange rates.
A)True
B)False
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Chapter 11: Strategy and Organization in the International Firm
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Sample Questions
Q1) Converging buyer characteristics, growing acceptance of global brands, and increased diffusion of uniform technology make it difficult to pursue a global strategy.
A)True
B)False
Q2) The computer industry is an example of a ________.
A)locally responsive industry
B)multidomestic industry
C)global industry
D)country-by-country competitor
Q3) Describe four traits that characterize visionary leaders, and explain why these traits are especially necessary for a firm that operates within a global matrix structure.
Q4) A centralized approach means substantial autonomy and decision-making authority are delegated to the firm's subsidiaries around the world.
A)True
B)False
Q5) Explain the benefits of a multidomestic strategy to firm internationalization. What are some of the disadvantages to this approach?
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Chapter 12: Global Market Opportunity Assessment
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Sample Questions
Q1) When determining a product's potential in numerous foreign markets, it is usually best to assume that buyers have identical needs and purchasing habits across the markets.
A)True
B)False
Q2) A country's population is referred to as ________.
A)market intensity
B)market size
C)market receptivity
D)market growth rate
Q3) With a high percentage of college-educated citizens, countries such as China and India have become a source for international firms seeking knowledge workers.
A)True
B)False
Q4) According to the indexing and ranking method for choosing the most promising target market, the researcher assigns scores to countries based on their overall market attractiveness.
A)True
B)False
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Chapter 13: Exporting and Global Sourcing
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Sample Questions
Q1) In a short essay, describe three key drivers responsible for the recent growth of global sourcing.
Q2) Business activities that would most likely be offshored are characterized by ________.
A)high-value-adding activities that contribute more productively to increasing company performance
B)services related to critical, long-term research projects and product development
C)routine tasks that do not relate to the firm's primary service or product
D)functions related to the firm's core competencies and strategic assets
Q3) Global sourcing hinders firms from freeing expensive analysts, engineers, and managers from routine tasks.
A)True
B)False
Q4) International logistics usually make use of a single transportation mode.
A)True
B)False
Q5) Most companies cite cost cutting as the main reason for global sourcing. A)True
B)False
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Chapter 14: Foreign Direct Investment and Collaborative Ventures
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Sample Questions
Q1) Which of the following questions would most likely be important for ABC managers to evaluate as they consider expanding into the Asian market?
A)What U.S. firms have successfully partnered with Asian companies?
B)Where will ABC management locate the staff needed to oversee an Asian plant?
C)How much control does ABC management want to have over their Asian operations?
D)What are the pricing strategies followed by competitor firms in Asia?
Q2) Discuss resource and asset-seeking motives for FDI. Why might a company favor acquisition over greenfield investment as an FDI approach?
Q3) FDI is the most advanced and complex foreign market entry strategy.
A)True
B)False
Q4) Compared to small firms, large companies usually can access capital at lower cost.
A)True
B)False
Q5) A new legal entity is created during the formation of a project-based, nonequity venture.
A)True
B)False
Page 16
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Chapter 15: Licensing, Franchising, and Other Contractual Strategies
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Sample Questions
Q1) Which of the following is provided by the licensor in a licensing agreement?
A)a monetary down-payment plus royalties for all products sold locally
B)a combination of intellectual property and technical information and assistance
C)a storefront or facility and the necessary materials to make the product
D)a combination of a lump-sum payment and the intellectual know-how
Q2) Which of the following is an example of trademark licensing agreement?
A)a China based consumer electronic company that has invented a flexible casing for its MP3 players
B)a Thailand-based pharmaceutical company that receives manufacturing knowledge from a U.S-based pharmaceutical
C)a U.K.-based cosmetics manufacturer that is allowed to use an American cosmetics manufacturing firm's logo for its new line of "Titanium" makeup products
D)a U.S.-based clothing company that opens a factory in Vietnam and Cambodia to utilize low-labor costs
Q3) Explain the role of intellectual property rights in foreign market contractual strategies. What constitutes the infringement of intellectual property?
Q4) Describe the guidelines for protecting intellectual property.
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Chapter 16: Marketing in the Global Firm
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Sample Questions
Q1) Perhaps the most important distinction between standardization and adaptation is that ________.
A)standardization helps the firm customize products according to customer preferences, while adaptation helps the firm save time
B)standardization helps the firm cut costs, while local adaptation helps the firm more precisely cater to local needs and requirements
C)standardization helps the firm cater to the needs of local customers, while adaptation helps the firm save costs through mass production
D)standardization helps the firm upgrade quality to suit the unique tastes of consumers, while adaptation emphasizes uniformity
Q2) A standardized marketing approach is appropriate when customers seek similar features in the product or service.
A)True
B)False
Q3) Promotional activities are typically long-term marketing activities.
A)True
B)False
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Page 18
Chapter 17: Human Resource Management in the Global Firm
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Sample Questions
Q1) Which of the following measures would a progressive firm most likely take to ensure female equality in international business?
A)encourage senior executives to learn multiple foreign languages
B)limit the number of female executives for international executive posts
C)deny leadership roles in foreign assignments to men
D)have female executives serve as mentors and role models for aspiring women
Q2) ________ is a formal process for assessing how effectively employees perform their jobs.
A)Performance planning
B)Performance management
C)Performance appraisal
D)Performance guarantee
Q3) Firms prefer HCNs when the host-country environment is complex and their specialized knowledge or local connections are required in the local marketplace.
A)True
B)False
Q4) Most European countries restrict firms' ability to lay off workers.
A)True
B)False
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