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BUS 325 Complete Test Bank Chapter 1 Through 10 – Strayer – A+ Graded

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CHAPTER 1: Introduction


1. An inpatriate is an employee transferred out of the home base into the firm’s international organization.

2. The HR department is the major user of language translation services.

3. The IHR department does not get involved in the employee’s personal lives such as marital status and children when considered for assignments.

4. Less developed countries tend to have cheaper labor but more government regulations.

5. Culture shock is a phenomenon experiences by people who move across cultures.

6. A domestic HRM is involved with employees within one national boundary.

7. Compensation and benefit programs are not an activity of internal human resource management.

8. Awareness of cultural differences is not essential for the HR manager at corporate headquarters. It is only important for expatriate employees as well as those at the host location.

9. Multidomestic industries is one in which competition in each country is essentially independent of competition in other countries.

10. Multinational organizations need to strive for consistency in the ways of managing people on a worldwide basis in order to build, maintain and develop their corporate identity.

11. Cultural awareness is reflected by knowing that local employees feel an obligation to employ extended family even if they are unqualified for the position.

12. If a firm is in a multidomestic industry, the role of HR department will most likely be more domestic in structure and orientation.

13. A large home market is one of the key drivers for seeking a new international market.

14. Local HR activities, such as human resource planning and staffing, changes as a foreign subsidiary matures.

15. The nationality of an employee is not a major factor in determining the person “category” in an international firm.

16. Human considerations are as important as financial and marketing criteria in making decisions about multinational ventures.

17. Global mindset is necessary for the success of an international company.

18. The US had 8 companies in the top 30 multinationals ranked by the transnational index.

19. Cross- culture management is examining human behavior within organizations from an international perspective.

20. The way diversity is managed within a single national context should transfer to a multinational context without modification.

21. It is a correct assumption that culture is usually used as a synonym for nation or national difference represents culture differences.


1. An expatriate:
a. Is an employee transferred out of their home base to the firm’s international operation
b. Is an employee transferred into a parents organization
c. Is an employee who understands international business operations
d. Is an employee who has works in more than one country

2. Which of the following is not a category of an employee in an international firm?
a. Third –country national c. Parent-country national
b. Host-country national d. Multi-country national

3. Which department of an organization is the major user of language translation services?
a. Tax c. Human resources
b. Shipping d. Operations

4. Tax equalization policies concerning expatriates are designed to :
a. Ensure no tax incentives are associated with any particular international assignment
b. Ensure taxes are paid
c. Ensure employees are aware of tax responsibilities
d. Keeps records up to date

5. The direct costs of international assignment failures can be as high as ___times the costs of those for similar failure in a domestic assignment:
a. Five c. Ten
b. Three d. Eight

6. One major difference between domestic and international HRM is:
a. Staff training c. housing relocation
b. Tax equalization d. risk

7. Which of the following is not a function of internal resource management?
a. Staffing c. Government regulations
b. Training and development d. Compensation

8. Which of the following is not a major external factor that influences IHRM?
a. The state of the economy
b. Type of government
c. Generally accepted practices of doing business
d. Regulatory requirements

9. Cultural difference is not necessarily equivalent to:
a. Social Factors
b. Values and beliefs
c. National Differences
d. Shared and recognized ways of looking at the world

10. A multidomestic industry is:
a. One in which competition in each country is essentially independent of other countries
b. One in which a firm competitive position in one’s country is significantly influenced by its position in other countries.
c. One in which domestic products are not sole
d. One in which many products are sold

11. Examples of a global industry include all of the following except:
a. Commercial air craft c. Copiers
b. Semi-conductors d. Insurance

12. Series of linked domestic industries in which rivals compete against each other on a worldwide basis is:
a. Multidomestic industry c. Conglometric industry
b. Global industry d. Automobile industry

13. Emnic refers to which kind of specific aspect of concepts or behaviors?
a. Language c. Country
b. Culture d. History

14. What is a key driver for firms seeking international markets?
a. A small home market c. Large home markets
b. Tax regulations d. Managerial incompetence

15. Which ratio is not part of” index of transnationality”?
a. Foreign assets to total assets c. Foreign debt to total debt
b. Foreign sales to total sales d. Foreign employment to total employment

16. Which of the following is a global mindset?
a. Focus on domestic issues
b. Minimize differences between international and domestic environments
c. Transferability between domestic and international HRM practices
d. To formulate and implement HR policies that develop globally oriented staff

17. An asymmetric event is:
a. Terrorist attack on 9/11 c. HR activities
b. London 2012 Olympics d. Weekly staff training

18. All of the following is a difference between international and domestic HR except:
a. Risk exposure c. More HR activities
b. More external influences d. Less involvement in employee lives

19. What activity in international human resource would not be required in a domestic environment?
a. Staff orientation c. Terrorism considerations
b. Tax equalization d. Relocation assistance

20. As foreign subsidiaries matures the local HR activities:
a. Have broadening responsibilities
b. Revert to the home office
c. decrease as government relations are understood
d. Stay largely the same

21. Which three dimensions are presented in Morgan’s model of IHRM?
a. Types of employees, countries and industries
b. Types of employees, countries and human resource activities
c. Types of products, industries and human resource activity
d. Types of employees, labor problems and human resource activity

22. Differences between domestic and international HRM include:
a. The cultural environment, the extent of reliance of the multinational on its home country or domestic market and the attitudes of senior management
b. The industry, the technology employed and communication capabilities
c. The cultural environment, the industry and the technology employed
d. The cultural environment, the attitudes of senior management and the organizations authority structure

23. Senior managers with little international experience:
a. Are very successful in multinational operations
b. Assume that there is no transferability between domestic and international HARM practices
c. Assume that there is a great deal of transferability between domestic and international HRM practices
d. Are usually very eager to take on international responsibilities

24. Successful internationalizing the HR function require all except:
a. International mindset of senior management
b. Right people to manage
c. Global mindset
d. International taxation procedures

25. In Porter’s value-chain model:
a. HRM is described as a primary activity
b. HRM is described as a support activity
c. HRM is not mentioned as an activity
d. HRM is described as an incidental activity

26. HRM in the multinational context contains an overlap between elements of:
a. Cross-cultural management and leadership
b. Cross-cultural management and strategic management
c. Strategic management, comparable human resource and industrial relations systems
d. Cross-cultural management, comparable human resource and industrial relations systems

27. A Japanese citizen working in Hong Kong for a Japanese multinational would be classified as:
a. A host country national (HCN) c. A parent country national (PCN)
b. A third country national (TCH) d. A related country national (RCN)

28. Human Resource Management (HRM) activities include all of the below EXCEPT:
a. Human resource planning c. Personal family planning
b. Performance management d. Training and development

29. International HRM is reflected in:
a. The need for a narrower perspective c. The need for a judgmental perspective
b. The need for a short term perspective d. The need for a broader perspective

30. As a foreign subsidiary matures:
a. The local HR unit’s responsibilities for planning, training and compensation would broaden
b. The responsibilities of planning, training and compensation would narrow
c. The local HR unit’s responsibilities for planning, training and compensation would stay the same
d. The local HR unit’s responsibility for planning, training and compensation would end


1. What are the 3 broad approaches for international human resource management and how do they relate to each other?

2. What are the 3 categories of employees in an international firm?

3. What are at least 2 types of risk exposure that international companies incur that domestic companies are not as liable to incur?

4. Why is an awareness of cultural differences important in an international company?

5. What is the difference between a multidomestic industry and a global industry?

CHAPTER 2: The Cultural Context of IHRM


1. The first contributions to cross-cultural management research were made in the late 1930s.

2. Unforeseen conflicts and lower performance in many foreign business enterprises created doubts about how easily concepts and management research from the English speaking world could be transferred to other cultures.

3. One of the advantages of cross cultural studies is that there is one, widely accepted definition of the meaning of culture.

4. Hansen emphasizes culture as the standardization – the consistency of collective behavior.

5. Hofstede the Dutch researcher, famously likens or company’s culture to the “software of the mind”.

6. Schein considers “artefacts” as the invisible and unconscious conventions and perceptions deeply held by members on a culture.

7. There may be large similarities of the artefact level within the European Union, but values and assumptions held by members of various nations in the EU may differ significantly.

8. Cross cultural management studies aim to describe and compare the working behavior in various cultures.

9. Hofstede finally distinguished three cultural dimensions: power distance, femininity vs. masculinity and individualism vs. collectivism.

10. Power Distance refers to the extent to which the members feel threatened by uncertainty, ambiguous or unstructured situations.

11. According to Hofstede a feminine orientation comprises the pursuit of financial success and a strong performance management approach.

12. Countries with weaker uncertainty avoidance are more likely to bring about fundamental innovations in weak processes as they have a greater tolerance for deviant thinking.

13. Collectivist society companies have more informal relationships between supervisors and employees.

14. The Mediterranean culture (France, Italy, Belgium and Spain) are characterized by small power distance and high collectivism.

15. The German speaking countries such as Germany, Austria and Switzerland are characterized by a strong tendency of uncertainty avoidance and relatively low power distance.

16. A criticism of Hofstede’s research is that he equates culture to national borders.

17. The Globe study distinguishes between practices (what should be) and values (what is).

18. The participation of 17 scholars from around the world helps to avoid a one-sided, Western focus to the research project.

19. The Trompenaars and Hampden-Turner study presents three aspects to culture: relationships between people, concept of time and the concept of nature.

20. Cultural convergence relates to assuming a long-term stability in cultural differences.


1. Cross-cultural management research is based on the assumption that:
a. There are no real differences in management practices in various countries and the respective environments do not matter.
b. There are differences in management practices in various countries but the respective environments do not explain these differences.
c. There are differences in management practices in various countries and the respective environment explains these differences.
d. There are differences in management practices in various countries and these differences are explained by company strategy alone.

2. A major criticism of cross-cultural management studies is:
a. The construct of “culture” is undefined or inadequately defined and/or operationalized at the start of the study.
b. The construct of “culture” is defined too specifically for use across nations.
c. Research is done almost exclusively from a North American perspective.
d. There have been too few cross cultural research studies completed to assess the research.

3. Schein’s concept of culture consists of:
a. Ways of thinking, feeling and reacting
b. Customs, practices and standardization
c. Research containing dense infinitive descriptions
d. Artefacts, values and assumptions

4. Hofstede’s cultural dimensions are:
a. Universality, uncertainty avoidance, individualism vs. collectivism, aspiration vs. resignation and referentism.
b. Power distance, uncertainty avoidance, femininity vs. masculinity, individualism vs. collectivism dynamics.
c. Power distance, uncertainty avoidance, individualism vs. collectivism and contextualism vs. universalism.
d. Universalism vs. contextualism Confucian dynamics, individualism vs. collectivism and consumerism vs. theft

5. Individualism vs. collectivism refers to:
a. How government agencies act towards citizens
b. The extent to which individual initiative and responsibility to close family is valued in society as contrasted to group initiative and responsibility to an extended definition of family as socially valued
c. The extent to which individuals relate to the government as opposed to individuals being alienated from their government
d. The extent to which individual achievements are socially recognized and rewarded as opposed to recognition of wider social collectives – groups, organizations, etc.

6. Under Confucianism dynamics, orientations can be either:
a. Long-term or short-term c. Adaptable or subordinate
b. Paternal or individualistic d. Political or idealistic

7. According to the results of the Hofstede study:
a. U.S. culture is characterized more by collectivity behavior, unlike Anglo Saxon countries such as Australia or the United Kingdom
b. U.S. culture is characterized more by collectivity behavior, like Anglo Saxon countries such Australia or the United Kingdom
c. U.S. culture is characterized more by individualist behavior, unlike Anglo Saxon countries such as Australia or the United Kingdom.
d. U.S. culture is characterized more by individualist behavior, like Anglo Saxon countries such as Australia or the United Kingdom.

8. According to Hofstede, some Asian cultures such as Singapore and Hong Kong:
a. Score low on uncertainty avoidance and low on power distance
b. Score low on uncertainty avoidance and high on power distance
c. Score high on uncertainty avoidance and low on power distance
d. Score high on uncertainty avoidance and low on power distance

9. The cultural context impacts HRM practices:
a. Not at all
b. Only in the HR practice areas of Compensational Task Distribution
c. In the HR practice areas of Recruitment, Selection, Training and Development, Compensation and Task Distribution
d. Only in the HR practice areas of Training and Development and Task Distribution

10. Hofstede identifies a strong tendency or masculinity with a high tendency for uncertainty avoidance in:
a. The Scandinavian cluster c. The German speaking cluster
b. The Asian Tigers clusters d. The Gallic cluster

11. Hofstede’s approach to cross cultural management research:
a. Has been the subject of ongoing debate and criticism.
b. Has been largely ignored by other researches
c. Has been almost universally accepted
d. Has not been integrated into a wide range of alternative cross cultural research projects

12. Hofstede’s study is classified or based on:
a. Cultures c. Countries
b. Ethnic subgroup d. Common cultural regions

13. The GLOBE research tries to study the complex relationships between:
a. Culture, leadership behavior, organizational effectiveness, social co-habitation conditions and the economic success of societies.
b. Culture, leadership behavior, political institutions, social legislations, corporate strategies and the economic success of societies.
c. Culture, economic development, social progress, and multinational dynamism.
d. Culture, leadership behavior, organizational effectiveness, employee commitments and satisfaction, social dynamics and the economic success of societies.

14. The GLOBE study survey contains:
a. Contains exactly the same dimensions as Hofstede’s surveys
b. Contains far fewer dimensions than the Hofstede surveys
c. Distinguish between practices (as is) and values (should be).
d. Contains only questions on values (should be).

15. Results from the GLOBE study were used to distinguish ______”cultural regions.”
a. Five c. Ten
b. Seven d. Twelve

16. One criticism of the GLOBE study is:
a. That the research team is too much weighted to North American researchers
b. The dimensions are less refined and detailed than Hofstede’s dimensions of culture
c. The research focuses too much on very small firms
d. The focus of the study is only in three industries – finance, food and telecommunications

17. The GLOBE study:
a. Distinguishes between organizational cultures and national cultures.
b. Does not distinguish between organizational cultures and national cultures
c. Never distinguishes between subcultures in some nations for which data was collected
d. Distinguishes between subcultures in all 62 nations for which data was collected

18. The Trompenaars and Hamplen-Turner study distinguishes three overarching aspects of culture, namely:
a. Artefacts, values and assumptions
b. Relationships between people, the concept of time and the concept of nature
c. Reality, time and space
d. Descriptive values, aspirational values and critical values

19. Trompenaars and Hampden-Turner’s cultural dimensions is Ascription vs. :
a. Description c. Achievements
b. Conscription d. Acclimation

20. According to Trompenaars and Hampden-Turner, societies that attempt to control nature to a very high degree are described as having:
a. External control c. Distinct control
b. Internal control d. General control

21. As applied research, the Trompenaars and Hampden-Turner study:
a. Is backed up by extensive duplicate studies in a variety of countries and industries
b. Has repeatedly demonstrated validity and reliability
c. Has not demonstrated validity nor reliability
d. Provides an explicit rationale for the origins and operationalization of the seven cultures/dimensions

22. According to Trompenaars and Hampden-Turner, members of specified cultures:
a. See business relationship more personally
b. Take subjective and contextual variables into consideration when making a decision
c. Demand precise, unobjective analysis of circumstances and presentation of results
d. Emphasize intentions and emotions in making a decision

23. Hall and Hall’s research emphasizes four cultural dimensions:
a. Context of communications, spatial orientation, the concept of time and information speed
b. Context of communications, precision of communications, objectivity in communication and information speed
c. Context of communication, privacy of communication, the concept of time and information speed
d. Context of communications, spatial orientation, distribution of communication and feedback mechanisms

24. Hall and Hall’s research:
a. Focuses on the relationship between geography and culture
b. Focuses on the relationship between regional resource bases on culture
c. Focuses on the relationship between communication and culture
d. Focuses on the relationship between faith and culture

25. Hall and Hall, Trompenaars and Hampden-Turner all:
a. Provide academically valid, rigorous and reliable research bases for their models
b. Largely agree on the underlying dimensions of culture
c. Have large, geographically diverse data sets to draw on to support their models
d. Focus on offering a practical template allowing individuals to perceive and handle cultural differences

26. According to researchers like Barry Gerhart:
a. Cross-cultural research or emphasizes the influence of culture and business practices
b. Cross-cultural research actually understates the influences of culture on business practices
c. Cross cultural research as yet to show any influence of culture on business practices
d. Cross cultural research is insufficient in quantity or quality of findings to make any judgment of how culture may or may not influence business practices

27. Cultures develop over time:
a. So quickly and so unpredictable that studies become almost immediately obsolete
b. In a very slow and predictable manner
c. Such that surface level artefacts may change relatively quickly, but deeper behaviors and assumptions may take much longer to change
d. Inevitably toward a convergent, single “superculture”

28. One study by Child, reviewing research on the development of cultures concluded:
a. Studies on the macro level (organizations structure) found evidence for divergence or growing differences in cultures
b. Studies on the micro level (behaviors by employees) found enhance for convergence or the lessening of differences in cultures
c. Studies on the macro level (organizational structure) found evidence for convergence, or the lessening of differences in cultures
d. Studies on both the macro and micro level found evidence for convergence or the lessening of differences in cultures

29. Due to growing interdependence and a high flow of migration:
a. Culture is not confined to a territorially limited area
b. Culture is still largely confined to a territorially limited area
c. Cross-cultural issues are not nearly as important as they were on the past
d. HR will largely be unaffected

30. Generational changes in world societies:
a. Create no real changes in the demand for professional relationship and employee retention
b. Result in potential employees who have been brought up with computers and are fast self-organized learners as in Generation Y
c. Result in potential employees who have been brought up with computers and who are therefore inflexible as to work routine and multitasking as in Generation Y
d. Result in potential employees who are willing to sacrifice their personal lives for their careers as in Generation Y.


1. Present the general definition of the concept of culture as presented in the text.

2. Discuss the five cultural dimensions as presented in Hofstede’s cross-culture management study.

3. Outline and discuss the ways in which cultural context can impact HRM policies of recruitment and selection, training and development, compensation and task distribution.

4. In what significant ways is the GLOBE study (a) similar to Hofstede’s research, (b) different from Hofstede’s research?

5. What does the discussion on “the development of cultures” lead you to conclude about the issues of convergence and divergence?

CHAPTER 3: The Organizational Context


1. An export manager is typically the first international HR position in a new international company.

2. Purchasing an international company automatically creates a separate international division of a company.

3. The Inpatriate manager performs a major role in identifying employees who can direct operations in a foreign subsidiary.

4. International division acting as an independent separate unit cannot be tolerated as the firm’s international activities become strategically more important.

5. The matrix structure area managers are responsible for the performances of all products within the various countries that comprise their regions.

6. Less human resources planning and management development are in the matrix structure of operations than traditional organization.

7. Mixed structures are more complex and harder to explain and implement/control than a matrix structure.

8. Intra-organizational networks comprise the organization’s headquarters and the numerous subsidiaries.

9. The metanational form is described as a global tournament.

10. Centralized HR companies are operated within a matrix structure.

11. Training, performance, appraisals and staff movements are not impacted by the HR structural form.

12. Europeans tend to take a different structural path than the US.

13. Chinese firms have many international operations.

14. European multinational firms are mainly from Germany.

15. Japanese based multinational firms are the only firms to successfully balance operations in all the regional blocks.

16. Formal structure controls are an international firm’s primary source of control.

17. Training and development, program reward systems and promotion are activities that reinforce company value systems.

18. Half of the US firms reported that HR functions were unrelated to the nature of the firm’s international operations.

19. HR departments are emerged in policies and procedures in the early international or export stage.

20. Centralized HR companies are characterized by devolving the HR responsibilities to a small group who reports to corporate headquarters.


1. “Born globals” are:
a. Company formed with the international market in mind
b. International firm formed by acquisition
c. Company grown into an international company by market demands
d. Company owned by people of different nationalities

2. Typically the initial stage of a firm entering international operations is:
a. Export c. Investment
b. Licensing d. Employment

3. Which category of employee is typically used in key sales subsidiary position in a new developing international company:
a. Parent Country National c. Third Country National
b. Host Country National d. Multi Country National

4. The second stage of a new international company typically involves which department:
a. Sales c. Employment
b. Export d. Human resources

5. Which stage of international operations tend to create a separate international division in a company:
a. Foreign production/service operations c. Physical location
b. Exporting d. Sales

6. “Miniature replicas” are:
a. Subsidiaries structured to mirror that of domestic organizations
b. Small scale reproduction of each firm to show at office meetings
c. Company created to make miniature building
d. Foreign company purchased to create a multinational company

7. Many companies in the developmental stage of internationalization will maintain control by:
a. Placing PCN in all key positions
b. Placing a human resource division on location
c. Going to governmental sources for support
d. Hiring locals in all aspects of the organization

8. The “think global, act local” paradox:
a. Purchase vegetables at farmers markets grown in another country
b. Push for local responsiveness toward global integration
c. Results in a foreign subsidiary hiring local employees
d. Reflects the hierarchy of needs for a multinational company

9. A matrix structure:
a. Keeps profit centers but adds worldwide product managers
b. Integrated its operations across more than one dimension
c. Relies heavily on social networking
d. Creates a worldwide product division

10. One advantage of a matrix structure is:
a. Allows all departments to network efficient
b. Brings conflicts of interest out into the open
c. Provides the company with uniform corporate values
d. Allows each locations to have its own self-contained division

11. A major contributing factor of an unmanageable matrix structure is:
a. Confused human resource department c. Clear responsibilities
b. Standard reporting procedures d. Dual reporting requirements

12. The complex network of interrelated activities in a MNE can be described in the following structure:
a. Functional c. Heterarchy
b. Product division d. Bureaucratic

13. Transnational strategies of globalization are characterized by:
a. Ability of the multinational to formulate and implement the required human resource element
b. A company doing business in more than one country
c. Organization form that is characterized by an interdependence of resources and responsibilities across all business units
d. Network of independent companies in different countries

14. A common theme between heterarchy, matrix and transnational is:
a. Networks of communication is imperative
b. Staff transfers play a critical role in integrations and coordination
c. Legal forms are very different
d. The reduced role of communications requirements

15. The management of a multi-centered networked organization is:
a. Simple c. Organized
b. Inconsequential d. Complex

16. The following types of units are regarded in a metanational firm EXCEPT:
a. Sensing unit, financial unit and performing unit
b. Magnet unit and entrepreneurial unit
c. Sensing unit, magnet unit and marketing unit
d. Marketing unit, magnet unit, financial unit

17. HR functions are described in the following structural forms EXCEPT for:
a. Centralized HR c. Matrix HR
b. Decentralized HR d. Transition HR

18. The European path approach to a global matrix tends to emphases:
a. Worldwide product division approach c. Functional approach
b. Area/geographic division approach d. Corporate subsidiary approach

19. Korean conglomerates have a strong preference for:
a. Greenfield building approach c. Grow within approach
b. Bamboo network/family approach d. Growth-through-acquisition approach

20. Clan control is defined as:
a. Hiring family relations to maintain control
b. Hiring people from similar backgrounds to ease cooperation
c. Social control to supplement or replace traditional structures
d. Control by personal influence

21. Multinational firms are divided into the following regional block EXCEPT:
a. North America c. Europe
b. Asia d. Australia

22. An important forum for the development of personal networks is:
a. Relocating staff on a regular basis c. Training programs held in regional centers
b. Luncheon meeting d. Weekly department meetings

23. Social Capital emphasizes the need for:
a. Recycling facilities for community
b. A customer list in an organization
c. Employees with poor social skills
d. Contacts and ties that facilitate knowledge sharing

24. The process of socializing people so that they come to share a common set of values and beliefs that shapes their behavior is:
a. Networking c. Matrix structure
b. Corporate culture d. Social investment

25. Transition companies are characterized by:
a. Large well-resourced HR departments
b. Devolving HR responsibilities to a small group
c. HR relocations to a subsidiary company
d. Medium sized corporate HR department

26. The matrix structure:
a. Is rather simple to control
b. Is characterized by a manager who belongs to two units at the same time
c. Is one of the first structures used by newly-formed international firms
d. Is difficult to set up, but once in place it is easy to maintain

27. Matrix structures:
a. Can be managed by anyone with basic skills
b. Requires a manager with some experience, but who insist on no ambiguities
c. Requires managers who know the business in general, who has good interpersonal skills and who can deal with ambiguities in responsibilities
d. Requires a manager who has worked at least five years in a previous matrix organization

28. Network multinational structures:
a. Are the most popular form of multinational organization
b. Are tightly coupled bureaucracies, linked by formal explicit policies
c. Are culturally homogeneous and hierarchically controlled
d. Are loosely coupled political systems

29. The host-country effect:
a. Implies that multinationals are shaped by institutions existing in their country origins
b. Refers to the extent to which HRM practice in subsidiaries are impacted by the host country context
c. Refers to the transfer of practices from foreign locations to the headquarters
d. Relies heavily on knowledge from the parent or peer subsidiaries

30. The subsidiary as an integrated player:
a. Develops HRM policies and practice which are transferred to overseas affiliates
b. Creates knowledge but at the same time is recipient of knowledge flows
c. Engages in the creation of country/region specific knowledge in all key functional areas
d. Moves managers in a way to break down barriers and produces corporate champions of information


1. What are the advantages and disadvantages of the global matrix structure?

2. What are the characteristics of a centralized decentralized and transition HR company?

3. Discuss a formal, structural form of control utilized by traditional multinational firms.

4. What would be considered an informal control mechanism?

5. How can a social relationship be considered a control?

CHAPTER 4: IHRM in Cross-Border Mergers & Acquisitions, International Alliances and SMEs


1. A merger of two companies can be depicted by Company A and Company B form Company C.

2. In an acquisition a new company is formed with a new identity and operation.

3. During most merger and acquisition processes top management retention is very high due to benefits of operating a foreign company.

4. Identifying and assessing culture issues in an HR activity is the due diligence phase of merger and acquisition.

5. The strongest HR involvement takes place in the first two phases of the merger and acquisition phases.

6. Company relationships are not considered a resource in an HR function in a merger and acquisition strategy.

7. A tangible asset is money and people.

8. The command of the partners’ language is mainly a requirement for Eastern managers.

9. Performance related pay is more popular in Germany than the USA.

10. An exchange rate advantage is not a factor in considering a merger and acquisition strategy in a given country.

11. Parent companies in an international joint venture do not have a separate legal identity.

12. Gaining knowledge of both local business conditions and the research and development capabilities of the potential joint venture partner is a reason to enter into an international joint venture.

13. SMEs constitute the backbone of the Asia Pacific region.

14. Values shape employee’s priorities and decision making.

15. In the USA more than 80 per cent of total employment is with organizations with less than 20 employees.

16. Less qualified employees are employed by small to medium enterprises because they do not meet recruitment requirements of large organizations.

17. Financial participation programs are offered to small to medium enterprises to increase the manager identification with the firm.

18. In small to medium enterprises cross cultural training for expatriates is usually conducted as in-house training seminars.

19. HR activities can become a significant drain on managerial time and resources in an international small to medium enterprise.

20. Small to medium firms have as much experience operating in a variety of different countries as large organizations.


1. Cross-border alliances are:
a. Cooperative agreements between two or more firms from a different national background
b. Investment in which profits and other responsibilities are assigned
c. Agreement between 2 companies to join their operations
d. Multinational attempting to integrate its operations across more than one dimension

2. A characteristic of a non-equity cross border alliance is:
a. One which establishes subsidiaries thru Greenfield investments or acquisitions
b. The purchase of shares of an enterprise in a country other than its own
c. No other party has to provide financial contribution
d. Each party cooperates as a separate legal entity and bears its own liabilities

3. Equity modes of foreign operations car be best described as:
a. Selling stock to a foreign country
b. Involving a foreign direct investor purchase of shares of an enterprise in a country other than its own
c. Each part contributes non-financial resources to the operation
d. Shares are listed on both countries stock exchange

4. A major reason to engage in a merger or acquisition is to:
a. Facilitate the rapid entry into a new market
b. Acquire capital
c. Build prestige
d. Learn new technology

5. Typical HR problems arising in cross border M&A involve all of the following EXCEPT:
a. Lose up to 20% of its executives
b. Personnel issues are neglected
c. Failure due to not producing intended results
d. Insufficient capital

6. The due diligence phase of a M&A is:
a. Putting all the planning into action
b. An in depth analysis of the benefits on the mergers
c. The plan to carry out the merger
d. Designing key talent retention programs

7. Integration planning phase of M&A are all of the following except:
a. Planning and leading integration efforts
b. Helping the organization cope with change
c. Defining and organizational blueprint and staffing plan
d. Advising management on dealing with people issues

8. Advising management on dealing with people issues normally occur in which M&A phase?
a. Pre M&A c. Integrations planning phase
b. Due diligence phase d. Implementation and assessment phase

9. One of the largest merges in history was between:
a. IBM and Wang c. Ford and Jaguar
b. Chrysler and Daimler Benz d. Lincoln and Ford

10. What is defined as a factor which shapes employees priorities and decisions made?
a. Management c. Location
b. Values d. Financial

11. Which of the following would not be considers a resource?
a. Money c. Brand
b. People d. Regulations

12. Which expatriate role or characteristic is found to be most important for a successful integration in a M&A activity?
a. Prior work experience with a country c. A manager’s industry experience
b. Language skills d. Creative analytical skill

13. Performance-related pay is more popular in which country?
a. Germany c. France
b. USA d. Japan

14. Which country tends to have the longest recruitment period?
a. USA c. Japan
b. Germany d. UK

15. A perceived “ unaffordable luxury” in SMEs is:
a. Training c. Environmental upgrades
b. Research d. Change facilitator

16. An International joint venture is defined as:
a. One international company buys another company and combines the operations into a different company
b. One international company purchases another company and integrates operations into its company
c. Separate international companies in which the headquarters or controlling parent is outside of the country of operations
d. Two companies purchasing a third company in order to operate in another country

17. Shortage of working capital to finance exports is a top barrier to access international markets in:
a. EEA c. SMEs
b. IJV d. HR

18. M&A conceptual tool which converts resources into valuable goods and services is:
a. Values c. resources
b. Processes d. experience

19. The HR managers role as an innovator in a IJV means:
a. Create a win-win situation by sharing rather than competing between entities
b. Taking all stake holders needs into account
c. Conceptualize and implement new strategies
d. Identify talent for executing IJV strategies and adapt to changes

20. IJV positions called “functional gatekeepers” :
a. Provide a governmental regulation function
b. Control the public relations aspects of an IJV
c. Allow functional resources to be inventoried freely
d. Protect their firms assets in specific functional areas

21. Which companies have a difficult challenge to enter foreign markets?
a. Conglomerate c. Partnerships
b. Small to medium companies d. Chinese based firms

22. Internationalization process theory suggest which person has the most impact on internationalization process of a small to medium enterprise (SME):
a. Owner/Founder c. Investors
b. Exporters d. HR manager

23. All of the following are characteristic of a SME human resource development EXCEPT:
a. Training and development are short term oriented
b. Tacit knowledge related to the specific context of the firm
c. Informal learning approach
d. No motivation to report and share information

24. An option for SMEs to improve Human Resource related issues rapidly is to:
a. Outsource the HR department
b. Rely less on the resources
c. Send managers to external training institutions
d. Fire the weaker employees

25. A major difference between merger , acquisition and international joint venture is:
a. Licensing a product c. Ownership identification
b. Government regulations d. The nations involved

26. Learning in small to medium (SME) international firms is characterized by:
a. Reliance on local and national agencies
b. The use of family contacts exclusively
c. The use of formal and informal business networks
d. An overreliance on formal networks

27. In their “partnership role” supporting an International Joint Venture, HR managers must:
a. Conceptualize and implement new strategies involving communication and cooperation with new partners
b. Identify talent sources for executing International Joint Venture strategy
c. Take all stakeholders’ needs into account and show a thorough understanding of the business and the markets
d. Take the properties of the parent company almost exclusively

28. The European Commission’s definition of SME is which of the following?
a. Small company with less than 50 employees
b. Medium company with less than 500 employees
c. Small balance sheet with less than 25 million in assets
d. Medium balance sheet with less than 75 million in assets

29. Many international joint ventures (IJV ) fail in the long-term due to:
a. Changing market conditions
b. Inadequate attention to market synergies
c. Lack of interest in the human resource management and cross-cultural management aspects of IJV
d. The failure to restructure the IJV appropriately

30. The best way to address intercultural conflicts is to:
a. Ignore the conflicts as they will diminish with time
b. Have local country experts to interpret these conflicts
c. Take explicit measures to build and maintain the identity of the IJV organization
d. Let the two sides battle it out and the stronger of the two will prevail


1. What are the two equity based forms of cross-border alliances? Describe each function.

2. What is the difference between merger and acquisition?

3. What are the four phases of M&A and what happens at each phase?

4. There are three conceptual tools between business strategy and HR strategy. What are these tools?

5. Why would a company enter into an international joint venture?

CHAPTER 5: Sourcing Human Resources for Global Markets – Staffing, Recruitment and Selection


1. “Assignments as control” is a characteristic of an ethnocentric staffing approach.

2. Upon comparing the compensation packages of PCN and HCN employees, given an ethnocentric approach of staffing, there are little to no differences found in the pay for the two groups.

3. A disadvantage of a geocentric policy is it can be expensive to implement because of increased training and relocation.

4. Regional managers may not be promoted to HQ positions in a regiocentric approach to staffing.

5. Study of Chinese MNEs has confirmed that Western models of staffing policies are not applicable to Chinese MNEs.

6. A short term international assignment is defined as anything up to 1 year.

7. Frequent trips to the host country are necessary in a virtual non-standard assignment.

8. The duration of an expatriate assignment will not necessarily have an impact on the person’s ability to develop networks.

9. A key driver in recruiting an inpatriate is the desire to create a global core competency thus increasing the organizations capability to “think global and act local”.

10. Non-expatriates experience fewer stressors than expatriates as they are not responsible for duties at the home office while on international assignments.

11. Traditional assignments for expatriates usually range from 3 months to 1 year in a location.

12. Virtual assignments rely on communication technologies and such assignees will never visit the host country.

13. The U-curve is based on psychological reactions to a cultural adjustment of an international assignment.

14. The term expatriate failure has been defined as the premature return of an expatriate before the period of assignment is completed.

15. Many developed countries are changing their legislation to facilitate employment related immigration which will make international transfer easier.

16. Lack of fluency in the corporate language is rarely a factor in the selection process in a MNE.

17. The “coffee machine” system is a common form of selection process in the UK.

18. Job hunting assistance is provided to spouses to find a job in host countries as a means of making an international assignment more family-friendly.

19. “Trailers” are the spouses of expatriates.

20. Most expatriates are recruited externally.

21. Indirect cost of the failure of an expatriate involving contact with key clients and host government officials may result in the long term loss of market shares.

22. The recruitment process is defined as the process of searching for a sufficient number of candidates to fill a position.


1. Ethnocentric organizations are best characterized by:
a. Key personnel positions are held by headquarter personnel.
b. Subsidiaries are managed by local nationals (HCN)
c. A worldwide integrated business which nationality is ignored in favor of ability
d. Staff may move outside their countries but only within a particular geographic region.

2. All of the following is an approach to managing and staffing subsidiaries EXCEPT:
a. Ethnocentric c. Geocentric
b. Polycentric d. Multicentric

3. A sound business reason for pursing an ethnocentric staffing policy is:
a. Employment of HCNs is normally less expensive
b. Perceived lack of qualified host nationals (HCN)
c. It supports cooperation and resource sharing across units
d. Reflects the goals of the owners

4. Polycentric approaches to international staffing:
a. Uses the “assignment as control” approach to reduce perceived high risk
b. Uses HCNs to manage subsidiaries and they are often promoted to headquarters
c. Can be expensive to implement
d. Has very few divisions in the HR staffing department

5. A disadvantage of a polycentric policy is:
a. Employment of HCNs is less expensive
b. Host-country managers have limited opportunities to gain experience outside of their own country
c. It can produce federalism at a regional rather than country basis
d. Has very few from divisions in the HR staffing department

6. A MNE taking a global approach to its operations and recognizing that each HQ and subsidiary makes a unique contribution with unique competence is described as:
a. Regiocentric c. Geocentric
b. Polycentric d. Multicentic

7. Hiring host country nationals for a multinational enterprise have the following advantages EXCEPT:
a. Language and other barriers are eliminated
b. Government policy may dictate hiring of HCN
c. Hiring cost are reduced
d. Organizational control and coordination is maintained and facilitated

8. The most common reason for an international assignment is:
a. Need for control c. To fill a skills gap
b. Less expensive HR cost d. Host government pressures

9. Key organizational reasons for international staffing assignment include all of the following EXCEPT:
a. Culture exchange c. Management development
b. Position filling d. Organization development

10. “Extended international assignments” are defined as assignments:
a. Up to 3 months c. 1 to 5 years
b. Up to 1 year d. Over 5 years

11. Employees on oil rigs would usually be classified as which non-standard assignment?
a. Contractual assignment c. Rotational assignment
b. Commuter assignment d. Virtual assignment

12. An example of an employee working on a contractual assignment of a non-standard is a/an:
a. Part time loan of an employee for one week to one month
b. Three years assignment to start up a Greenfield site
c. Oil rig worker
d. R&D project team

13. Traditional expatriate assignments are referred to as a/an:
a. Long term assignment c. Short term assignment
b. Extended assignment d. Contractual assignment

14. “Bumble Bee” is a description of an expatriate role as:
a. Agent of direct control c. Transferor of corporate values
b. Network builders d. Boundary spanners

15. Boundary spanning refers to activities that:
a. Expand ownership in a different country
b. Gather information that bridge internal and external organizational contexts
c. Exporting information and technology across country boundaries
d. Expatriates are seldom called on to perform for the organization

16. All of the following describe a non-expatriate EXCEPT:
a. Person who relocates to another county c. Globetrotter
b. Road warrior d. Flexpatriate

17. Third country nationals:
a. Provide no assurance the subsidiary will comply with company objectives
b. Provide continuity of management as TCHs stay longer in positions
c. May be better informed than Parent Country Nationals about the host county environment
d. May impose an inappropriate HQ style

18. Whether a firm chooses ethnocentric, polycentric, regiocentric or geocentric staffing approach depends on:
a. Context specificities, local unit specificities, technological specificities and HR policies
b. Context specificities, competitive specificities, company specificities and IHRM practices
c. Context specificities, company specificities, local unit specificities, IHRM practices
d. Cultural specificities, regulatory specificities, local unit specificities, and IHRM practices

19. Three key organizational reasons for using the various forms of international assignments are:
a. Position filling, crisis management and organizational development
b. Responding to requests from local employees, management development and organizational development
c. Position filling, management development and responding to requests by parent company employees for international assignments
d. Position filling, management development and organizational development

20. Recruitment is defined as:
a. The process of gathering information for the purpose of evaluating who should be employed
b. Searching for and obtaining job candidates
c. Promoting employees within the organization to fill international management positions
d. Transferring functional managers to headquarters

21. How is “expatriate failure” usually defined?
a. Returning home before the period of assignment is completed
b. Lower than expected market shares
c. A dissatisfaction by the assignee during or after the assignment
d. Communication channels not utilized and implemented as expected

22. An indirect cost of the failure of an expatriate would be:
a. Relocation expenses c. Loss of market share
b. Exchange rate d. Their replacement cost

23. The culture adjustment process in an international assignment can be characterized by:
a. An “S” shaped curve c. Cultural shock
b. A “U” shaped curve d. Matrix relationships

24. The selection process of an expatriate places a heavy reliance on:
a. Relevant technical skills c. Marital status
b. Past performances d. Desire to relocate

25. The European Union Social Charter allows for
a. Spousal work permits
b. Expatriate to apply for citizenship
c. Free movement of citizens of member countries within the EU for work
d. Long term assignments

26. A group of multinationals have established an organization called “Permits Foundation” which:
a. Promotes the improvement of work permit regulations for spouses of expatriates
b. Allows multinationals to work foreigners without a VISA
c. Advocates all managers to receive a permit to work in any country
d. Acts as a clearinghouse for work permit complaints

27. Which language is the common corporate language in the world?
a. French c. English
b. Spanish d. Mandarin Chinese

28. According to the text, common corporate language in MNEs is developed to :
a. Expand the use of English
b. Use language as a way of standardizing reporting systems
c. Match the language of the home country
d. Provide an interpreter if managers are not fluent in the common language

29. An emerging constraint on the available pool of candidates which is hindering the recruitment and selection process of potential employees for international assignment is:
a. The frequency of dual career couples
b. Personality and psychological tests
c. Equal employment opportunity law
d. The decline of management programs in Universities

30. A family friendly policy to encourage placement of an expatriate which is logical but not always acceptable to multinationals is:
a. Inner-company network c. Intra-company employment
b. Job hunting assistance d. Post assignment career support

31. “Independents” are defined in the text as:
a. Professional women who are self-selected expatriates
b. Trailers
c. Minority foreign female
d. Neither a Democrat or Republican expatriate

32. Female expatriates tend to be employed by companies:
a. That are small c. In the marketing field
b. With over 1000 employees d. Going into the USA

33. A major barrier to the selection of female expatriates was found to be:
a. The attitudes of HR directors
b. The lack of qualified females
c. The attitudes of host country coworkers
d. A lack of support by the female expatriates’ family


1. What are the four terms to describe MNE approaches to managing and staffing subsidiaries?

2. What are some advantages and disadvantages of the ethnocentric approach to staffing the MNE?

3. There are three key organizational reasons for international assignments. What are these three reasons?

4. Discuss the six roles of an expatriate.

5. Why are expatriates considered boundary spanners?

6. What are the five stressors impacting non-expatriates?

7. What are several factors in an expatriate selection process which are absent in the selection of a regular, domestic management position?

8. Discuss the U-Curve phases in the process of adjustment to a foreign culture.

9. What are the most common reasons for rejecting an international assignment? Do different countries have different reasons for assignment rejection?

10. What are some alternative assignment arrangements applied to address the dual career couple restraints on the selection process?

11. Discuss the externally and internally established barriers to females taking international assignments.

CHAPTER 6: International Performance Management


1. A multinational is a single entity that faces a global environment.

2. Developments in sophisticated worldwide communications system provide an acceptable substitute for “face to face” contacts between subsidiary managers and corporate staff.

3. The way we measure workers’ productivity is exactly the same in an international setting, but the numbers come out differently because of that environmental difference.

4. If perceived financial benefits and career progression are not met during an assignment, the level of motivation and commitment will decrease thus affecting performance.

5. American work methods may be more structured than their foreign counterparts and that individuals have less discretion in how they approach tasks and problems.

6. Role expectations are likely to be less complex for the TCN than the PCN.

7. Often the country assigned to a TCN is perceived by headquarters to be culturally close.

8. Expatriate performance should be placed within its international as well as organizational context.

9. Performance management is a part of a multinational’s control system.

10. The expatriate’s commitment to the parent and to the local operations was both positively related to the intent to stay.

11. One key function of performance appraisal feedback is that it provides opportunities to improve performance by identifying gaps that might be eliminated by training and development.

12. The international business traveler can be described as an expatriate.

13. The two categories of international staff are expatriate and commuter.

14. The nature of the international monetary system and local accounting differences may preclude an accurate measurement of goal attainment results.

15. A team of evaluators should be used for performance appraisal of an expatriate.

16. The standardized performance forms in an organization are always reworked to reflect differences in the expatriates’ situation in a foreign country.

17. Regular feedback is an important aspect in terms of meeting targets and revising goals as well as assisting in motivation of work effort.

18. Virtual assignments rarely if ever have performance appraisals.

19. Formal performance appraisal is commonly on a biannual basis.

20. A Japanese manager cannot directly point out a work-related problem or error committed by a subordinate.


1. Performance management:
a. Is a process that enables the MNE to evaluate and continuously improve individual, subsidiary unit and corporate performance against set goals and targets
b. Is the evaluation of an employee performance and a vehicle to set performance goals
c. Is the process of evaluating business opportunities and planning for new investments
d. Is the process of setting goals for future performance by MHE employees

2. The turbulence of the global environment requires that long-term goals be
a. Inflexible to major environment events
b. Realistic and in line with corporate goals
c. Ambitious to meet the growing needs of the organization
d. Flexible to respond to market contingencies

3. Market development in foreign subsidiaries is generally slower and more difficult to achieve without:
a. Supporting infrastructure of the parent c. Expatriates from the parent organization
b. Formal control mechanism d. Cross-culture training

4. The impact of the following variables and their interrelationship needs to be considered in determining the expatriate performance EXCEPT:
a. Compensation package
b. The nature of the task
c. Environment in which the performance occurs
d. Interpersonal relationship with key official

5. The employee who oversees and directs the entire foreign operations is:
a. Expatriate c. HR manager
b. Structure reproducer d. Chief executive officer

6. An operative:
a. Is a subsidiary manager
b. Reproduces a foreign subsidiary structure
c. Is an individual sent to a subsidiary to solve a particular problem
d. Is an individual whose assignment is to perform functional job task

7. What is a strategic international assignment?
a. A short-term knowledge transferor activity
b. High profile activities that focus on developing a balanced global perspective for the employee
c. Assignment that involves the two-way transfer of existing processes and practices
d. Assignment that focuses on in-country performances and the acquisition of local understanding

8. If the PCN is perceived to identify too closely with the host subsidiary concerns:
a. The employee is perceived to be “going native”
b. The employee is sent on vacation
c. The employee is removed from the subsidiary
d. The employee is considered to be doing his or her job

9. Individuals are likely to blame lack of job discretion on the following:
a. The culture, role, and organization
b. The organization, the job and the location
c. The job, location and culture differences
d. Culture, the job and the Chief Executive Officer

10. What can be described as the strongest stressors in expatriate “overseas” work environment?
a. Uncertainty regarding culture differences and language
b. Uncertainty regarding objectives, goals and role requirements
c. Uncertainty regarding job retention
d. Uncertainty of who to report to and who is in the line of command

11. A USA manager of German nationality working for a Dutch multinational company is assigned to a position in Indonesia. Which country is considered the host country?
a. USA c. Germany
b. Dutch d. Indonesia

12. The transfer of the individual and accompanying family member into a foreign environment outside of their normal cultural comfort zones is the definition of:
a. Domestic relocation c. Expatriate assignment
b. International traveler d. Commuter

13. What are the five major constraints in terms of multinational strategy and goal setting?
a. Differing societal, legal, economic, technical and physical demands
b. Differing societal, cultural, economic , technical and physical demands
c. Differing societal, legal, administrative, economic and physical demands
d. Differing legal, strategic, administrative, economic and physical demands

14. What are the five variables affecting expatriate performance?
a. Compensation package, task, HQ support, host environment and culture adjustment
b. Legal, economic, culture adjustment, physical and task
c. Technical, societal, compensations, HQ support and host environment
d. Compensation, task, cultural environment, HQ support and legal

15. All of the following are a constraint of goal attainment for the multinational enterprise EXCEPT:
a. Volatility of global environment c. Separation of time and distant
b. Cross-cultural demands d. Non-comparable data

16. Which country tends to have administrators with a high level of legal expertise?
a. Sweden c. France
b. Germany d. UK

17. Which country has a strong tradition of collective bargaining?
a. Danish c. Japan
b. USA d. Germany

18. Which country tends to focus on linking performance management result to long-term training and development activities?
a. USA c. Germany
b. France d. Australia

19. Two countries in which it is common for employees to have input into job goal setting is:
a. USA and Mexico c. Canada and Australia
b. Germany and Sweden d. Japan and Sweden

20. An appraisal system which builds upon the strengths while minimizing their disadvantages uses all of the following criteria:
a. Hard , soft and contextual goals
b. Financial, corporate and cross-cultural goals
c. Interpersonal , financial and cultural goals
d. Hard goals, cultural and corporate goals

21. What tool assists an organization in collecting accurate performance data and allows for cross-employee comparisons?
a. Local implicit norms c. Local performance diaries
b. Standardized appraisal forms d. Standardized performance goals

22. What is the normal frequency of formal performance appraisal for an expatriate?
a. 6 months c. 18 months
b. 1 year d. 2 years

23. In which country do managers find it difficult to directly point out a work-related problem or error by a subordinate?
a. USA c. Japan
b. China d. Indonesia

24. The dilemma of cultural adaptation of a performance evaluation could be overcome by:
a. The host-country national assisting in devising a suitable system for appraisal
b. Parent company not evaluating the employees
c. TCN developing the performance appraisal system
d. Offshoring the performance evaluation

25. The term “whole verses part” refers to:
a. The idea that a global performance is too complex to be captured by a single performance management system
b. The idea that less than excellent performance outcomes in a given local unit may be acceptable if that unit’s presence in a location contributes to the greater strategic good
c. The idea that you can best capture performance management by adding up the sum of all the individual performance outcomes in the various units or parts of the MNE.
d. The idea that corporate headquarters’ executive can accurately assess the parts (local units) of performance far more accurately than the whole or overall firm performance

26. Web-based platforms of human resource information system that include performance management modules:
a. Create more performance management problems than they solve
b. May be seen as eliminating the separations of time, distance and culture experienced by multinational firms
c. May be seen as a response to the separations of time, distance and culture experienced by multinational firms
d. May be seen as increasing and making more obvious the separations of time, distance and culture experienced by multinational firms

27. Performance management systems contribute:
a. Only to formal control, through feedback and appraisal aspects
b. Only to informal control through contributing to shaping corporate culture
c. To both formal control, through feedback and appraisal aspects as well as informal control, through contributing to shaping corporate culture
d. To standardized control and the communication of the local units’ contribution to global standards

28. According to Hays, the “trouble shooter” is:
a. The individual sent from a subsidiary back to headquarters because they are a performance problem
b. The individual in a local subsidiary who holds his or her employees to an impossibly high standard in performance appraisal reports
c. The individual sent to a local subsidiary to identify redundant employees and fires them
d. The individual sent to a local subsidiary to analyze and solve particular operational problems

29. A major challenge to global performance management is:
a. How to determine performance criteria and goals related to non-standard assignments especially virtual assignees
b. How to provide performance management forms to all employees
c. How to translate parent country forms into local languages
d. How to determine who is actually filling out the forms in local subsidiaries

30. One problem with an annual performance appraisal is:
a. Managers often miscommunicate how to improve the expatriate’s job performance in a timely manner.
b. Technological improvements have made the evaluation obsolete.
c. Employees do not receive consistent frequent feedback in order to improve
d. Email feedback has replaced the need for a formal employee evaluation


1. What are some constraints in evaluating a subsidiary’s performance against expectations?

2. MNEs control performance by what means?

3. Who conducts performance appraisals for expatiates and other international employees?

4. What are the three general types of goals used as the basis for performance criteria?

5. How do performance management systems in Germany and France differ?

CHAPTER 7: International Training, Development and Careers


1. An international assignment, in itself, is an important training and development tool.

2. Presently, MNEs place little priority on providing pre-departure training for spouses and family.

3. More multinationals are now expanding their pre-departure training programs to include programs for the spouse and family.

4. Professor Tung revised her recommendations for cross culture training, so that now she feels that there should be more emphasis in foreign language training.

5. An immersion approach to cross culture training would include role playing and stress reduction training.

6. A preliminary visit to a country is considered a necessary part of the selection process of any type of expatriate assignment and by all countries.

7. Language problems are largely viewed as mechanical and manageable problems that can be readily solved.

8. Chinese nationals are unwilling to accept English as a business language.

9. Culture awareness training is the most common form of pre-departure training.

10. Most expatriates are hired internally.

11. Relocation specialist provides practical assistance to expatriates.

12. Expatriates are often used for training because of a lack of suitably trained staff in the host locations.

13. HCNs may not be regarded as “genuine” expatriates as they are not trained in the same manner.

14. Non-expatriates are given the same cross culture training as expatriates.

15. A byproduct of working in an international team is becoming culturally aware.

16. There is an increasing interest in all aspects of training and development with a focus on practices in the economic super power China.

17. A repatriate may experience re-entry shock to the home country and may require training.

18. It is a wise policy for MNEs to encourage expatriate to travel to exotic locations during holidays.

19. Work-related information exchanges are part of any expatriate assignment.

20. Employees accepting international assignments can have cultural shock entering a host country and a cultural shock returning to home organizations.

21. Firms with career development planning have a higher rate of repatriate turnover.

22. The repatriate’s new position usually devalues the overseas experiences.

23. The returning repatriate will usually get a promotion upon reentry.

24. Repatriates working in a foreign location may have role conception and role behavior conflicts which are influenced by the cultural differences when they return home.

25. Children do not have a difficult re-entry problem when returning home.

26. A boundaryless careered person is committed to the multinational company and not one’s own career.

27. Multinationals are reinforcing the notion of a protean and boundaryless careers when they do not guarantee repatriates positions upon re-entry.

28. Cost reduction or containment is an important driver in international assignment trends.


1. A multinational builds it stock of human resources or human capital by:
a. Training and development activities c. Hiring from competitors
b. Buying stock in another company d. Keeping up with trends of hiring

2. An indication of how important training and development has become in multinationals is reflected in that they have:
a. Established their own universities
b. Stolen employees from competitors
c. Required college degrees for all employees
d. Increased their training budgets even during periods of economic decline

3. A useful way for employees to gain a broader perspective of an MNE is:
a. Matrix structures c. Short-term assignments
b. Job rotations d. Commuter

4. Components of pre-departure training programs include all of the following Except:
a. Cultural awareness training c. Language instruction
b. Practical assistance d. Technical refresher training

5. What is the most common form of pre-departure training?
a. Language c. Practical assistance
b. Culture awareness d. Exchange rate

6. If an expected level of interaction with local host country employees is low and similarity between the parent and the host country is high, the length of cross culture training would be:
a. Less than 1 week c. 4 weeks
b. 2 weeks d. 3 months

7. Preliminary visits to the host country:
a. Encourages more informed pre-department preparations
b. Is a perk in the recruitment process
c. Is discouraged in European countries
d. Is too expensive to be considered

8. Which language is considered the language of World Business?
a. Mandarin Chinese c. English
b. Spanish d. French

9. Disregarding the importance of foreign language skills may reflect ___________assumptions.
a. Multicentric c. Regiocentric
b. Polycentric d. Ethnocentric

10. One technique useful in orienting any international employee is a/an:
a. Interview with a host national
b. Preliminary visit to the host country
c. Review of the country or region in the news
d. Selection of readings about the history of the host country

11. A major objective of intercultural training is:
a. To make the assignee an expert in the host country
b. To help people cope with unexpected events in a new culture
c. To create a concern on the part of the assignee so they take the assignment seriously
d. Get the assignee through the first week or so of the assignment

12. Language skills are important in terms of:
a. Employee personal development
b. Travel and dining abilities
c. Recruitment and selection process
d. Task performance and cultural adjustment

13. The components of a pre-departure training referred to as “practical assistance” :
a. Provides information that assist in relocation
b. Provides money for transportation
c. Consist solely of language training
d. Is seldom provided to expatriates

14. The employee who trains the HCN is usually:
a. A line manager c. An expatriate
b. At headquarters d. An inpatriate

15. This type of employee may comprise the largest contingent of employees in international businesses
a. Expatriate c. Inpatriate
b. Non expatriate d. TCN

16. Expatriates appearing to have greater job satisfaction during and after their international assignment had:
a. Preliminary visits c. Integrated cross-cultural training
b. Language classes d. Higher compensation

17. International expertise is an outcome of
a. Cross-cultural training c. Practical assistance
b. MNE sponsored universities d. International assignments

18. Along with expected financial gains, the primary motive for accepting an international assignment is
a. Knowledge c. Career advancement
b. Travel d. Need

19. A sub-set form of an international team is a/an:
a. Expatriate c. Virtual team
b. TCN d. Commuter

20. There is a continuing pressure from developing countries for:
a. PCN transfers
b. Effective pre-departure training
c. Long term assignments
d. Localization of training and development initiatives

21. The “affective approach” to training partially consists of:
a. Cultural briefings and area briefings
b. Field experiments and simulations
c. Role-playing and case studies
d. Survival level language training and sensitivity training

22. Training and development is a critical component of an international assignee because:
a. Expatriates are trainers, part of the transfer of knowledge across units
b. Expatriates are not expected to ensure that systems and processes are adopted
c. Expatriates do not rely on assignments for developmental purposes
d. Expatriates are expected to return to the host country and train parent company employees

23. The benefits of international teams include:
a. Lower payroll cost and reducing turnover
b. Breaking down functional and national boundaries, enlarging communication flows
c. Standardizing inputs into decisions, problem solving strategies and providing uniform strategic assessments
d. Building formal control by way of policies and procedures

24. Repatriation:
a. Is the activity of bringing the expatriate back to the home country
b. Is one who works and temporally resides in a foreign country
c. Is a business traveler who performs tasks in a foreign country and then returns
d. Is a second expatriate assignment to the same location

25. The final stage in the expatriation process is:
a. Inpatriate c. Transpatriation
b. Repatriation d. Counterpatriation

26. The repatriation process is accomplished by three phases, all which are included below EXCEPT:
a. Pre-departure c. During the assignment
b. Recruitment and selection d. Upon return

27. Home leave and exotic vacations are included in the following phase of repatriation:
a. Pre departure phase c. During the assignment phase
b. Recruitment and selection phase d. Upon return phase

28. Sponsor or Mentors:
a. Facilitate the smooth transition into a foreign assignment
b. Are responsible for keeping the expatriate in touch with the changing conditions at home
c. Provide in-depth information on host country conditions
d. Often travel with the expatriate

29. Guarantee of a position at home upon completion of an overseas assignment were only given in one country as reported in a survey by Tung-Arthur Anderson in 1997. That country is:
a. USA c. Germany
b. Japan d. UK

30. A repatriate can encounter the following career anxiety job related factors EXCEPT:
a. Loss of visibility an isolation c. Culture shock
b. No post-assignment guarantee d. Workplace changes

31. If the multinational is in the process of a major restructuring, the aftermath of a merger or acquisition or sale of a division can result in:
a. Job shedding c. New factory building
b. Bankruptcy d. Matrix

32. Organizations seem to have a lower rate of repatriate turnover when:
a. A firm is downsizing
b. Bonuses are given upon reentry
c. An employee is married
d. Firm provides career development planning

33. What kind of position can the repatriate most likely expect upon re-entry:
a. Promotion c. Same position
b. No position d. Lateral position

34. Boundaryless careerists are:
a. Highly qualified mobile professionals c. Self-employed contract workers
b. Careers that consist of a job for life d. Jobs generated by a multinational

35. What is a main reason for multinationals to hire an “international itinerants?”
a. Higher control of activities c. Higher firm knowledge
b. Elimination of repatriation activities d. Foreign country knowledge of customs

36. Visible and concrete expression of the repatriate value to the firm can be accomplished by all of the following EXCEPT:
a. Promotion c. Completion bonus
b. Public ceremonies d. Private congratulations

TOP: Designing a Repatriation Program

37. It was calculated by Black and Gregersen that a US multinational will spend ________on each expatriate over the duration of the assignment:
a. No more than a regular employee c. Two million dollars
b. $ 500,000 d. One million dollars


1. What are the four components of pre-departure training programs that contribute to a smooth transition to a foreign location? Discuss each in turn.

2. What are the benefits of using international teams?

3. Even though language usually falls in importance behind cross culture training, what are some of the advantages of the expatriate being fluent in the host and parent language?

4. Discuss the components of the Mendenhall, Dunbar and Oddou cross cultural training model. What are the components of the model and how does the training approach relates to each component?

5. What is the purpose of preliminary visit to a host county and what are some of the outcomes of such a visit?

6. When a repatriate returns to the home office what kind of challenges do they face? What kind of position awaits the returning employee?

7. What are the three steps of the repatriate process?

8. What are the three main reasons for the multination to have a well-designed repatriation process?

9. What skills and knowledge are acquired through a typical international assignment?

10. What should be covered in a formal repatriation program?

CHAPTER 8: International Compensation


1. Increased complexities in global pay include the decreased use of outsourced activities and subsequent labor pricing needs.

2. The competing objectives of the international firm and the expatriate employee are fundamentally different from that which exists in a domestic environment.

3. The term “base salary” acquires a somewhat different meaning when employees go abroad.

4. Base salary must be paid in local country currency.

5. Foreign service inducements are usually made in the form of a percentage of salary and usually amount to 30 to 60 percent of base pay.

6. The provision of a relocation allowance implies that employees should be entitled to maintain their home country living standards.

7. Many employers cover the expense of one or more trips back to the home country each year.

8. The provision of a cost-of-living allowance implies that the cost-of-living in the foreign assignment is higher than at home.

9. PCNs and TCNs do not usually receive the same treatment concerning educational expenses.

10. Pension plans are very easy to deal with from country-to-country, as national practices are similar

11. The Going Rate Approach is based on local market rates.

12. With the Going Rate Approach, if the location is in a low-pay country, the multinational usually supplements base pay with additional benefits and payments.

13. The Balance Sheet Approach links the base salary for PCNs and TCN to the salary structure of the relevant home country.

14. Generally the developed countries tend to rank as more expensive than developing countries because their wage costs are higher.

15. It is a common practice for MNEs to use a home-country balance sheet approach for TCNs except in the USA.

16. “Universal” pay systems may be preferred by corporate pay planners rather than having to deal with myriad “Local” systems.

17. Firms will never provide standardized “core” pay in the global firm.

18. Paying TCNs according to their home-country base salary can be less expensive than paying all expatriates on a PCN scale.

19. MNEs using the Balance Sheet approach to international compensation are constantly updating compensation packages for cost of living changes.

20. Obtaining up to date information on international living costs is a constant issue for multinationals.


1. Successfully managing compensation and benefits in a multinational context:
a. Requires knowledge of employment and taxation law, customs, environment, and employment practices of many foreign countries
b. Requires the use of both the going rate approach and the balance sheet approach to international compensation
c. Does not require familiarity with currency fluctuations
d. Does not require the use of any kind of base salary

2. In a domestic context, base salary:
a. Is the primary component of a package of allowances
b. Includes cost-of-living allowance
c. Denotes the amount of cash compensation serving as a benchmark for other compensation elements
d. Is determined by using the Going Rate Approach

3. Which of the following is the foundation block for international compensation whether the employee is a PCN or TCN?
a. Tax protection
b. Foreign service inducement/hardship premium
c. Allowances
d. Base salary

4. Which of the following involves a payment to compensate for differences in expenditures between the home country and the foreign country?
a. Home leave allowance c. Cost-of-living allowance
b. Housing allowance d. Relocation allowance

5. The provision of a housing allowance:
a. Is not often assessed on a case-by-case basis
b. Does not ever include a fixed housing allowance
c. Implies higher living standards
d. May include company-provided housing

6. The purpose of home leave allowances is to:
a. Compensate for differences in expenditures between the home country and the foreign country
b. Give expatriates the opportunity to renew family and business ties, thereby helping them to avoid adjustment problems when they are repatriated
c. Cover moving, shipping and storage charges, and temporary living expenses
d. Give employees a chance to leave their homes to tour their potential foreign assignment

7. Relocation allowances:
a. Do not usually cover temporary living expenses
b. Usually cover temporary living expenses
c. Cover discretionary items
d. Do not usually cover moving

8. MNEs generally pay allowances in order to:
a. Change the living standards of employees
b. Encourage employees to take international assignments
c. Avoid certain taxes
d. Discourage employees from taking international assignments

9. Most US PCNs typically:
a. Remain under their home country benefit plan
b. Adopt US benefit plans
c. Take advantage of both their home countries’ and the US’s benefit plans
d. Do not receive benefits, only allowances

10. Firms need to address many issues when considering benefits, including:
a. Whether or not to maintain expatriates in home-country programs
b. Whether or not to use the Going Rate Approach
c. Whether or not to use the Balance Sheet Approach
d. Whether or not expatriates should receive any social security benefits

11. Benefits that may be provided to employees include:
a. Base pay c. Vacations and special leave
b. Tax protection d. Cost-of-living allowances

12. The base salary for an international transfer is linked to the salary structure in the host country using:
a. Tax protection c. The Going Rate Approach
b. Tax equalization d. The Balance Sheet Approach

13. The Balance Sheet Approach:
a. Is the most widely used approach to international compensation
b. Relies on survey comparisons
c. Creates potential re-entry problems
d. Creates variation between expatriates of the same nationality in different countries

14. An advantage of the Going Rate Approach is that:
a. There is variation between assignments for the same employee
b. There is equality in pay with local nationals
c. There is equity between assignments
d. It results in fewer taxes

15. A disadvantage of the Balance Sheet Approach is that:
a. There can be variations between assignments for the same employee
b. There can be variations between expatriates of the same nationality in different countries
c. There may be potential re-entry problems
d. It can result in great disparities between expatriates of different nationalities and between expatriates and local nationals

16. The four categories of outlay incurred by expatriates that are incorporated in the Balance Sheet Approach are:
a. Goods and services, housing, income tax and reserve
b. Housing, base pay, goods and services and taxation
c. Taxation, housing, exchange rate and goods and services
d. Reserve, housing, taxation and evaluation cost

17. The most common taxation policy used by multinationals is:
a. Tax protection c. Tax equalization
b. Parent country national taxation d. No taxation

18. “Globals” are:
a. Expatriates c. Commuters
b. Permanent international assignees d. International travelers

19. Many multinationals respond to complexity of tax issues across countries by:
a. Ignoring all tax issues except for the Parent company
b. Retaining the services of international accounting firms
c. Having an in-house tax division to prepare all tax related forms and addresses all country tax issues
d. Leaving all tax issues up to the employee

20. A firm-external theory of job worth is influenced by:
a. Behavioral theory c. Cultural and institutional perspectives
b. Level of internationalization d. Local market conditions

21. Pay strategy may be defined in terms of a series of interlocking strategic choices on:
a. Basis of pay, units of aggregations, patterns of variation in pay and job evaluations
b. Industry/competition, size of organization, organizational structure and job evaluations
c. Employment relationships, corporate culture, basis of pay and job evaluation
d. Local market conditions, laws, basis of pay and job evaluations

22. An external, environmental norm in global pay strategy would be:
a. Traditional employment relationships c. Resource-based view of the firm
b. Labor unions and educational systems d. Institutional economics

23. Performance verses seniority is a strategic choice of pay strategy considered in:
a. Job evaluation system c. Internal equity
b. Units of aggregation d. Basis of pay

24. In a recent cost of living survey, the most expensive city to live in is:
a. London c. Zurich
b. New York d. Tokyo

25. The Top Five highest taxation countries are:
a. Netherlands, Belgium, Germany, Australia and Italy
b. USA, Netherlands, France, Germany and China
c. China, Australia, Belgium, France and Malaysia
d. Taiwan, France, Netherland, Belgium and Australia

26. International compensation is characterized by:
a. Complexity, culture and corporation c. Complexity, challenges and choices
b. Complexity, cultural challenges d. Complexity, cooperation and competition

27. Global pay practices consist of firm level decisions about:
a. Pay mix, pay level and standardization versus localization
b. Pay levels, pay mix and hierarchy versus egalitarian basis
c. Pay levels, cultural norms and pay bases
d. Pay mix, pay culture and standardization versus localization

28. International compensation is:
a. On a practical level, simpler than a domestic pay system
b. Not considered critical for most multinational enterprises
c. Still essentially equivalent to the topic of expatriate pay practices in all multinational enterprises
d. More complex than domestic pay due to outsourcing and balancing centralizations and decentralization of pay forms

29. National and regional differences in the meaning practice and tradition of pay:
a. Are rapidly diminishing
b. Have practically disappeared with global cultural integration
c. Remain significant sources of variation in the international firm
d. Are actually increasing due to national and regional protectionist legislative mandates

30. A seamless network of pay providing members, made up of global firms, their specialist consultant and local and regional public and private interests are:
a. A reality
b. An impossibility
c. Not considered critical to MNEs executives
d. A goal not yet a reality

31. The “Local Plus” approach to international compensation
a. Pays expatriates solely based on prevailing local wage conditions
b. Provides nothing but benefits in transportation assistance, housing and dependent’s education
c. Combines some local pay practices with some expatriate benefits
d. Always includes tax equalization policies


1. Present the general objectives of international compensation for a firm.

2. List the objectives of international compensation for an employee.

3. Discuss the key components of an international compensation program.

4. Describe the advantages and disadvantages of the Going Rate Approach to international compensation and the Balance Sheet Approach.

5. What are the three vertical levels of global pay strategies?

6. Describe some categories of Basis-for-Pay of strategic pay systems.

CHAPTER 9: International Industrial Relations and The Global Institutional Context


1. In the international industrial relations field, no industrial relations system can be understood without an appreciation of its historical origin.

2. Industrial relations are a faithful expression of the society in which they operate, and of the power relationships between different interest groups.

3. The difference in union structures has no influence on collective bargaining process in Western countries.

4. Corporate headquarters will become involved or oversee labor agreements made by foreign subsidiaries.

5. European firms have tended to deal with industrial unions at the firm level rather than at industry level.

6. Subsidiaries formed by Greenfield tend to be given more autonomy over industrial relations than firms acquired by acquisition.

7. A large home market is a strong incentive to adapt to host-country institutions and norms.

8. The decline in union density in many countries can be explained by economic factors.

9. Multinationals subsidiaries experienced smaller and shorter strikes than local firms.

10. Multinational subsidiaries tend to have more frequency of strikes than indigenous firms.

11. Treating labor relations as incidental and relegating them to the specialists in the various countries are inappropriate.

12. Unlike the OECD, the Commission of the EU can translate guidelines into laws.

13. Labor unions interpreted the chapeau clause to mean “compliance with local law supersedes the OECD guidelines.”

14. The EU does not aim to establish minimum standards for social conditions that will safeguard the fundamental rights of workers.

15. The less one knows about how a structure came to develop in a distinctive way, the more likely one is to understand it.

16. With the expansion of the EU in 2004 to include 10 new members that are relatively low-income states, there has been an increased sensitivity to the problem of social dumping.

17. An “investment strike” is a concern of trade unions about multinationals refusing to invest additional funds in the plant.

18. The Social Accountability 8000 standards were drawn from the UN human rights conventions.

19. Poaching of skilled employees never happens in Asian-Pacific countries.

20. Western multinational enterprises that are planning offshore activities in China should not be concerned with guanxi.


1. In Sweden and Germany the term “collective bargaining” means:
a. Negotiations between a local trade union and management
b. Negotiations between an employers’ organization and a trade union at the industry level
c. Bargaining process as a class struggle between labor and capital
d. Bargaining at an open market for products

2. Conglomerate unions are:
a. Members employed in more than one industry
b. Skilled occupational grouping across industries
c. Open to all employees
d. Representatives of all grades of employees in an industry

3. A lack of familiarity by multinational managers of local industrial and political conditions has:
a. Worsened a conflict with a local firm that could have been resolved
b. Conflicted with social norms
c. Encouraged the development of a union
d. Contributed to the failure of a MNE

4. McDonald’s company policy is to staff its restaurants with:
a. 90% nationals c. Bilingual managers
b. Only nationals d. Union employees

5. A multinational firm usually delegates the management of industrial relations to:
a. Their foreign subsidiaries c. An offshoring division
b. The headquarters industrial division d. The marketing division

6. Greater emphasis on formal management controls and close reporting systems tend to be present in:
a. European firms c. Asian firms
b. USA firms d. Australian firms

7. Poor subsidiary performance tends to:
a. Be accompanied by decreased corporate level involvement in local industrial relations
b. Be accompanied by increased corporate level involvement in industrial relations
c. Encourage the formation of labor unions
d. Be independent of corporate level involvement in local industrial relations

8. Which country has the highest level of union membership?
a. USA c. Germany
b. Sweden d. Italy

9. Multinationals operating in Western Europe, Japan and Australia have a more serious problem than wage level which is:
a. Restricted to overtime provisions c. The ability to vary employment levels
b. Long term labor contracts d. Unpredictable regulatory environment

10. Recent evidence has shown that one of the priorities when making investment location decisions is:
a. Presence of unions c. Equal opportunity government regulations
b. Capital resource availability d. The ability to dismiss employees

11. International trade secretariats (ITS):
a. Are the acts of staging an investment strikes by the multinational
b. Is a loose confederations to provide worldwide links for the national unions in a particular industry or trade
c. Is a lobbyist for restrictive national legislation in the USA and Europe
d. Are clearing houses for information on key labor provisions around the world

12. The Chapeau Clause:
a. States that multinationals should adhere to the guidelines within the framework of law, regulations and labor relations and employment practices in each country they operate
b. Identifies a number of workplaces related principles that should be respected by all nations
c. Is a set of guidelines that cover disclosures of information, competition, financing, taxation and industrial relations
d. Is a key labor directive imposed by the EU

13. The major objective of the implementation of the Single European Act was to:
a. Create a single coherent basis for action by EU members
b. Establish the Single European Market
c. To create a social policy in regard to labor laws and working conditions
d. Ensure labor uniformity across Europe

14. Elements of International Trade Secretariats to achieve its long term goal of transnational bargaining are all of the flowing EXCEPT:
a. Research and information
b. Call company conferences
c. Establishing company councils
d. Superior knowledge and expertise in industrial relations

15. Generally speaking, corporate headquarters:
a. Is seldom involved in labor agreements made by foreign subsidiaries because these agreements seldom effect international plans nor create precedents for negotiations in other countries
b. Is seldom involved in labor agreements made by foreign subsidiaries because headquarters staff feel they do not understand local regulatory and institutional contexts
c. Is often involved in labor agreements made by foreign subsidiaries because headquarters staff do not trust local labor specialist to bargain effectively
d. Will become involved in labor agreements made by foreign subsidiaries because these agreements may affect international plans and/or create precedents for negotiations in other countries

16. A major problem applying the strategy of lobbying for restrictive national legislation is:
a. The reality of conflicting national economic interest particularly in times of economic downturn
b. The reality of diffuse and uncoordinated legislative processes
c. The reality of diverse interests by the many and varied union representatives as they seek to approach legislators
d. The reality of the complexity of labor legislation and the inability of most individual legislators to understand the key issues involved

17. Public uproar over working conditions of offshoring companies resulted in a universal standard called:
a. ISO 9000 c. Childcare 2000
b. NGO watch d. Social Accountability 8000

18. A major problem in the offshoring countries of India and China is:
a. Skill shortages c. Educational quality
b. Resource shortages d. Research and development

19. Influencing wage levels to the extent that cost structures become uncompetitive is:
a. A byproduct of a successful subsidiary c. A disadvantage of trade unions
b. A result of government regulations d. A multinational problem

20. Labor unions response to multinationals are all of the following EXCEPT:
a. To agree to a major contractual request by MNEs
b. To form international trade secretariats
c. To lobby for restrictive national legislation
d. To achieve regulations of MNEs by international organizations

21. Union influences can increase unit manufacturing cost in Europe by as much as:
a. 5% c. 15%
b. 20% d. 50%

22. Strike-proneness can be measured by
a. Frequency, size, and duration c. Size, industry and duration
b. Duration, industry and size d. Frequency, industry and size

23. Union decline can be linked to all of the following EXCEPT:
a. New form of work organization c. Changes in work force structure
b. Globalization of production d. Lessening of governmental controls

24. A major management challenge for firms with global brands such as Nike has been:
a. The reaction of Western consumers to allegations of unfair unemployment practices used by subcontractors in countries
b. Checking that performance and rewards systems take into consideration codes of conduct
c. Physical risk such as danger of staff being taken hostage and of having property damaged
d. Having national “managers” in various countries with various structural forms for coordination and accountability

25. The term “offshoring” is frequently used as a subcategory of:
a. MNE training c. Drilling
b. Outsourcing d. Internationalizing

26. International call-centers are an example of:
a. NGO c. Offshoring activities
b. Social dumping d. Lobbying

27. Guanxi is:
a. A network connection based on dyadic, personal relationships between people
b. A term used to describe skill shortages in India and China
c. A flourishing business process outsourcing industry
d. The world’s largest International call center

28. Ex-host-country nationals ( EHCN) is
a. A person who was fired in a MNE and wants to return to their home country
b. A person who studied abroad and returns to their home country
c. A manager who is transferred from one country to another and then returns to the home country
d. An international traveler who is banned from their home country

29. Common reasons for offshoring failure is all EXCEPT:
a. Unsatisfactory quality of products or services
b. Problems of management control
c. Inadequate training
d. Rapid turnover of local staff
e. Language problems

30. Iron rice bowl refers to:
a. Additional iron supplement added in a bowl of cereal
b. Guaranteed continuation of employment
c. Exclusive offshore activities in China
d. Stringent compensation differentials


1. What are some factors which may require multinational headquarters to be involved in industrial relations?

2. What are the three ways that a trade union may limit the strategic choices of multinationals?

3. Trade unions share what seven concerns about dealing (negotiating) with a MNE?

4. What are some examples of social dumping?

5. How have unions responded to multinationals as the bargaining power of the multinationals has grown?

6. What does the term offshoring mean? What are some of the weaknesses in the business process outsourcing (BPO) industry?

7. What is guanxi?

8. What are some reasons that an offshoring activity can fail?

CHAPTER 10: IHRM Trends and Future Challenges


1. The existence of universal ethical principles can be seen in agreements that exist among nations in the United Nations Declaration of Human Rights.

2. Bribery involves the payment to agents to motivate them to complete task they would do in the normal course of their duties.

3. Bribery undermines equity, efficiency and integrity in the public service.

4. There has been an international movement to criminalize the practice of bribery.

5. The Foreign Corrupt Practice Act (FCPA) was enacted to prohibit German based firms and nationals from making bribery payment.

6. HR professionals provide training in understanding the difference between corrupt bribery payments, gifts and allowable facilitation payments.

7. In 1996 the United Nations adapted the Declaration Against Corruption and Bribery in International Commercial Transactions.

8. MNE should not consider integrity as a basis for selecting an international assignee.

9. Expatriate can cut “ethical corners” to deliver good financial results as they are in a foreign country.

10. By systematically analyzing people and processes, IHRM professionals may contribute to “stabilizing risk through recommendations that “harden” processes in the value chain.

11. The Berlin-based non-government lobby group, Transparency International (TI) publishes an n annual Corruption Perceptions Index.

12. The three least corrupt countries in the world are New Zealand, Denmark and Singapore.

13. Each member of the OECD must submit a peer review report listing all their government officials bribed throughout the year.

14. There is no right or wrong in business.

15. Complexity of evaluating the overall performance of foreign subsidiaries and their senior management team will remain a dominant issue in international business in the twenty-first century.

16. Wal-Mart is an example of an NGO.

17. Greenpeace, an environmental group, has become internationalized and tend to have National ‘managers’.

18. Traditionally many domestic and international human resource managers have never been responsible for legal compliance and training issues related to safety in the workplace.

19. Terrorism is perceived to be a significant threat by MNEs.

20. Cyber-terrorism is activities to secure internal communications, open records, and maintenance of back-up system.

21. The field of IHRM has been criticized as being slow to develop as a rigorous body of theory.


1. The “general affairs” aspect of IHRM refers to:
a. The expectation that the human resource function will be the first line of defense in dealing with unpredictable and emergent issues from varied environments.
b. The mass conglomeration of all the different aspect of the IHRM.
c. The expectation that the human resource function will be the resource of last resort for unexpected issues and problems
d. The cross-cultural, coordinative aspect of IHRM

2. For the ethical absolutist:
a. There are no universal or international rights and wrongs
b. One should always do what one would do at home
c. There are fundamental principles of rights and wrongs
d. There are no rights and wrongs as far as business is concerned

3. “When in Rome, do as the Romans do” is an example of:
a. Ethical absolutism c. Ethical relativism
b. Ethical universalism d. Ethical religion

4. The need for international accords and corporate codes of conducts have :
a. Grown commensurately with the spread of international business
b. Decreased considerably with the spread of international business
c. Remained the same with the spread of international business
d. Decreased due to the countries becoming more socially attune

5. What are the two most frequent ethical problems encountered by international managers?
a. Child labor and prostitution c. Bribery and pornography
b. Bribery and corruption d. Corruption and slavery

6. The Foreign Corrupt Practice Act (FCPA) was passed in
a. 1965 c. 1980
b. 1977 d. 1959

7. As of 2009 how many countries have adapted the Declaration Against Corrupt and Bribery in International Commercial Transactions?
a. 30 c. 38
b. 15 d. 50

8. The countries perceived to be the least corrupt are:
a. USA, Chile and Belgium c. Guinea, Myanmar and Haiti
b. Denmark, New Zealand, Singapore d. Canada, Switzerland and Sweden

9. Instruments in developing and maintaining ethical cultures by expatriates can be reinforced by
a. Performance appraisal, compensation programs and trips home
b. Money, money and money
c. Exotic vacations and bonuses
d. Performance appraisals, shorter hours and trips home

10. To avoid the temptation to cut “ethical corners” expatriates should:
a. Be sent on vacations
b. Not be pressured to meet unreasonable goals
c. Be given ethical and cultural training
d. Should have a compensate salary to maintain an appropriate standard of living

11. Which country lobbied for many years to enact uniform domestic government regulations concerning bribery and corruption in the MNE environment?
a. Germany c. USA
b. Finland d. Switzerland

12. Who adopted the Declaration Against Corruption and Bribery in International Commercial Transactions?
a. The Geneva Convention c. The USA
b. The EU d. The United Nations

13. A typical short-term assignment in IHRM is a:
a. Training position c. Expatriate position
b. Marketing position d. Virtual position

14. IHRMs have largely ignored the non-government organizations because:
a. They don’t have the same physical risk
b. Their management ethos are values-driven, charitable and philanthropic ideals
c. Their management ethos are reflected by effectiveness and efficiency
d. They do not have national managers

15. The macro level of terrorist threats is an attack:
a. At the level of the individual person
b. At the specific region or industry
c. Of the global environment
d. At the cyber or information system environment

16. Activities to secure internal communications (emails, telephone) and employee privacy regulations would fall under which risk assessment category?
a. Cyber-terrorism c. Emergency preparedness
b. Industrial espionage, theft and sabotage d. Pandemics

17. Which of the following would be considered in the risk assessment category of in-facility security?
a. Protocol for evacuation c. The sabotage of software systems
b. Bomb threat procedures d. Providing portable 5 minute air packs

18. What does stabilizing risk through “harden” processes in the value chain mean?
a. To recruit people with capabilities and skills relevant to identified risk assessments
b. Replacing people with machines to ensure seniority protocols
c. Recruiting security specialist rather than functional experts
d. Eliminating at-risk steps in the value chain

19. What would be considered a NGO?
a. Red Cross c. Audi
b. Wal-Mart d. NATO

20. It is generally agreed internationally that the one thing that can most readily undermine equity, efficiency and integrity in the public service, undercut public confidence in markets, add cost to products and effects the safety and well-being of the general public is:
a. Bribery c. Sabotage
b. Facilitating payments d. Cyber-terrorism

21. The field of international human resource management has been regarded as :
a. A long standing cornerstone of business studies
b. Necessary in the MNE schools
c. A marginal academic area
d. Problematic

22. Multinational chief executives report terrorism:
a. Is not a significant threat to business growth, nor a threat to other organizations
b. Is a significant threat to business growth, but is not a threat to their organizations
c. Is not a significant threat to business growth , but is a threat to their organization
d. Is a significant threat to business growth and a significant threat to their organization

23. Research in the field of HRM:
a. Is relatively cheap and straightforward and simple
b. Is relatively expensive, yet straight forward and simple
c. Is relatively expensive and complicated
d. Is relatively cheap and uninteresting to most researchers

24. A working set of corporate risk assessment categories – a starting point for a MNE specific risk audit:
a. Do not yet exist
b. Consists of in value and out of value elements and counter espionage
c. Disaster protocols, workplace violence & industrial theft
d. Consists of in- facility emergency and disaster preparedness, in facility security, industrial espionage, cyber-terrorism and out-of-facility fire and travel risks

25. Emerging risk categories are all EXCEPT:
a. Avian flu c. Pandemics
b. Political terrorist groups d. Bribery

26. Bribery is:
a. Payments to agents to do things that are inconsistent with the purpose of their position to gain unfair advantage
b. Activities to secure internal communications in order to gain an unfair advantage
c. The act of hardening facilities in order to gain an unfair advantage
d. Unethical pressure to deliver good financial statements

27. What year was the International Journal of Human Resource Management established?
a. 1970 c. 1990
b. 1980 d. 2000

28. Low risk firms in low risk environments:
a. Do not need to invest as heavily in security systems and protocols
b. Should follow security strategies that focus on hardening individual sites
c. Should invest in elaborate risk management strategies
d. Should build redundant infrastructure

29. The three levels of terrorist threats are all EXCEPT:
a. Micro level c. Intra level
b. Primary level d. Macro level

30. Most executives:
a. Do not have a system to respond to critical incidents such as kidnapping of an executive
b. Are unwilling to discuss the protocols processes systems and structures in sensitive areas concerning critical incidents
c. Outsource their security concerns
d. Are unwilling to negotiate with terrorist


1. What are five categories of external risk assessment which needs to be addressed by a multinational enterprise?

2. What are the three levels of international human resource management analysis of potential risk from terrorist?

3. What are some non-government organizations and do they have the same international human resource management issues?

4. What are some developments in the international sector concerning bribery and corruption?

5. Security risk can be partitioned into two dimensions. What are the dimensions and describe low and high risk per each dimension?