44. (1) Mechanisms to maintain culture include all of the following except
The hiring and promotional practices of the organization
Ongoing cultural assessments
45. (1) Exporting may not be appropriate if lower-cost locations for manufacturing the product can be found abroad.
46. (1) The main advantage of greenfield investment is that it gives the firm a much greater ability to build the kind of subsidiary company that it wants.
47. (1) The advantages frequently associated with entering a market early are commonly known as
48. (1) A strategic commitment
Has a short-term impact alone
Is difficult to reverse
Cannot change the competitive playing field
Does not have any influence on the nature of competition in a market
49. (1) A large-scale entrant is more likely than a small-scale entrant to be able to capture first-mover advantages associated with
Diseconomies of scale
Diseconomies of scope
50. (1) The _____ entrant is more likely than the _____ entrant to be able to capture the first-mover advantages associated with demand preemption, scale economies and switching costs.
Small scale; large scale
Small scale; moderate scale
Large scale; small scale
Moderate scale; large scale
51. (1) Most service firms have found that _____ with local partners work best for controlling subsidiaries.
52. (1) To increase the potential for a successful acquisition, a firm should
Always bid low to allow for partial failure
Try to acquire a firm with a very different corporate culture so there is no forced “overlap”
Seek companies only from similar national cultures
Screen the foreign enterprise to be acquired
53. (1) Which of the following is not important in the acquisition process?
Firms should strive to limit unwanted management attrition after acquisition
An integration plan should quickly be implemented
Proper screening of the company to be acquired should take place
The hubris hypothesis should be maintained
54. (1) The letter of credit system effectively transfers the issue of trust to the bank.
55. (1) Which of the following is true of reactive firms?
They may not even consider exporting until their domestic market is saturated
They create excess productive capacity and actively hunt for opportunities in foreign markets
Almost all large firms fall under this category
They systematically scan foreign markets for profitable export opportunities
56. (1) Great trading houses in Japan are called
57. (1) One drawback of relying on EMCs is that
They are not conversant with the ins and outs of the exporting process
They have no knowledge of different business mores
The company can fail to develop its own exporting capabilities
The company is unable to avoid common pitfalls
58. (1) Because of the low value-to weight ratio of many pharmaceutical and electronics products, there is great pressure to produce these products in the optimal location and serve the world from there.
59. (1) Concentration of production makes most sense when trade barriers are high.
60. (1) A firm that has integrated horizontally is making all or part of a product in-house.
61. (1) Identify an advantage of a low minimum efficient scale.
Allows the firm to accommodate demands for local responsiveness
Discounts currency risk by manufacturing all products in one location
Helps keep overheads low at the expense of fixed costs
Helps a firm to standardize its products for all markets
62. (1) Differences in technical standards can prevent a firm from standardizing products across markets.
63. (1) This refers to impact a firm’s pricing strategy in one market may have on its rivals’ pricing strategy in another market.
Experience curve pricing
64. (1) The most attractive staffing policy is the ethnocentric approach.
65. (1) There is an increasing trend towards an ethnocentric staffing policy.
66. (1) Research into expatriate failure revealed that consistently, one of the reasons for the premature return of employees for U.S. multinationals was the inability of the spouse to adjust.
67. (1) An expatriate’s base salary normally varies from the base salary for a similar position in the home country.
68. (1) Which of the following is a problem that limits a firm’s ability to pursue a geocentric policy?
The lack of management transfers from home to host countries and vice versa, can lead to a lack of integration between corporate headquarters and foreign subsidiaries
The higher pay managers on an international fast track enjoy may be a source of resentment within a firm
The firm fails to understand host-country cultural differences that require different approaches to marketing and management
It limits advancement opportunities for host-country nationals
69. (1) Which of the following is true about cultural training?
It should be provided only to the expatriate
Training should be limited to a study of language and business practices
It helps the expatriate appreciate the host-country culture
It can be offered to the spouse/family after it is clear the foreign posting is a success
70. (1) _____ makes it difficult to evaluate the performance of expatriate managers objectively.
71. (1) Unions’ bargaining power is derived largely from their
Ability to threaten to disrupt production
Ability to change the organizational culture
Willingness to adapt to new employment practices
Ability to show restraint in negotiations
72. (1) Similarities in the accounting systems of countries are sometimes due to the countries’ close political and/or economic ties.
73. (1) The purpose of consolidated financial statements is to provide accounting information about a group of companies that recognize their economic interdependence.
74. (1) Identify the incorrect statement pertaining to accounting information.
It is often referred to as “the language of business.”
It is means by which firms report their income to the government
It is consistent and standard across all countries
It enables the providers of capital to assess the value of their investments
75. (1) Which of the following occurs when an investor based in one country enters the capital market of another nation to invest in the stocks or bonds of a firm based in that country?
76. (1) The International Accounting Standards Board
Has enough power to enforce its standards
Was formed to replace the International Accounting Standards Committee
Has 120 members responsible for the formulation of new financial reporting standards
Requires approval from 80 percent of its 120 members to issue a new standard
77. (1) This method translates assets valued in a foreign currency into the home-country currency using the exchange rate that exists when the assets are purchased.
Current rate method
Operating cost accounting method
Historic cost principle
78. (1) If the net present value of the discounted cash flows is slightly less than zero, the firm should go ahead with the project.
79. (1) The relationship between a country’s relative inflation rates and changes in exchange rates is,
Much closer than what theory would predict
Not reliable in the short run
Totally reliable in the long run
According to empirical studies, non existent in the long run
80. (1) This is a loan between a parent and its subsidiary channeled through a financial intermediary, usually a large international bank.