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Exam 8: Global Management

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Question 1

Multiple Choice

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The primary disadvantage of wholly owned business is the _____.

A) dumping of products
B) countertrading of goods
C) nontariff barriers associated with buying existing businesses
D) difficulty in adjusting to a new culture
E) cost of building new operations

F) A) and B)
G) A) and C)

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Question 2

Multiple Choice

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Which of the following should be a key issue for a company once it decides to go global?

A) Recruit additional employees for the company.
B) Strike the right balance between global consistency and local adaptation.
C) Train employees to handle business abroad.
D) Determine the number of factories to be built in foreign countries.
E) Determine the number of employees to be trained to handle responsibilities.

F) A) and B)
G) A) and C)

Correct Answer

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B

Question 3

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The North American Free Trade Agreement (NAFTA) is a regional trade agreement between Canada and the United States. No other nations have signed this trade agreement.

Robert Mondavi Wineries entered into an agreement with Baron Philippe de Rothschild, owner of Boreaux's First Growth chateau, to produce a top quality wine in California. The two companies working together to create a new product is an example of _____.

_____ refers to the risk associated with changes in laws and government schemes that directly affect the way foreign companies conduct business.​

Which of the following is true of global business?

A firm using a(n) _____ strategy to prevent or reduce political risks will lobby foreign governments or international trade agencies to change laws, regulations, or trade barriers that hurt its business in that country.

In a multinational firm, managers at company headquarters value _____ because it simplifies decisions.

Approximately one-third of multinational companies enter foreign markets through wholly owned affiliates.

Documentary training focuses on _____.​

It appears that all companies follow the phase model of globalization when entering foreign markets.

What are the two types of political risk that affect companies conducting global business?

Identify and discuss the basic components of an attractive business climate. Comment on the extent to which a fast-food restaurant franchise might make a different assessment of relevant factors when compared to a capital-intensive business such as an oil refinery and pipeline company.

According to Hofstede, when people in a culture are oriented to the present and seek immediate gratification, that culture is described as _____.

Multinational companies typically have no difficulty determining the correct balance between global consistency and local adaptation.

If companies focus too much on local adaptation, they run the risk of losing the cost effectiveness and productivity that result from using standardized rules and procedures throughout the world.

Historically, companies have generally followed the phase model of globalization.

The purpose of the Maastricht Treaty of Europe was to create the European Union with one common currency, the euro, for its members.

Companies that want to conduct business in South Mainland face a lot of political uncertainty. Due to this reason, they do not enter directly into the market. Instead, they use licensing and franchising to conduct business in the country. In this context, the companies are using a(n) _____ strategy to deal with the political risks.

Compare the concepts of global consistency and local adaptation as policies for entering foreign markets.