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Department
Global Management Studies
Course
GMS 200
Professor
Masoomeh Moharrer
Semester
Winter

Description
Chapter 5: Global Dimensions of Management 1 Multiple Choice Questions CHAPTER INTRODUCTION 119. Which of the following statements accurately describe the implications of globalization? A. Human beings live and work in a global economy. B. International opportunities have important implications for businesses and their employees. C. National boundaries are rapidly blurring as businesses of all types and sizes compete globally. D. A and B. E. A, B, and C. E KT Fa 2 Schermerhorn & Wright: Management INTERNATIONAL MANAGEMENT AND GLOBALIZATION (STUDY QUESTION 1) 120. The worldwide interdependence of resource supplies, product markets, and business competition characterizes the age of __________. A. Trans-Asian management. B. The European Union. C. Free trade. D. A global economy. E. The multinational economy. D KT Fa 121. The global economy is characterized by the __________. A. Worldwide dependence of resource supplies, product markets, and business competition. B. Worldwide independence of resource supplies, product markets, and business competition. C. Worldwide interdependence of resource supplies, product markets, and business competition. D. Worldwide distribution of resource supplies, product markets, and business competition. E. Worldwide exploitation of resource supplies, product markets, and business competition. C GT Fa 122. __________ refers to the process of growing interdependence among resource supplies, product markets, and business competition on a worldwide basis. A. International management. B. Transnational interdependence. C. Globalization. D. Global management. E. The multinational economy. C KT Fa 123. Management activity that takes place in organizations with business interests in more than one country is known as __________. A. International management. B. Transnational interdependence. C. Globalization. D. Trans-regional management. E. Multinational economics. A KT Fa 124. __________ is culturally aware and informed on international issues. A. A cultural arbiter. B. The average tourist. C. A global manager. D. A and B. E. A and C. C KT Fa Chapter 5: Global Dimensions of Management 3 125. Which of the following does NOT describe the characteristics of global managers? A. Being informed about international developments B. Being competent in working with people from different cultures C. Being transnational in outlook D. Being focused on domestic market demands E. Being aware of regional developments in a changing world. D KT Fa Europe 126. __________ is a political and economic alliance of European countries. A. European Unified Countries Pact. B. European Free Trade Organization. C. European International Association. D. European Favoured Nation Agreement. E. European Union. E GT Fa 127. The European Union is an alliance of European countries that have __________. A. Signed a mutual defense treaty. B. Agreed to promote mutual economic growth by removing trade barriers. C. Created an international organization to represent the rights and interests of workers. D. Formed a political alliance to overthrow hostile governments. E. Decided to promote cultural exchanges. B KT Fa 128. The __________ is/are comprised of European countries linked together through favourable trade and customs laws to facilitate the free flow of workers, goods and services, and investments across national boundaries. A. European Countries. B. European Free Trade Organizations. C. European International Association. D. European Union. E. European Foreign Countries. D GT Fa 129. Which of the following are competitive implications for the European Union? A. Free flow of workers, goods and services, and investments across national boundaries. B. Each EU country has access to a market slightly smaller than the United States. C. Unfavourable trade and customs laws. D. All of the above. E. None of the above. A GT Ap 4 Schermerhorn & Wright: Management 130. Important business and economic agreements among the EU countries include all the following EXCEPT: A. Eliminating frontier controls and trade barriers. B. Creating uniform minimum technical product standards. C. Opening government procurement to businesses from all member countries. D. Discouraging a common currency among members. E. Unifying financial regulations. D GT Fa 131. Which of the following is NOT one of the agreements among the member nations of the European Union? A. Lifting competitive barriers in banking and insurance. B. Restricting government procurement of a member nation to businesses headquartered in that member nation.. C. Eliminating frontier controls and trade barriers. D. Creating uniform minimum technical product standards. E. Creating a common currency. B GT Fa 132. The __________ is the new common currency of the European Union. A. Zloty. B. Gold Standard. C. Euro. D. International Dollar. E. EU Franc-Mark. C KT Fa 133. Which of the following is NOT an expected benefit of a common European currency? A. A common currency will contribute to higher productivity. B. A common currency will produce lower inflation rates. C. A common currency will help create steady growth. D. A common currency will eliminate economic uncertainties. E. A common currency will have political uncertainties. D GT Ap The Americas 134. Countries that have joined together to form the North American Free Trade Agreement (NAFTA) include __________. A. Canada, Mexico, and the United States. B. Canada and the United States. C. Canada and Mexico. D. Mexico and the United States. E. Canada, Greenland, and the United States. A KT Fa Chapter 5: Global Dimensions of Management 5 135. The agreement that largely frees the flow of goods and services, workers, and investments among the United States, Canada, and Mexico is the __________. A. Transcontinental Trade Zone (TTZ). B. Free Trade Area of the Americas (FTAA). C. Northern Hemisphere Free Trade Association (NHFTA) D. North American Free Trade Agreement (NAFTA) E. Integrated Americas Trade Alliance (IATA). D GT Fa 136. The North American Free Trade Agreement has created a market of potential consumers larger than its rival, the __________. A. European International Association. B. European Union. C. European Foreign Countries. D. European Free Trade Organization. E. North American and European Association. B GT Fa 137. Which one of the following statements does NOT accurately describe the concerns of the countries that negotiated the North American Free Trade Agreement? A. Canadian firms worried about domination by United States manufacturers. B. American politicians were concerned about the potential loss of jobs to Mexico. C. Mexico feared a further intrusion of U.S. culture and values into Mexico. D. Americans complained that Mexican businesses had lower social standards regarding the use of child labour and protection of the environment. E. Canadians worried about a vast influx of Mexican immigrants into Canada, thereby providing a cheap source of labour. E GT Ap 138. Foreign manufacturing plants that are allowed to operate in Mexico with special privileges in return for employing Mexican labour are called __________. A. Mexican firms. B. Free-trade organizations. C. Privileged partners. D. Canamericos. E. Maquiladoras. E KT Fa 139. One of the controversies associated with NAFTA is the operation of manufacturing plants that are allowed to import materials, components, and equipment duty free. These firms are called __________. A. Free trade organizations. B. Privileged. C. Maquiladoras. D. Canamericos. E. Government subsidies. C GT Ap 6 Schermerhorn & Wright: Management 140. Critics of maquiladoras say they __________. A. Deny jobs to Americans. B. Create high social costs for Mexican border towns. C. Exploit lower-cost Mexican labour. D. All of the above. E. None of the above. D GT Fa 141. Advocates of maquiladoras say they __________. A. Bring increased employment to Mexicans. B. Bring increased prosperity to Mexicans. C. Help develop more highly skilled local workers. D. A and B. E. A, B, and C. E GT Fa 142. The __________ is a proposed free-trade zone that would stretch from Point Barrow, Alaska to Tierra del Fuego, Chile. A. Pan-American Free Trade Zone (PAFTZ). B. Free Trade Area of the Americas (FTAA). C. Western Hemisphere Free Trade Association (WHFTA) D. Transcontinental Free Trade Consortium (TFTC). E. Integrated Americas Trade Alliance (IATA). B GT Fa Asia and the Pacific Rim 143. __________ is the world’s largest consumer marketplace and a major exporter of clothing, computers, electrical parts and components, telecommunications equipment, and sporting goods. A. Japan. B. China. C. Malaysia. D. The Philippines E. Singapore. B GT Fa 144. Which of the following statements about Asia and the Pacific Rim is incorrect? A. Historically, Japan has possessed business strength. B. South Korea, Taiwan and Singapore are increasingly prominent in the business community. C. Asian countries represent about half of the global marketplace. D. Business growth in Malaysia and Thailand is already significant. E. Vietnam and the Philippines are making substantial progress with respect to business development. C GT Fa Chapter 5: Global Dimensions of Management 7 145. Which of the following characteristics accurately describe Asia and the Pacific Rim? A. Asian countries are the world’s top market for cars and telecommunications equipment. B. Low-cost labour is a business advantage in Asian countries. C. The growing availability of highly skilled brainpower is a business advantage in Asian countries. D. A and B. E. A, B, and C. E GT Fa 146. Which of the follsting statements does NOT accurately characterize the Asian economy at the beginning of the 21 century? A. Asia’s economy has suffered from financial problems. B. Asia is a megamarket. C. Asia has achieved superpower status in the world economy. D. Asia is still gaining power in the world economy. E. Asia has limited long-term potential in the global marketplace. E GT Fa Africa 147. __________ is a region of contrasts. On the one hand, ethnic turmoil and civil strife are present in many countries. On the other hand, this is a region rich with international business opportunities and natural resources. A. North America. B. Africa. C. Western Europe. D. Northern Europe. E. Australia and New Zealand. B GT Fa 148. __________ tends to discourage international business in parts of Africa. A. A low economic growth rate in sub-Saharan Africa. B. Poverty. C. A continuing AIDS epidemic. D. All of the above. E. None of the above. D GT Fa 149. A Harvard University study of the foreign investment environment in Africa concluded that __________. A. Africa’s contextual problems are manageable. B. Africa’s contextual problems should be viewedas opportunities. C. Africa presents a promising market if a company has the necessary managerial and organizational capabilities to deal with Africa’s unique business challenges. D. All of the above. E. None of the above. D GT Fa 8 Schermerhorn & Wright: Management 150. __________ links 14 countries of southern Africa in trade and economic development efforts. A. South African Free Trade Association (SAFTA). B. South African Development Community (SADC). C. South Africa Union (SAU). D. South Africa Economic Cooperative (SAEC). E. South African Community (SAC). B GT Fa 151. Which of the following statements accurately describes post-apartheid South Africa? A. South Africa is experiencing economic recovery and attracting outside investors. B. South Africa accounts for half the African continent’s purchasing power. C. Foreign investment in South Africa increased sharply after minority white rule ended. D. A and C. E. A, B, and C. E GT Fa INTERNATIONAL BUSINESS CHALLENGES (STUDY QUESTION 2) 152. Conducting for-profit transactions of goods and services across national boundaries is the foundation of __________. A. International business. B. Cross-national management. C. Multinational management. D. Cross-cultural intrapreneurship. E. Transborder entrepreneurship. A KT Fa Why Companies Go International 153. Businesses expand their operations to the international market for many reasons. Which of these is NOT a reason offered by your text? A. To expand profit potential. B. To take advantage of decreased governmental control in host countries. C. To increase access to neededraw materials. D. To draw on the financial resources of many nations. E. To have access to lower labour costs. B GT Fa 154. The reasons for engaging in international business include all of the following EXCEPT: A. Seeking profit potential. B. Seeking new markets to sell products. C. Seeking access to financial resources. D. Seeking access to lower labour costs. E. Seeking to eliminate ethical concerns. E GT Fa Chapter 5: Global Dimensions of Management 9 Forms of International Business 155. Which of the following does NOT accurately characterize the conduct of international business? A. Global sourcing, exporting/importing, and licensing/franchising are market entry strategies for conducting international business. B. Market entry strategies involve the sale of goods or services to foreign markets but do not require major capital investments. C. When a business is just getting started internationally, direct investment strategies are the usual way to begin. D. Direct investment strategies require major capital commitments but create rights of ownership and control over foreign operations. E. Joint ventures and wholly owned subsidiaries are direct investment strategies for conducting international business. C GT Fa 156. The process of purchasing materials, component parts, or business services from different countries around the world is known as __________. A. Exporting/importing. B. Licensing. C. Global sourcing. D. Direct investment. E. Joint venture. C KT Fa 157. The goal of ____________ is to take advantage of international wage gaps and the availability of skilled labour by contracting for goods and services in low-cost foreign locations. A. Exporting. B. Importing. C. Licensing. D. Global sourcing. E. Direct investment. D GT Fa 158. The exporting of products involves __________. A. Acquiring foreign-made products and selling them in domestic markets. B. Contracting to provide managerial and technical service to a foreign concern. C. Selling locally made products in foreign markets. D. Making investments in a foreign operation. E. Making direct investments in start-up operations abroad. C KT Fa 159. The importing of products involves __________. A. Acquiring foreign-made products and selling them in domestic markets. B. Contracting to provide managerial and technical service to a foreign concern. C. Selling locally made products in foreign markets. D. Making investments in a foreign operation. E. Making direct investments in start-up operations abroad. A KT Fa 10 Schermerhorn & Wright: Management 160. __________ is a form of international business through which a foreign company pays a fee for the rights to manufacture or sell another firm’s products in a specified region. A. An incorporated business. B. A joint venture. C. A multi-company operation. D. A licensing agreement. E. A compensation contract. D KT Fa 161. __________ is typically grants access to unique manufacturing technology, a special patent, or trademark rights. A. A licensing agreement. B. A compensation contract. C. A joint venture. D. A management contract. E. A foreign subsidiary. A GT Fa 162. A form of licensing in which a foreign firm buys the rights to use another’s name and operating methods in its home country is called __________. A. A licensing agreement. B. Franchising. C. A joint venture. D. A management contract. E. A foreign subsidiary. B KT Fa 163. A firm that establishes a direct investment in a foreign country through a co-ownership arrangement that pools resources, shares risks, and shares control of business operations is engaging in __________. A. A licensing agreement. B. A management contract. C. A joint venture. D. An overseas investment fund. E. An import/export arrangement. C KT Fa 164. Joint ventures are __________ that help participants to gain things through cooperation that otherwise would be difficult to achieve independently. A. Licensing agreements. B. Management contracts. C. Strategic alliances. D. Foreign partnering contracts. E. Import/export arrangements. C GT Fa Chapter 5: Global Dimensions of Management 11 165. Which of the following statements provide sound advice for selecting joint venture partners in a foreign country? A. Choose a foreign partner with activities that do not compete with or relate closely to your firm’s major business. B. Choose a foreign partner with a strong local workforce. C. Choose a foreign partner with good profit potential and sound financial standing. D. B and C. E. A, B, and C. D MN Fa 166. In selecting joint venture partners in a foreign country, a company should do all of the following EXCEPT: A. Choose a partner with future expansion possibilities. B. Choose a partner that is a new entrant to your firm’s line of business. C. Choose a partner with shared interests in meeting customer needs. D. Choose a partner with a strong local market for its own products. E. Choose a partner with good profit potential. B MN Fa 167. Which one of the following forms of international business transactions represent investments in a local operation that is completely owned and controlled by a foreign firm? A. Licensing agreements. B. A multinational corporation. C. Management contracts. D. Foreign subsidiaries. E. Joint ventures. D KT Fa Complications in the Global Business Environment 168. Foreign companies operating in the United States __________. A. May encounter quite different laws than they are accustomed to in their home countries. B. Must deal with antitrust issues that prevent competitors from regularly communicating with one another. C. Must deal with special laws regarding occupational safety and health, equal employment opportunity, and sexual harassment. D. All of the above. E. None of the above. D GT Fa 169. Common legal problems in international business involve all of the following EXCEPT: A. Environmental pollution restrictions. B. Incorporation practices and business ownership. C. Negotiating and implementing contracts with foreign parties. D. Protecting patents, trademarks, and copyrights. E. Handling foreign exchange restrictions. A GT Fa 12 Schermerhorn & Wright: Management 170. The __________ is an global institution that was established to promote free trade and open markets around the world. A. United Nations. B. World Trade Organization. C. International Trade Council. D. International Monetary Fund. E. World Court. B KT Fa 171. Members of the World Trade Organization agree to give each other the most favourable treatment for imports and exports, which is known as__________. A. International political kickbacks. B. Most favoured nation status. C. Global greasing. D. Most favoured bribery status. E. The Import/Export Bank. B KT Fa 172. Political calls for tariffs and favourable treatment to help shelter domestic businesses from foreign competition is known as __________. A. Free trade. B. Restrictive trade. C. Protectionism. D. Maquiladora. E. Strategic economic bidding. C KT Fa 173. Which of the following statements about the legal environment of international business is false? A. Legal environments vary widely from country to country. B. Organizations are expected to follow the laws of the host company in which they are operating. C. International businesses have greater difficulty in adapting to host company ways when home and host company laws differ significantly. D. Encouraging international trade and protecting domestic industries can lead to conflicting laws. E. Organizations with operations in many countries are expected to use the laws of the nation where their corporate headquarters is located to guide all operations. E GT Fa MULTINATIONAL CORPORATIONS (STUDY QUESTION 3) 174. The best definition of a true multinational corporation is __________. A. Any firm that does business abroad. B. A business firm that has extensive operations in one foreign country. C. Any import/export firm. D. Any joint venture with a foreign firm. E. A business that has extensive international operations in more than one foreign country. E KT Fa Chapter 5: Global Dimensions of Management 13 175. __________ have nonprofit missions and operations that span the globe. A. Charities. B. Nonprofit organizations. C. Nongovernmental organizations. D. Multinational organizations. E. Multinational corporations. D KT Fa Types of Multinational Corporations 176. A company that operates worldwide without being identified with one national home is known as a __________. A. Multinational corporation. B. Transnational corporation. C. International corporation. D. Antidomestic corporation. E. Supernational corporation. B KT Fa 177. Transnational corporations view the entire world as their domain for __________ A. Acquiring resources B. Locating production facilities. C. Marketing goods and services D. A and B. E. A, B, and C. E GT Ap 178. Which of the following statements about transnational corporations is NOT accurate? A. Transnational corporations seek total integration of global operations. B. Transnational corporations try to operate across borders without home-based prejudices. C. Transnational corporations make major decisions from a home-based perspective. D. Transnational corporations distribute work among worldwide points of excellence. E. Transnational corporations employ senior executives from many different countries. C GT Ap Pros and Cons of Multinational Corporations 179. Which of the following are mutual benefits for a multinational corporation and a host country? A. Growth. B. Learning. C. Development. D. B and C. E. A, B, and C. E GT Fa 14 Schermerhorn & Wright: Management 180. All of the following are benefits to the host country of a multinational corporation EXCEPT: A. Technology transfer. B. Reduced tax base. C. Capital development. D. Increased employment opportunities. E. Development of local resources. B GT Fa 181. Host countries sometimes complain about the presence of multinational firms. These complaints include all of the following EXCEPT: A. MNCs may dominate the local economy. B. MNCs may export jobs to other countries. C. MNCs fail to market products or services needed in the local economy. D. MNCs may fail to transfer their most advanced technology. E. MNCs fail to help domestic firms develop. C GT Fa 182. Multinational corporations have several complaints about host countries. Which of the following is NOT one of these complaints? A. Foreign exchange restrictions. B. Pressure to buy raw materials at inflated prices. C. Pressure to keep local wage rates low. D. Failure to protect intellectual property. E. Failure to uphold contracts. C GT Fa 183. Multinational corporations are often criticized at home for __________. A. Diverting labour-intensive jobs from the domestic labour force to foreign labour markets. B. Diverting capital investments away from the domestic market. C. Allowing or encouraging corrupt practices in their foreign subsidiaries. D. All of the above. E. None of the above. D GT Fa Ethical Issues for Mu
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