International Management Exam Review
Course Introduction
International Management explores the strategies, challenges, and skills required for effectively managing organizations in a globalized environment. The course examines key topics such as cross-cultural communication, international business strategies, global leadership, managing diverse teams, and navigating legal, ethical, and political issues in international markets. Students will analyze real-world cases and engage in discussions to understand how multinational corporations adapt to economic, technological, and social differences across countries, preparing them to lead and make informed decisions in an interconnected global economy.
Recommended Textbook
International Business Competing in the Global Marketplace 10th Edition by Charles
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20 Chapters
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2123 Flashcards
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Page 2
W. L. Hill
Chapter 1: Globalization
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105 Verified Questions
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Sample Questions
Q1) Doing business in Russia involves risks because the country has shown signs of shifting back toward greater state involvement in economic activity and authoritarian government.
A)True
B)False
Answer: True
Q2) In the 1970s, many Japanese firms invested in North America and Europe:
A) to avoid a highly competitive domestic market.
B) to exploit high domestic tariff barriers.
C) as a hedge against unfavorable currency movements.
D) to take advantage of low labor costs.
Answer: C
Q3) What is the Uruguay Round? List the measures implemented in the Uruguay Round?
Answer: Under the umbrella of GATT, eight rounds of negotiations among member states worked to lower barriers to the free flow of goods and services. The most recent negotiations to be completed, known as the Uruguay Round, were finalized in December 1993. The Uruguay Round further reduced trade barriers; extended GATT to cover services as well as manufactured goods; provided enhanced protection for patents, trademarks, and copyrights; and established the World Trade Organization to police the international trading system.
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Chapter 2: National Differences in Political Economy
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102 Verified Questions
102 Flashcards
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Sample Questions
Q1) Modern socialists trace their intellectual roots to Karl Marx (1818-83), although socialist thought clearly predates Marx.
A)True
B)False
Answer: True
Q2) An economy in which the interaction of supply and demand determines the quantity in which goods and services are produced is called a ____.
A) planned economy
B) command economy
C) closed economy
D) market economy
Answer: D
Q3) In a command economy, enterprises have little incentive to control costs and be efficient, because they cannot go out of business.
A)True
B)False
Answer: True
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Page 4
Chapter 3: Political Economy and Economic Development
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Sample Questions
Q1) How does the ownership structure of newly privatized firms affect its functioning?
Answer: Many former command economies lack the legal regulations regarding corporate governance that are found in advanced Western economies. In such cases, managers with a small ownership stake can often gain control over the newly privatized entity and run it for their own benefit, while ignoring the interests of other shareholders.
Q2) First-mover advantages are the advantages that accrue to early entrants into a market.
A)True
B)False
Answer: True
Q3) Countries with free market economies in which property rights are protected tend to achieve lower economic growth rates than command economies where property rights are poorly protected.
A)True
B)False
Answer: False
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Page 5
Chapter 4: Differences in Culture
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Sample Questions
Q1) People who take food or safety for granted tend to be xenophobic, are wary of political activity, have authoritarian tendencies, and believe that men make better political leaders than women.
A)True
B)False
Q2) Consider the importance of unspoken language. Why is it important to be familiar with the unspoken language of another culture?
Q3) Max Weber thought that devout Hindus would be less likely to engage in entrepreneurial activity than devout Protestants.
A)True
B)False
Q4) Which of the following observations is correct?
A) The economic principles established in the Koran are against free enterprise.
B) The economic principles of Islam prohibit the payment or receipt of interest.
C) The Koran speaks disapprovingly of earning legitimate profit through trade and commerce.
D) Protection of the right to private property is not embedded within Islam.
Q5) What is the connection between religion and ethical systems? Do they have any implications for business?
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Chapter 5: Ethics in International Business
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Sample Questions
Q1) Which of the following statements is true about the United Nations Universal Declaration of Human Rights?
A) It transcends national borders.
B) It states that human rights are culturally determined.
C) It states that an action is judged desirable if it leads to the best possible balance of good consequences over bad consequences.
D) It states that the only social responsibility of business is to increase profits, so long as the company stays within the rules of law.
Q2) Companies can strengthen the moral courage of employees by committing themselves to not retaliate against employees who exercise moral courage.
A)True
B)False
Q3) Milton Friedman's basic position is that the only social responsibility of business is to increase profits, so long as the company stays within the rules of law.
A)True
B)False
Q4) What is a code of ethics?
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Chapter 6: International Trade Theory
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Sample Questions
Q1) Identify the theory that argues that advanced nations have an incentive to develop a new offering and hence such nations always tend to create a good or service for the first time.
A) Absolute advantage
B) Ricardo
C) Product life-cycle
D) Heckscher-Ohlin
Q2) Which of the following is one of the four attributes present in Porter's diamond?
A) Economies of scale
B) Factor endowments
C) Structural innovation
D) Procedural innovation
Q3) Identify a major flaw associated with mercantilism.
Q4) Porter's theory of national competitive advantage recommends unrestricted free trade between countries.
A)True
B)False
Q5) Explain the dynamic gains that are generated by opening an economy to trade.
Q6) Briefly explain Vernon's product life-cycle theory.
Page 8
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Chapter 7: The Political Economy of International Trade
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Sample Questions
Q1) During the 1980s and early 1990s, the world trading system erected by the GATT gained momentum as protectionist demands generally decreased across the world.
A)True
B)False
Q2) Free trade in agriculture could jump-start economic growth among the world's poorer nations and alleviate global poverty.
A)True
B)False
Q3) Which of the following is NOT one of the main instruments of trade policy?
A) Tariffs
B) Credit portfolios
C) Local content requirements
D) Administrative policies
Q4) Discuss the Buy America Act and its connection with local content requirements.
Q5) A subsidy helps domestic producers to compete against foreign imports.
A)True
B)False
Q6) Discuss the establishment of GATT. What was GATT's objective?
Q7) Discuss the economic reasons for government intervention in markets.
Page 9
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Chapter 8: Foreign Direct Investment
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Sample Questions
Q1) Which of the following arises when a country is exporting more goods and services than it is importing?
A) Current account surplus
B) Trade deficit
C) Trade surplus
D) Trade balance
Q2) Licensing gives a firm tight control over manufacturing, marketing, and strategy in a foreign country that may be required to maximize its profitability.
A)True
B)False
Q3) The stock of FDI is:
A) the amount of FDI undertaken over a given period of time.
B) the total accumulated value of foreign-owned assets at a given time.
C) the flow of FDI out of a country.
D) the amount of foreign direct investment made by domestic companies over a given period of time.
Q4) Why do many economists favor internalization theory as an explanation for FDI compared to Knickerbocker's theory?
Q5) How does the free market view support FDI?
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Chapter 9: Regional Economic Integration
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Sample Questions
Q1) Country X and Country Y reach an agreement to boost bilateral trade. They agree to remove all barriers to the trade of goods and services. They, however, are free to determine their own trade policies with regard to nonmembers. Which level of economic integration is this an example of?
A) A customs union
B) An economic union
C) A common market
D) A Free trade area
Q2) The Council of the European Union is responsible for proposing EU legislation, implementing it, and monitoring compliance with EU laws by member states.
A)True
B)False
Q3) According to Alexander Yeats, the trade diversion effects of Mercosur outweigh its trade creation effects.
A)True
B)False
Q4) Discuss the trend toward increased regional economic integration.
Q5) Discuss why NAFTA's most significant impact has been a political one, not an economic one.
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Chapter 10: The Foreign Exchange Market
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Sample Questions
Q1) _____ are exchange rates governing some specific future date foreign exchange transactions.
A) Spot exchange rates
B) Forward exchange rates
C) Future exchange rates
D) Currency swaps
Q2) The _____ school of thought argues that forward exchange rates do the best possible job of forecasting future spot rates and therefore investing in forecasting services would be a waste of money.
A) inefficient market
B) efficient market
C) random walk
D) speculative
Q3) Currency speculation typically involves the long-term movement of funds from one currency to another in the hopes of profiting from shifts in exchange rates.
A)True
B)False
Q4) What is the law of one price?
Q5) Describe translation exposure. How can translation exposure be minimized?
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Chapter 11: The International Monetary System
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Sample Questions
Q1) A currency crisis occurs due to ____.
A) the loss of confidence in a country's banking system
B) heavy foreign debt obligations
C) high levels of trade deficit
D) a speculative attack on the exchange value
Q2) Which of the following will help a company hedge against currency fluctuations?
A) Finding a large supplier to supply all the raw materials
B) In-house manufacturing of raw materials
C) Basing business in a single country
D) Dispersing production to different geographic locations
Q3) What is the Bretton Woods agreement? How was it different from the gold standard?
Q4) Supporters of floating exchange rates claim that trade deficits are determined by the balance between savings and investment in a country.
A)True
B)False
Q5) A foreign debt crisis is a situation in which a country cannot service its foreign debt obligations.
A)True
B)False
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Chapter 12: The Global Capital Market
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Sample Questions
Q1) Which of the following is a disadvantage of the integration facilitated by technology?
A) Segregated international capital markets will emerge as a result of technology.
B) Complexity in processing large volumes of data will increase.
C) Shocks that occur in one financial center will spread globally.
D) Systems integration hinders real-time data transfer across different countries.
Q2) Eurobonds are ____.
A) denominated in the currency of the country in which they are issued
B) normally underwritten by an international syndicate of banks
C) denominated in a currency that is accepted by the European Union
D) are sold outside the borrower's county with reference to the originating currency
Q3) Eurobonds are usually offered to residents of the country in whose currency they are denominated.
A)True
B)False
Q4) Write a brief note on foreign exchange risks and the cost of capital.
Q5) What is a capital market? Define market makers.
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Chapter 13: The Strategy of International Business
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Sample Questions
Q1) Pressures for cost reduction are minimal in industries where major competitors are based in low-cost locations, where there is persistent excess capacity, and where consumers are powerful and face low switching costs.
A)True
B)False
Q2) Which of the following statements is NOT true?
A) The way to increase the profitability of a firm is to create more value.
B) The amount of value a firm creates is measured by the difference between its costs of production and the value that consumers perceive in its products.
C) The more value customers place on a firm's products, the higher the price the firm is able to charge for those products.
D) The price a firm charges for a good or service is typically more than the value the customer places on that good or service.
Q3) Explain the concept of universal needs and in which type of industry it is most likely to occur.
Q4) Cost savings that come from learning by doing are known as economies of scale. A)True
B)False
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Chapter 14: The Organization of International Business
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Sample Questions
Q1) Firms pursuing a transnational strategy:
A) have a low need for coordination.
B) require very few integrating mechanisms.
C) have a very high need for cultural controls.
D) operate with a worldwide product division structure.
Q2) Discuss the type of firm that uses the worldwide product division structure.
Q3) Integration mechanisms are:
A) the formal division of the organization into subunits.
B) the mechanisms that enable each subunit to operate independently.
C) the mechanisms for coordinating subunits.
D) the location of decision making responsibilities within a structure.
Q4) By centralizing decision making, a firm can avoid the duplication of activities that occurs when similar activities are carried on by various subunits within the organization. A)True
B)False
Q5) Firms pursuing a global standardization strategy are more centralized than enterprises pursuing a localization or international strategy.
A)True
B)False
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Chapter 15: Entry Strategy and Strategic Alliances
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109 Verified Questions
109 Flashcards
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Sample Questions
Q1) Which of the following is a disadvantage of licensing?
A) It does not help firms that lack capital to develop operations overseas.
B) It does not give a firm the tight control over strategy that is required for realizing experience curve and location economies.
C) It cannot be used when a firm possesses some intangible property that might have business applications.
D) The firm has to bear the development costs and risks associated with opening a foreign market.
Q2) The valuable asset of firms, whose competitive advantage is based on management know-how, is their ____.
A) top management staff
B) USP
C) advertisements
D) brand name
Q3) The most typical joint venture is a 25/75 venture.
A)True
B)False
Q4) Discuss the three primary characteristics of a good ally.
Q5) Discuss the advantages of using a joint venture to enter foreign markets.
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Chapter 16: Exporting, Importing, and Countertrade
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Sample Questions
Q1) Time drafts cannot be sold to investors at a discount from its face value.
A)True
B)False
Q2) In an international transaction involving bank as a third party, the exporter ships the product after ____.
A) the bank receives materials from the importer
B) receiving cleared payment through bank
C) the importer has paid the bank
D) the bank promises to pay on the importer's behalf
Q3) A counterpurchase gives exporters more flexibility than an offset.
A)True
B)False
Q4) A letter of credit states that an exporter has availed credit from the bank to manufacture goods.
A)True
B)False
Q5) A buyback occurs when a direct exchange of goods or services occur between two parties without a cash transaction.
A)True
B)False
18
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Chapter 17: Global Production, Outsourcing, and Logistics
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Sample Questions
Q1) The level of output at which most plant-level scale economies are exhausted is referred to as the minimum efficient scale of output.
A)True
B)False
Q2) Discuss the strategic objectives of the production and logistics functions of an international firm.
Q3) A production process would create just 1 defect per six thousand products at Six Sigma.
A)True
B)False
Q4) With a(n) _____ system, suppliers, shippers, and the purchasing firm can communicate with each other with no time delay.
A) CAD
B) JIT
C) CAM
D) EDI
Q5) Describe the concept of minimum efficient scale. Discuss the implications of minimum efficient scale.
Q6) Explain how the strategic role of foreign factories evolves over time.
Page 19
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Chapter 18: Global Marketing and RD
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Sample Questions
Q1) Source effects and country of origin effects are always negative.
A)True
B)False
Q2) The "Swiss Made" label has leveraged several watch-making companies (for example, TAG Heuer) for decades now. This is an example of a ____ effect.
A) linguistic
B) country of origin
C) noise
D) cultural
Q3) If a producer sells through an import agent, a wholesaler, and a retailer, then:
A) a long channel exists.
B) the retail system must be concentrated.
C) the internet probably plays a big role in the economy.
D) there is no channel.
Q4) The entry of large discount superstores such as Tesco and Carrefour has shortened channel length in some countries.
A)True
B)False
Q5) What factors affect the success of a firm's international communications?
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Chapter 19: Global Human Resource Management
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Sample Questions
Q1) Discuss the concerns of organized labor.
Q2) _____ is the ability to understand why people of other countries behave the way they do.
A) Others-orientation
B) Cultural myopia
C) Perceptual ability
D) Cultural toughness
Q3) A manager might be sent on several foreign postings over a number of years to build his/her cross-cultural sensitivity and experience as part of a management development program.
A)True
B)False
Q4) Practical training is:
A) provided to foster an appreciation for the host country's culture.
B) aimed at helping expatriates improve their communication skills.
C) aimed at helping expatriate managers to build relationships in the host-country.
D) aimed at helping the expatriate manager and family ease themselves into day-to-day life in the host country.
Q5) What is human resource management? Why is HRM an important strategic component?
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Chapter 20: Accounting and Finance in the International Business
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Sample Questions
Q1) Firms use fronting loans to _____.
A) avoid host-country restrictions on the remittance of funds from a foreign subsidiary
B) implement a cost-based and fair pricing policy across an international business
C) increase the profit center revenue of a subsidiary functioning in another country
D) implement a market-driven and fair pricing policy across an international business
Q2) In countries such as the United States and Britain, firms typically raised capital by
A) obtaining funding from the government
B) borrowing money from national banks
C) issuing stock or bonds to investors
D) borrowing money from international banks
Q3) What are the main steps in the control process of a typical firm?
Q4) The budget is the main instrument of financial control in an organization. A)True B)False
Q5) Describe importance of accounting information in business.
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