MGT 510 Midterm and Final Exam – Strayer University NEW

MGT/510 Midterm and Final Exam – Strayer NEW

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Chapters 1 Through 15

Chapter 1 Multinational Management in a Changing World

MULTIPLE CHOICE

1. Businesses of all sizes are increasingly looking for global opportunities because
a. Trade barriers are falling.
b. Money is flowing more freely across countries.
c. The world is becoming one interconnected economy.
d. All of the above.

AACSB Analytic, Strategy

PTS: 1

2. Globalization is
a. The trend of businesses expanding beyond their domestic boundaries.
b. Increasing average temperature over the globe.
c. The increased use of global satellite communication systems.
d. A strategy of developing unique products for each nation in the world.

AACSB Reflective thinking, Environmental influence

PTS: 1

3. Which of the following would not be considered a basic source of globalization?
a. Similar customer needs
b. Falling of trade barriers
c. Advances in communication technology
d. Differentiation among countries

AACSB Reflective Thinking, Environmental influence

PTS: 1

4. Multinational management is
a. A strategy of developing similar strategies for different countries.
b. The trend of business expanding beyond local boundaries.
c. The formulation and design of management systems to successfully take advantage of international opportunities and respond to international threats.
d. None of the above

AACSB Reflective thinking, Strategy

PTS: 1

5. According to the text, the multinational company
a. Is required to be a public corporation.
b. Is any company that engages in any business function across borders.
c. Must sell overseas to be a true multinational.
d. Must be large.

AACSB Reflective thinking, Strategy

PTS: 1

6. Which of the following is not a classification of economic systems noted in the text?
a. Domestic economies
b. Transition economies
c. LDCs
d. Emerging markets

AACSB Reflective thinking, Environmental influence

PTS: 1

7. Transition economies are
a. Mature economies with substantial per capita GDP and international trade.
b. Led by Hong Kong, Singapore, South Korea, and Taiwan.
c. Countries changing from government-controlled or communistic economies to a more free market capitalism.
d. None of the above

AACSB Reflective thinking, Environmental influence

PTS: 1

8. Emerging markets include
a. OECD countries.
b. Brazil, China, Russia, India.
c. Korea, Japan and USA.
d. Hungary, Poland, Slovakia.

AACSB Reflective thinking, Environmental influence

PTS: 1

9. Developing economies are
a. Mature economies with substantial per capita GDP and international trade.
b. Hong Kong, Singapore, and Taiwan.
c. Countries in the process of changing their economies from government-controlled to a more free market capitalism.
d. None of the above

AACSB Reflective thinking, Environmental influence

PTS: 1

10. Emerging markets are defined as those that are:
a. Growing rapidly.
b. Transitioning from a communist-controlled economy to capitalism.
c. Seen to have impact only sporadically.
d. Enjoying a mature economy.

AACSB Reflective thinking, Environmental influence

PTS: 1

11. Major regional trade agreements include all of the following EXCEPT
a. EU.
b. NAFTA.
c. APEC.
d. PROTEC.

AACSB Reflective thinking, Legal responsibilities

PTS: 1

12. The economic agreement that links the US, Canada, and Mexico in an economic bloc that allows freer exchange of goods and services is known as the
a. EU.
b. OPEC.
c. APEC.
d. None of the above

AACSB Reflective thinking, Legal responsibilities

PTS: 1

13. The World Trade Organization:
a. Is a major trading company.
b. Succeeded the GATT agreements.
c. Collects duties for member countries.
d. Is a consulting group for companies who wish to engage in international trade.

AACSB Reflective thinking, Legal responsibilities

PTS: 1

14. Examples of developed economies would include:
a. The U.S. and Japan.
b. Hungary and Poland.
c. Argentina and Brazil.
d. Hong Kong and Singapore.

AACSB Reflective thinking, Creation of value

PTS: 1

15. According to your text, FDI means
a. Foreign development initiatives.
b. Various investment policies of the U.S. government.
c. A foreign company has an ownership position in a company in another country.
d. A type of international negotiation strategy.

AACSB Reflective thinking, Legal responsibilities

PTS: 1

16. The two forms of risk discussed in the text include
a. Exchange rate risk and corruption risk.
b. Business risk and social risk.
c. Sales risk and employment risk.
d. Economic and political risk.

AACSB Reflective thinking, Environmental influence

PTS: 1

17. Economic risks discussed in the text include
a. Anything a government might do or not do that might adversely affect a company.
b. The likelihood of losing money if one invests in stocks.
c. Exchange and interest rates.
d. Expropriating of foreign firms by the local government without any compensation.

AACSB Reflective thinking, Environmental influence

PTS: 1

18. Anything that a government might do to affect a multinational adversely is known as
a. Exchange rate risk.
b. Business risk.
c. Sales risk.
d. Political risk.

AACSB Reflective thinking, Leadership

PTS: 1

19.. A global product or service is
a. Adapted for each country’s unique needs.
b. A similar product or service for all customers throughout the world.
c. A product or service that requires bilingual customers.
d. Products developed for use outside the country.

AACSB Reflective thinking, Creation of value

PTS: 1

20. Which of the following statements about the Internet and Information Technology is true?
a. The Internet is benefiting companies worldwide.
b. Electronic communications does not allow companies to communicate with locations around the world.
c. Information technology is not encouraging a borderless financial market.
d. Information technology does not allow the sharing of information around the world.

AACSB Technology, Information technology

PTS: 1

21. The free market reforms in emerging countries are creating a potential group of
a. new competitors.
b. old competitors.
c. subsidized firms.
d. government companies.

AACSB Analytic, Environmental influence

PTS: 1

22. Which of the following statements is true about privatization?
a. Developing nations have the highest rate of privatization.
b. The leading privatizers in the world do not face competition.
c. Privatization is the sale of private business to government investors.
d. Privatization is absent in transition economies.

AACSB Analytic, Legal responsibilities

PTS: 1

23. Global customers:
a. Search for government-controlled enterprises.
b. Provide reduced government trade protection.
c. Search the world for their supplies without regard to national boundaries.
d. Encourage large firms to sell to them.

AACSB Reflective thinking, Strategy

PTS: 1

24. Global trade has this important effect on developing new competitors.
a. It facilitates the transfer of technology, allowing former assemblers to become creators.
b. It facilitates the transfer of knowledge, allowing former builders to become assemblers.
c. It reduces competition.
d. It reduces rivalry.

AACSB Reflective thinking, Creation of value

PTS: 1

25. Global standards for products
a. Are virtually impossible in technical industries.
b. Refer to having one product standard for all countries.
c. Puts companies at a strategic disadvantage.
d. All of the above

AACSB Reflective thinking, Creation of value

PTS: 1

26. According to the experts cited in your text, the next generation of global managers will need all of the following, EXCEPT:
a. Emotional intelligence
b. The ability to work with people from different cultural backgrounds
c. Poor negotiation skills
d. A local mindset

AACSB Reflective thinking, Leadership

PTS: 1

27. A global mindset requires managers to think globally but
a. act locally.
b. have emotional intelligence.
c. understand national cultures.
d. need accomplished negotiation skills.

AACSB Reflective thinking, Leadership

PTS: 1

28. The strategic approach to multinational management
a. Involves the development of one strategy for all countries.
b. Focuses on the skills and aptitudes that the next generation of global managers will need.
c. Is concerned with developing strategies that deal with operating in more than one country and culture.
d. None of the above

AACSB Reflective thinking, Strategy

PTS: 1

29. Which of the following statements about globalization is false?
a. Globalization is a simple evolutionary process.
b. Not all economies of the world are benefiting equally from globalization.
c. Terrorism, wars and SARS has limited and even reversed the effects of globalization.
d. All of the above statements are false.

AACSB Reflective thinking, Environmental influence

PTS: 1

30. Aggressive multinational companies from emerging markets are
a. expanding beyond their own borders.
b. staying within their own national borders.
c. help transition from a communist to a capitalist system.
d. unable to compete with western companies.

AACSB Reflective thinking, Strategy

PTS: 1

31. The set of technical standards developed by the International Organization for Standardization are known as
a. ISO 92.
b. ISO 14000.
c. ISO 9001: 2000.
d. None of the above

AACSB Reflective thinking, Legal responsibilities

PTS: 1

32. One of the major reasons why global companies seek to develop standard products is because
a. A standard product allows the company to save money because the same product can be sold anywhere.
b. A company can be more responsive to local cultural conditions.
c. It allows the company to invest more in research and development.
d. All of the above

AACSB Reflective thinking, Creation of value

PTS: 1

33. Emerging markets are
a. Located mostly in Africa and South America.
b. Similar to developed economies.
c. Those countries between developed and developing countries that present tremendous opportunities.
d. have free trade areas.

AACSB Reflective thinking, Environmental influence

PTS: 1

34. Which of the following statements regarding the European Union is true?
a. The European Union no longer exists.
b. The European Union includes Venezuela.
c. The European Union has a common currency.
d. All of the above are true.

AACSB Reflective thinking, Environmental influence

PTS: 1

35. Future trends indicate that _____ matters more than size of the company.

a. location
b. price
c. flexibility
d. a high standard

AACSB Reflective thinking, Strategy

PTS: 1

36. According to the text, all of the following includes factors that will shape the future business environment EXCEPT
a. Blurring of industry barriers.
b. Finding your niche.
c. Ability to find cheap labor.
d. Emphasis on innovation and the learning organization.

AACSB Reflective thinking, Strategy

PTS: 1

37. The best definition of multinational management includes which of these factors:
a. The formulation of strategies and management systems.
b. Designed to take advantage of international opportunities.
c. And to respond to international threats.
d. All of the above.

AACSB Reflective thinking, Strategy

PTS: 1

38. Multinational companies are defined by all of these factors EXCEPT:
a. Engaging in business beyond its domestic borders.
b. They may be of any size.
c. They may be corporations.
d. They must be public corporations.

AACSB Reflective thinking, Strategy

PTS: 1

39. The largest company in the world is:
a. Wal-Mart Stores.
b. BP.
c. Royal Dutch Shell.
d. Chevron.

AACSB Reflective thinking, Strategy

PTS: 1

40. The European Union consists of:
a. 25 member nations, with the 26th scheduled to become a member in 2013.
b. 26 member nations, with the 27th scheduled to become a member in 2013.
c. 27 member nations, with the 28th scheduled to become a member in 2013.
d. 25 member nations, with no others scheduled to become a member in 2013.

AACSB Reflective thinking, Strategy

PTS: 1

ESSAY

1. Discuss how any company can become a multinational company. What are some of the options available to companies that allow them to use international markets and locations competitively?

2. Discuss some reasons why reductions in world trade barriers are driving the world toward a global economy.

3. Discuss at least two major forces that are driving the world toward a global economy.

4. How is the Internet and Information technology helping companies deal with a global economy? How is the Internet and Information technology helping small companies and even companies from poorer nations?

5. What is corporate social responsibility? Why are firms trying to become socially responsible?

6. Discuss the differences between foreign trade and foreign direct investment.

7. What are some of the reasons why globalization and free trade are being criticized? Do you think that free trade is helping all countries? Why or why not?

8. Look at the information on the world’s leading exporters discussed in the text. Do you think these trends will continue in the future? Why?

9. Discuss the characteristics of a next generation of multinational managers. How can you develop those characteristics through education and experience?

10. Why should multinational management be studied? What are some of the elements of a strategic approach to multinational management?

Chapter 2 Culture and Multinational Management

MULTIPLE CHOICE

1. All the following is true about culture EXCEPT
a. Culture is the shared belief, norms, and values that guide everyday life of a group.
b. Culture is passed from generation to generation through norms, values, and beliefs.
c. Culture is always directly observable.
d. Culture is very pervasive in societies.

AACSB Reflective thinking, Individual dynamics

PTS: 1

2. The correct definitions of the levels of culture include all of these EXCEPT:
a. The national culture, dominant within the political boundaries of a nation-state.
b. The business culture, unique to each business.
c. The organizational culture, shared by members of an organization.
d. The occupational culture, shared by those in the same occupation.

AACSB Analytic, Individual dynamics

PTS: 1

3. Cultural values:
a. Represent our understandings about what is true.
b. Prescribe and proscribe behavior.
c. Tell us what is good and beautiful and what are legitimate goals in life.
d. Provide solutions to problems of adaptation to the environment.

AACSB Analytic, Individual dynamics

PTS: 1

4. All of the following are dimensions of Hofstede’s Model of National Culture EXCEPT:
a. Power avoidance.
b. Uncertainty avoidance.
c. Masculinity.
d. Long-term orientation.

AACSB Analytic, Individual dynamics

PTS: 1

5. International management may be influenced by which of the following levels of culture?
a. National
b. Business
c. Organization
d. All of the above

AACSB Analytic, Individual dynamics

PTS: 1

6. Aspects of the business culture in China include all of these EXCEPT:
a. Business moves more slowly.
b. One should respect Chinese business etiquette.
c. It is important to praise individuals who excelled.
d. The Chinese value harmony and order.

AACSB Analytic, Individual dynamics

PTS: 1

7. Organizational culture refers to the
a. Set of important understandings that members of an organization share.
b. Expected ways of behaving for people in the same occupational group.
c. Values and beliefs pertaining to doing business with a specific company.
d. None of the above

AACSB Reflective thinking, Individual dynamics

PTS: 1

8. Occupational cultures
a. Are the norms, values, beliefs, and expected ways of behaving for people in the same occupational group.
b. Are the set of important understandings that members of an organization share.
c. Are norms, values, and beliefs that pertain to all aspects of doing business in a country.
d. Are the dominant cultures within a country.

AACSB Reflective thinking, Individual dynamics

PTS: 1

9. Some people believe that the norms, values, and beliefs of their own culture represent the only correct ways of dealing with the world. This is called
a. High power distance.
b. Stereotyping.
c. Androgyny.
d. Ethnocentrism.

AACSB Reflective thinking, Individual dynamics

PTS: 1

10. Cultural relativism represents
a. The belief that all cultures are valid and ethical responses to the problems of living.
b. The belief that some cultures are relatively better than others.
c. The belief that your own culture is the best.
d. The degree of similarity between business and national cultures.

AACSB Reflective thinking, Individual dynamics

PTS: 1

11. A new expatriate manager located in India reports to you that all of her subordinate local managers lack initiative and will only do what she tells them to do. You realize that most Indian managers expect superiors to tell them what to do. You advise her of this, but also caution the new manager to avoid:
a. Rationalization.
b. Stereotyping.
c. Uncertainty avoidance.
d. Ethnocentrism.

AACSB Reflective thinking, Individual dynamics

PTS: 1

12. On which of Hofstede’s value dimensions does the U.S. rank highest?
a. Masculinity
b. Individualism
c. Patriotism
d. Power distance

AACSB Reflective thinking, Individual dynamics

PTS: 1

13. High power distance countries have norms, values, and beliefs such as
a. It is best to exercise power privately.
b. Everyone has a place, some are high and some are low.
c. A leader should develop his or her subordinates.
d. Leaders are made and not born.

AACSB Reflective thinking, Leadership principles

PTS: 1

14. Countries high on uncertainty avoidance have norms, values, and beliefs such as
a. Debates help you find the truth.
b. Deviant people should be tolerated.
c. Lack of rules in the workplace is good.
d. Experts and authorities are usually correct.

AACSB Reflective thinking, Individual dynamics

PTS: 1

15. Which of the following best describes U.S. culture with regard to individualism?
a. Lower than many European nations
b. Highest observed so far
c. About the same as Japan
d. Slightly above average

AACSB Reflective thinking, Individual dynamics

PTS: 1

16. An emphasis on leadership styles that appeal to duty and commitment to group goals are found primarily in countries with
a. Low masculinity.
b. Low uncertainty avoidance.
c. Short term orientations.
d. High collectivisim (low individualism).

AACSB Reflective thinking, Leadership principles

PTS: 1

17. Training for conformity and obedience, with valuations based on compliance and trustworthiness characterize countries with
a. Low power distance.
b. High power distance.
c. High individualism.
d. Short term orientations.

AACSB Reflective thinking, Individual dynamics

PTS: 1

18. Cultures with high power distance values probably have
a. Participative leadership.
b. Decentralized decision making.
c. Large wage differences between management and workers.
d. Managers selected by educational achievement.

AACSB Analytic, Individual dynamics

PTS: 1

19. Seniority tends to dominate evaluation and promotion in
a. Short term oriented cultures.
b. Cultures high on uncertainty avoidance and low on individualism.
c. Ethnocentric cultures.
d. Doing rather than being cultures.

AACSB Reflective thinking, Individual dynamics

PTS: 1

20. People from ________ countries would probably feel most comfortable with an autocratic (theory X) task- directed style of leadership.
a. High masculinity
b. High power distance
c. High uncertainty avoidance
d. All of the above

AACSB Reflective thinking, Individual dynamics

PTS: 1

21. A culture which has dominant values of success, money, and material things is probably
a. Low on power distance.
b. Low on individualism.
c. High on masculinity.
d. High on long term orientation.

AACSB Analytic, Individual dynamics

PTS: 1

22. In countries that rank high on Hofstede’s masculinity index
a. People prefer a short working day to get home to their families.
b. People feel more comfortable in small organizations.
c. Theory X management is rejected strongly.
d. Work is central to life and job recognition is very important.

AACSB Reflective thinking, Individual dynamics

PTS: 1

23. In a universalistic culture, the right way to treat people is based on
a. Personal relationships.
b. Principles of harmony within the group.
c. Abstract principles such as rules of law and religion.
d. Accepting the use of emotions.

AACSB Reflective thinking, Individual dynamics

PTS: 1

24. Which of the 7d cultural dimensions represents the extent to which an individual’s personal life is involved in his/her work relationships?
a. Neutral versus affective
b. Achievement versus ascription
c. Time orientation
d. Specific versus diffuse

AACSB Analytic, Individual dynamics

PTS: 1

25. The achievement versus ascription dimension addresses
a. The extent to which an individual’s life is involved with work.
b. The manner by which a society gives status.
c. The way a culture deals with the past, present, and future.
d. The belief people have in controlling their fate.

AACSB Reflective thinking, Individual dynamics

PTS: 1

26. Expressions of anger, laughter, gesturing, and emotional outbursts are considered acceptable in
a. Specific cultures.
b. Diffuse cultures.
c. Neutral cultures.
d. Affective cultures.

AACSB Analytic, Individual dynamics

PTS: 1

27. Which of the following statements is true regarding a future oriented society?
a. Managers and workers do not necessarily believe that hard work can lead to future success.
b. People believe they can control nature.
c. Organizational change is considered necessary and beneficial.
d. Individuals cannot influence the future.

AACSB Analytic, Individual dynamics

PTS: 1

28. In countries where it is believed that nature dominates people,
a. Managers are less likely to be fatalistic.
b. Managers emphasize planning and scheduling.
c. Managers actively try to change situations.
d. Managers believe that they must accept situations rather than changing them.

AACSB Analytic, Individual dynamics

PTS: 1

29. The ability to interact effectively in multiple cultures is known as
a. Trustworthiness.
b. Cultural intelligence.
c. Cultural relativism.
d. None of the above

AACSB Reflective thinking, Individual dynamics

PTS: 1

30. Discussing cultural paradoxes, the text indicates that although the US scores very high on individualism, it also has the highest percentage of
a. unmotivated population.
b. uncaring seniors.
c. homeless people.
d. charity giving in the world.

AACSB Analytic, Individual dynamics

PTS: 1

31. A cultural paradox is defined as:
a. Group situations define cultural prescriptions.
b. Individual situations define cultural prescriptions.
c. Group situations contradict cultural prescriptions.
d. Individual situations contradict cultural prescriptions.

AACSB Reflective thinking, Individual dynamics

PTS: 1

32. When hiring for managerial jobs in high power distance countries, preference is generally given to individuals
a. having a high social class or a degree from an elite university.
b. from all social classes.
c. based on their qualifications and skills.
d. All of the above

AACSB Analytic, Individual dynamics

PTS: 1

33. The range of feelings outwardly expressed in society refers to the cultural dimension of ________.
a. Uncertainty avoidance
b. Universalism vs. particularism
c. Neutral vs. affective
d. Diffuse vs. specific

AACSB Reflective thinking, Individual dynamics

PTS: 1

34. Preference for involvement in multiple areas of personal and work life simultaneously are more likely in
a. Specific cultures.
b. Diffuse cultures.
c. Neutral cultures.
d. Affective cultures.

AACSB Analytic, Individual dynamics

PTS: 1

35. Which of the following cultural dimensions is NOT included in Hofstede’s model of national culture?
a. Power distance
b. Individualism
c. Masculinity
d. Neutrality

AACSB Reflective thinking, Individual dynamics

PTS: 1

36. US firms often outsource customer service to workers in a foreign country. To minimize difficulties, such workers receive cross-cultural training which may include:
a. Training workers to reduce or eliminate an accent.
b. Educating workers regarding US culture.
c. Requiring workers to speak only English while on duty.
d. All of the above

AACSB Reflective thinking, Individual dynamics

PTS: 1

37. Which of the following cultural dimension represents the extent to which individuals are expected to be fair, altruistic, caring and generous?
a. Performance orientation
b. Individualism
c. Humane orientation
d. Power distance

AACSB Reflective thinking, Individual dynamics

PTS: 1

38. According to the text, which of the following two dimensions are not considered by Hofstede and is unique to the GLOBE cultural dimensions framework?
a. Power distance and humane orientation
b. Long-term orientation and uncertainty avoidance
c. Masculinity and Individualism
d. Humane orientation and performance orientation

AACSB Reflective thinking, Individual dynamics

PTS: 1

39. Cultural paradoxes represent
a. Cases where situations in reality seem to contradict cultural prescriptions.
b. The assumption that all people within a culture behave, feel and act the same.
c. The belief that a person’s culture is superior.
d. The belief that one’s culture is inferior.

AACSB Reflective thinking, Individual dynamics

PTS: 1

40. According to research discussed in the text, which of the following may help managers become more culturally intelligent?
a. Exposure to new cultural experiences in other countries
b. Learning to trust each people from individualistic cultures
c. Having a short term orientation
d. All of the above are true

AACSB Reflective thinking, Individual dynamics

PTS: 1

ESSAY

1. Define national culture, business culture, occupational, and organizational culture.

2. Describe three management implications of high individualism versus collectivism (low individualism).

3. What are country clusters? Explain with an example.

4. What are cultural paradoxes? Give one example.

5. Describe some characteristics of cultures high on power distance. Compare the management implications with cultures low on power distance.

6. Describe some characteristics of cultures high on collectivism. Compare the management implications with cultures low on collectivism.

7. Describe some characteristics of cultures high on masculinity. Compare the management implications with cultures low on masculinity.

8. Discuss four of the 7d cultural dimensions. What are some implications of these dimensions for international management?

9. Why do the rankings on some cultural dimensions such as individualism differ between the 7d and Hofstede models?

10. Discuss the GLOBE cultural framework. How is this cultural framework different from Hofstede’s framework?

Chapter 3 The Institutional Context of Multinational Management

MULTIPLE CHOICE

1. The national context of a society is made up of
a. The national and business cultures of that society.
b. The social institutions of that society.
c. The national cultures and social institutions of that society.
d. The national cultures of that society.

AACSB Reflective thinking, Environmental influence

PTS: 1

2. A complex of positions, roles, norms, and values organizing relatively stable patterns of human resources to sustain viable social structures refers to which of the following?
a. Entrepreneurship
b. Social institutions
c. Comparative advantage
d. Strategy of the multinational company

AACSB Reflective thinking, Environmental influence

PTS: 1

3. According to the model discussed in the text, the national context does which of the following?
a. Creates a resource pool
b. Influences the business environment and helps create induced factor conditions
c. Does not influence the business environment
d. Does not help create induced factor conditions

AACSB Reflective thinking, Environmental influence

PTS: 1

4. An economic system where production activities are decentralized to private owners who carry out these activities to make a profit is known as a
a. Capitalist economy.
b. Command economy.
c. Socialist economy.
d. Mixed economy.

AACSB Reflective thinking, Environmental influence

PTS: 1

5. Which of the following statements is NOT TRUE regarding the experiences countries go through as they undertake market transitions from socialism to a more market based economy?
a. Drastic measures have to be taken to turn around formerly inefficient companies.
b. Managers’ thinking have to be changed so that they can understand management functions.
c. Financial systems have to be left unregulated to accurately reflect market prices.
d. More workers have to be hired as companies find that they are understaffed.

AACSB Reflective thinking, Environmental influence

PTS: 1

6. A society that is characterized by dominance of the manufacturing or secondary sectors is a/an
a. Industrial society.
b. Pre-industrial society.
c. Post-industrial society.
d. Market society.

AACSB Reflective thinking, Environmental influence

PTS: 1

7. Which of the following statements is TRUE regarding post-industrial societies?
a. Post-industrial societies are characterized by the dominance of manufacturing sectors.
b. Post-industrial societies tend to favor economic achievement.
c. Post-industrial societies tend to emphasize quality of life over economic achievement.
d. All of the above are true.

AACSB Reflective thinking, Environmental influence

PTS: 1

8. Which of the following are key social institutions that are the most likely to influence the business environment of a country?
a. Economic system
b. Level of industrialization
c. Religion
d. All of the above

AACSB Reflective thinking, Environmental influence

PTS: 1

9. Which of the following systems encourage the pursuit of collective goals such as social equality and solidarity?
a. Economic system
b. Market economy
c. Command economy
d. Capitalist economy

AACSB Reflective thinking, Environmental influence

PTS: 1

10. According to the text, which of the following statements regarding workers in formerly socialist economies is NOT TRUE?
a. Workers in formerly socialist economies are very trusting of each other
b. Workers in formerly socialist economies are generally reluctant to cooperate and work with each other
c. Workers in formerly socialist economies tend to favor personal relationships as key to success as opposed to their work performance
d. All of the above are true

AACSB Reflective thinking, Environmental influence

PTS: 1

11. Which of the following societies tend to determine occupations based on ascription (family background) and social status?
a. Industrial societies
b. Postindustrial societies
c. Socialist societies
d. Pre industrial societies

AACSB Reflective thinking, Environmental influence

PTS: 1

12. Which of the following four religions are practiced by 71% of the world’s population?
a. Jainism, Hinduism, Islam and Christianity
b. Hinduism, Christianity, Islam, and Sikhism
c. Christianity, Hinduism, Islam and Buddhism
d. Judaism, Christianity, Buddhism, and Islam

AACSB Reflective thinking, Environmental influence

PTS: 1

13. Which of the following religions is most practiced around the world?
a. Christianity
b. Buddhism
c. Hinduism
d. Islam

AACSB Reflective thinking, Environmental influence

PTS: 1

14. Which of the following religions has strict gender roles and also prohibits multinationals from paying or receiving interest on transactions?
a. Islam
b. Buddhism
c. Christianity
d. Jainism

AACSB Reflective thinking, Environmental influence

PTS: 1

15. Which religion is considered to be timeless and eternal as it not based on a single founder or event?
a. Jainism
b. Christianity
c. Hinduism
d. None of the above

AACSB Reflective thinking, Environmental influence

PTS: 1

16. Which of the following religions is based on the idea that craving and desires produce suffering but that it also possible to reach a stage where there is no longer any suffering?
a. Christianity
b. Judaism
c. Hinduism
d. Buddhism

AACSB Reflective thinking, Environmental influence

PTS: 1

17. The cultural and economic changes that occur because of how production is organized and distributed in society refers to which concept?
a. religion
b. education
c. industrialization
d. dominant economic type

AACSB Reflective thinking, Environmental influence

PTS: 1

18. In industrial societies, occupational placement is based on universalistic criteria such as
a. Age.
b. Religion.
c. Ascription.
d. Achievement.

AACSB Reflective thinking, Environmental influence

PTS: 1

19. A multinational manager carefully considers the list of festivals that are celebrated in a country in order to allow for holidays for his/her employees. Which social institution is most likely being considered here?
a. Industrialization
b. Market transition
c. Education
d. Religion

AACSB Analytic, Environmental influence

PTS: 1

20. Pre industrial societies tend to have
a. Poor infrastructure and support.
b. Adequate infrastructure.
c. Favorable business conditions.
d. Government support.

AACSB Reflective thinking, Environmental influence

PTS: 1

21. An increased emphasis on quality of life over achievement oriented norms is typical of
a. Pre-industrial societies.
b. Industrial societies.
c. Post-industrial societies.
d. None of the above

AACSB Reflective thinking, Environmental influence

PTS: 1

22. A multinational Human Resource Manager’s decision to promote an individual results in wide discontent in the foreign subsidiary. The manager finds that although the promoted individual’s performance is exemplary, most employees feel that the promotion should have gone to another individual who comes from an important family. The foreign subsidiary is most likely located in a/an
a. Industrial society.
b. Pre-industrial society.
c. Capitalist society.
d. Post-industrial society.

AACSB Reflective thinking, Environmental influence

PTS: 1

23. In which of the following societies would people most likely prefer non-monetary incentives?
a. Industrial society
b. Pre-industrial society
c. Post-industrial society
d. None of the above

AACSB Reflective thinking, Motivation concepts

PTS: 1

24. High rankings on the materialist index of some countries (e.g., Hungary, India, Brazil) suggest that individuals in these countries are
a. Favor non material incentives.
b. Achievement oriented.
c. Motivated by non-monetary rewards.
d. Hinduism.

AACSB Reflective thinking, Environmental influence

PTS: 1

25. When industrialization is inwardly oriented, local industries are promoted to satisfy the
a. Need to export.
b. Local population.
c. Requirements of multinational companies.
d. Domestic market and preserve foreign exchange.

AACSB Analytic, Environmental influence

PTS: 1

26. When industrialization is outward oriented, foreign exchange is
a. Encouraged and exporting is promoted.
b. Discouraged and exporting is not favored.
c. Not welcomed.
d. Used to fund governments in power.

AACSB Reflective thinking, Environmental influence

PTS: 1

27. The famous German Sociologist, Max Weber, argued that the Protestant work ethic
a. Led to the emergence of capitalism in Western Europe.
b. Led to the decline of capitalism in Western Europe.
c. Led to an acute distaste for the accumulation of wealth.
d. Led to the rise of socialism in Eastern Europe.

AACSB Analytic, Environmental influence

PTS: 1

28. One important issue relevant to multinationals, is the extent to which educational systems encourage students to
a. Be innovative and creative.
b. To expect a more ethical atmosphere.
c. Passively accept what is taught.
d. None of the above

AACSB Reflective thinking, Environmental influence

PTS: 1

29. When multinationals pay low wages or use child labor, they often receive
a. Support and praise.
b. Imprisonment.
c. Negative publicity.
d. Social responsibility.

AACSB Reflective thinking, Environmental influence

PTS: 1

30. According to the text, all of the following statements regarding education and educational systems around the world are TRUE except
a. Universal education enrolment is a goal of most countries.
b. Educational levels give an indication of the skill and productivity in any society.
c. The focus of educational systems around the world are fairly similar in terms of whether these systems emphasize academic or vocational aspects.
d. All of the above statements are true.

AACSB Analytic, Environmental influence

PTS: 1

31. The educational attainment scores
a. Are fairly similar for most countries.
b. Give an idea of the abundance of engineers for research and development purposes.
c. Reflect the mean years of schooling of people in any society.
d. All of the above are true of educational attainment scores.

AACSB Reflective thinking, Environmental influence

PTS: 1

32. Which of the following is not an implication of educational systems as they apply to multinationals?
a. Educational level gives an indication of the skill and productivity of workers in any society.
b. Educational systems have implications for how labor force issues are approached and policies implemented.
c. Educational levels can be gauged to give an idea of what multinationals can expect.
d. All of the above are true

AACSB Analytic, Environmental influence

PTS: 1

33. In societies with high social inequality, resources are controlled by
a. A majority of people.
b. Very few people.
c. The Government.
d. Religious institutions.

AACSB Reflective thinking, Environmental influence

PTS: 1

34. When a society expects that while men should work outside, and women ideally stay at home, this exhibits which of the following features?
a. Need for domestic products
b. Open societies
c. Growing levels of industrialization and economic development
d. Strict division of society by gender

AACSB Reflective thinking, Environmental influence

PTS: 1

35. Postindustrial societies are typically characterized by the dominance of
a. Service and manufacturing sectors.
b. Service sectors.
c. Manufacturing sectors.
d. Agricultural sectors.

AACSB Reflective thinking, Environmental influence

PTS: 1

36. The degree to which people have privileged access to resources and positions within societies is
a. An indication of social inequality.
b. The same around the world.
c. Has no implications for multinationals.
d. All of the above

AACSB Reflective thinking, Environmental influence

PTS: 1

37. Which of the following statements about the GINI index is FALSE?
a. The GINI index represents the extent of inequality in people’s income within a society
b. Ranges from 0 to 100
c. Is scaled so that 0 represents no inequality while 100 represents perfect inequality
d. Is scaled so that 100 represents no inequality while 0 represents perfect inequality

AACSB Reflective thinking, Environmental influence

PTS: 1

38. The movement from a socialist economy to a free market economy is also known as which of the following?
a. Market transition
b. Dominant economic type
c. Rapid industrialization
d. Government regulation

AACSB Analytic, Environmental influence

PTS: 1

39. The index of economic freedom may be used by multinationals to understand the nature of
a. market transitions
b. national culture
c. national context
d. governmental intervention

AACSB Reflective thinking, Environmental influence

PTS: 1

40. Which of the following has important implications for multinationals?
a. Religion
b. Education and economic systems
c. Industrialization and inequality
d. All of the above

AACSB Reflective thinking, Environmental influence

PTS: 1

ESSAY

1. Define social institutions. How do social institutions affect individuals and organizations?

2. Define national context. Explain how national context influences organizations.

3. What are the three major types of economic systems? What are the effects of economic systems on how organizations are structured in societies?

4. What are some implications of the market transitions that many formerly communist societies are experiencing? What are some major challenges facing multinationals as they try to motivate workers in these transition economies?

5. Compare and contrast pre-industrial, industrial and post-industrial societies. Discuss the implications for multinationals of any one of these three types of economies.

6. What are some major philosophies of each of the world’s major religions? Pick two religions and discuss how they affect the business environment.

7. How does the educational system influence the business environment in any country?

8. What is social inequality? What implications does social inequality have for multinationals?

Chapter 4
Managing Ethical and Social Responsibility Challenges in Multinational Companies

MULTIPLE CHOICE

1. International business ethics
a. Present problems similar to domestic business ethics.
b. Pertain to the rules and values that determine actions that companies should follow when dealing with other companies.
c. Pertain to those unique ethical problems faced by managers conducting business across countries.
d. None of the above

AACSB Ethics, Ethical responsibilities in organizations and societies

PTS: 1

2. Which of the following statements is NOT TRUE regarding social responsibility?
a. Social responsibility is not linked with business ethics.
b. Refers to the idea that businesses have certain responsibilities to society beyond making profits.
c. Means that a company has to take into consideration various stakeholders when making decisions.
d. Is concerned with the ethical consequences of policies and procedures of the company as an organization.

AACSB Ethics, Ethical responsibilities in organizations and societies

PTS: 1

3. The ethical philosophies that consider actions as good or bad regardless of their outcomes are
a. The teleological ethical theories.
b. Utilitarianism.
c. Deontological theories of ethics.
d. None of the above

AACSB Ethics, Ethical responsibilities in organizations and societies

PTS: 1

4. Utilitarianism, as a form of ethical philosophy,
a. Argues that what is good or moral comes from acts that produce the greatest good for the greatest number of people.
b. Argues that actions by themselves have a good or bad morality regardless of their consequences.
c. Is one form of deontological ethical theory.
d. Is a moral language proposed by Donaldson.

AACSB Ethics, Ethical responsibilities in organizations and societies

PTS: 1

5. Which of the following statements are true about teleological ethical theories?
a. The morality of an act comes from its consequences.
b. Utilitarianism is one of the most popular teleological theory.
c. Actions by themselves have a good or bad morality regardless of their consequences.
d. All of the above are true.

AACSB Ethics, Ethical responsibilities in organizations and societies

PTS: 1

6. Stealing a loaf of bread to feed a hungry family can be justified by which ethical theory?
a. Social responsibility ethical theory
b. Deontological ethical theory
c. Moral languages
d. Utilitarianism

AACSB Ethics, Ethical responsibilities in organizations and societies

PTS: 1

7. Moral languages
a. Are a form of deontological ethical theory.
b. Focus on the consequences of actions rather than their worth.
c. Describe the ways people think about general issues.
d. Are used to explain ethical choices.

AACSB Ethics, Ethical responsibilities in organizations and societies

PTS: 1

8. Moral languages include all of the following EXCEPT
a. Virtue and vice.
b. Self-control.
c. Avoiding harm.
d. Being ethical.

AACSB Ethics, Ethical responsibilities in organizations and societies

PTS: 1

9. Multinationals that provide fair wages to their local employees are following which type of moral language?
a. Avoiding harm
b. Ethical behavior
c. Rights and duties
d. Social contract

AACSB Ethics, Ethical responsibilities in organizations and societies

PTS: 1

10. According to the text, the United Nations Declaration of Human Rights is an example of which of the following?
a. Convenient imperialism
b. Transnational ethics
c. European codes
d. Moral language

AACSB Ethics, Ethical responsibilities in organizations and societies

PTS: 1

11. Written ethical codes may include which of the following?
a. Contracts
b. International laws
c. Laws of a country
d. All of the above

AACSB Ethics, Ethical responsibilities in organizations and societies

PTS: 1

12. Which of the following statements about bribes or questionable payments are true?
a. Bribes to expedite government actions or to gain business advantages are common in international business.
b. Most countries have formal laws forbidding bribes or questionable payments.
c. Enforceability of ethics varies in different countries.
d. All of the above

AACSB Ethics, Ethical responsibilities in organizations and societies

PTS: 1

13. The reason to know provisions of the FCPA is that it
a. Is the easiest to enforce and observe.
b. Probably encourages foreign bribery.
c. Is a tricky component for US companies.
d. Emphasizes the reasonable person concept.

AACSB Ethics, Ethical responsibilities in organizations and societies

PTS: 1

14. According to the FCPA, U.S. managers are criminally liable
a. Only for bribes that they pay directly to a foreign official.
b. Only for bribes paid in the U.S. and not in other countries where it is common practice in business dealings.
c. For all bribes by employees or agents of the U.S. company even if the U.S. managers do not know about them.
d. For bribes paid by foreign agents, if managers know about them.

AACSB Ethics, Ethical responsibilities in organizations and societies

PTS: 1

15. Which of the following payments would the Foreign Corrupt Practices Act allow?
a. Payments made under duress to avoid injury or violence
b. Small payments to encourage officials to do their legitimate and routine jobs
c. Payments that are considered lawful in the country
d. All of the above are allowed

AACSB Ethics, Ethical responsibilities in organizations and societies

PTS: 1

16. Ethical dilemmas are usually
a. Easy to resolve.
b. Clear and unambiguous.
c. Unclear and ambiguous.
d. Removed with a formal code of ethics.

AACSB Ethics, Ethical responsibilities in organizations and societies

PTS: 1

17. Proscriptive rules in codes of conduct:
a. Tell multinational companies or managers what they should do.
b. Are forms of moral language.
c. Tell multinational companies or managers what they cannot do.
d. All of the above

AACSB Ethics, Ethical responsibilities in organizations and societies

PTS: 1

18. Ethical convergence
a. Is similar to ethical relativism.
b. Refers to basic universal moral principles.
c. Is a form of ethical universalism.
d. Refers to the growing pressures for multinational companies to follow the same rules in managing ethical behavior and social responsibility.

AACSB Ethics, Ethical responsibilities in organizations and societies

PTS: 1

19. Pressures for ethical convergence include all of the following EXCEPT
a. The growth of international trade and trading blocs.
b. Increased interaction between foreign trading partners.
c. The need to have unique norms and values to manage their employees differently.
d. All of the above are true

AACSB Ethics, Ethical responsibilities in organizations and societies

PTS: 1

20. Prescriptive rules in codes of conduct
a. Tell multinational companies or managers what they should do.
b. Are forms of moral language.
c. Tell multinational companies or managers what they cannot do.
d. All of the above

AACSB Ethics, Ethical responsibilities in organizations and societies

PTS: 1

21. Ethical relativism
a. Argues that one should impose the home country’s ethical system everywhere.
b. Implies that ethics are relative to the type of philosophy used.
c. Means that each society’s view of ethics must be considered legitimate.
d. Means that the same ethical principles are universal.

AACSB Ethics, Ethical responsibilities in organizations and societies

PTS: 1

22. The argument that there are basic moral principles that transcend cultural and national boundaries is supported by
a. Ethical relativism.
b. Moral languages.
c. Ethical universalism.
d. None of the above

AACSB Ethics, Ethical responsibilities in organizations and societies

PTS: 1

23. When companies use the logic of ethical relativism to behave any way they please, this is known as
a. Prescriptive ethical management.
b. Proscriptive ethical management.
c. Convenient relativism.
d. Universal ethics applications.

AACSB Ethics, Ethical responsibilities in organizations and societies

PTS: 1

24. When companies use the logic of moral universalism and impose their views on the rest of the world, ________________ occurs.
a. Ethical divergence
b. Ethical convenience
c. Cultural imperialism
d. None of the above

AACSB Ethics, Ethical responsibilities in organizations and societies

PTS: 1

25. The form of analysis where the prime interest is what is the best decision for a company’s profit is
a. Legal analysis.
b. Ethical analysis.
c. Social responsibility analysis.
d. None of the above

AACSB Ethics, Ethical responsibilities in organizations and societies

PTS: 1

26. In an economic analysis
a. The manager considers the best decision for a company’s profits.
b. The manager focuses on meeting the laws of a country.
c. The manager goes beyond profits and analyzes the ethical consequences of decisions.
d. None of the above

AACSB Ethics, Ethical responsibilities in organizations and societies

PTS: 1

27. When facing an ethical question, the manager who uses legal analysis criteria
a. Is primarily interested in the decision that is best for the company’s profits.
b. Focuses on only meeting the laws of the country in which the company is operating.
c. Focuses on meeting the needs of other constituents beyond stakeholders.
d. Focuses on doing the right things.

AACSB Ethics, Ethical responsibilities in organizations and societies

PTS: 1

28. In an ethical analysis of a problem, a manager must
a. Focus on meeting the laws of the country in which the company is operating.
b. Focus on what is the best decision for a company’s profits.
c. Focus on the decisions with the best consequences.
d. None of the above

AACSB Ethics, Ethical responsibilities in organizations and societies

PTS: 1

29. The first duty of a multinational manager faced with a decision is
a. To consider whether the decision makes business sense.
b. To consider whether the decision meets the legal standard in the country.
c. To consider whether the decision is ethical.
d. To refer to the written codes of ethics.

AACSB Ethics, Ethical responsibilities in organizations and societies

PTS: 1

30. Ethical decision making of multinational managers preferably should
a. Be based solely on home country ethical principles.
b. Go beyond legal constraints and respect the local cultural norms.
c. Be primarily profitable for the multinational.
d. None of the above

AACSB Ethics, Ethical responsibilities in organizations and societies

PTS: 1

31. A multinational manager decides that it would be unethical to close a foreign plant as employees in that plant are not being treated with dignity. Which ethical theory is the manager using to reach that conclusion?
a. Teleological ethical theory
b. Utilitarian ethical theory
c. Deontological ethical theory
d. None of the above

AACSB Ethics, Ethical responsibilities in organizations and societies

PTS: 1

32. A multinational manager decides to allow hiring of children for a foreign plant as such practices are accepted in the country. Which ethical principle is she basing her decision on?
a. Ethical universalism
b. Convenient ethical universalism
c. Ethical relativism
d. None of the above

AACSB Ethics, Ethical responsibilities in organizations and societies

PTS: 1

33. A multinational manager is considering closing a plant in China as wages have increased considerably in China. The manager considers the implications of laying off people and closing the plant on the profits of the company. Which form of analysis is the manager doing?
a. Legal analysis
b. Profit making analysis
c. Ethical analysis
d. None of the above

AACSB Ethics, Ethical responsibilities in organizations and societies

PTS: 1

34. Which act was proposed by the Securities Exchange Commission in reaction to the accounting scandals at companies like Enron and Worldcom?
a. Sarbanes-Oxley
b. WTO
c. Corruption Perception Index
d. The Ethisphere Institute

AACSB Ethics, Ethical responsibilities in organizations and societies

PTS: 1

35. Which of the following statements regarding the Foreign Corrupt Practices Act (FCPA) is NOT TRUE?
a. Bribes or payments made under duress to avoid injury or violence are acceptable.
b. Small payments to encourage officials to do their legitimate and routine jobs are acceptable.
c. Payments or gifts to foreign government officials for the sake of gaining or retaining business are acceptable.
d. In an unstable political environment, payments made to local officials to avoid harassment of employees are acceptable.

AACSB Ethics, Ethical responsibilities in organizations and societies

PTS: 1

36. Which of the following statements is TRUE regarding cultural relativism as an approach in international business ethics?
a. What is right or wrong depends on the culture.
b. A guide for what is legal and appropriate is the local culture.
c. Companies should follow the moral norms of the local culture.
d. All of the above statements are true.

AACSB Ethics, Ethical responsibilities in organizations and societies

PTS: 1

37. Deontological ethical theories
a. Argue that the morality of an act comes from this consequences.
b. Would provide justification for closing a plant and laying off workers to reduce costs.
c. Is most typically represented by cost and benefit analyses.
d. Argue that actions by themselves have a good or bad morality irrespective of the consequences.

AACSB Ethics, Ethical responsibilities in organizations and societies

PTS: 1

38. According to the text, which of the following is NOT a consequence of corruption?
a. Companies typically make up the bribe by increasing the contract price.
b. Companies use poorer quality materials to make up for the bribe.
c. Companies devote some of the bribe to socially responsible causes.
d. Corruption can also result in collusions among firms.

AACSB Ethics, Ethical responsibilities in organizations and societies

PTS: 1

39. The world seems to be moving towards transnational ethics because:
a. Globalization dramatically increases contact among people from different ethical and cultural systems.
b. This contact creates pressure for the development of new transnational agreements regarding business practices.
c. International trade and trading blocs such as the EU and NAFTA are growing.
d. All of these reasons.

AACSB Ethics, Ethical responsibilities in organizations and societies

PTS: 1

40. Which of the following ethical dilemmas is addressed by the Sarbanes Oxley Act?
a. Competition
b. Auditor responsibility and independence
c. Sourcing of cheap labor
d. Company strategy

AACSB Ethics, Ethical responsibilities in organizations and societies

PTS: 1

ESSAY

1. Discuss some of the issues that make international business ethics more complex than domestic business ethics.

2. Do laws always reflect a community’s ethics? Give an example to explain your answer.

3. Discuss the difference between teleological and deontological theories of ethics. Give examples of how an international manager might appeal to either type of theory when faced with the opportunity to offer a bribe.

4. How do social institutions and culture affect the practice of business ethics in different countries?

5. Compare and contrast ethical relativism and ethical universalism. What are some of the dangers of adopting either ethical relativism or ethical universalism when making decisions?

6. Describe the U.S. FCPA, what makes it challenging for U.S. firms, and how they deal with that challenge.

7. What are moral languages? How can moral languages help multinational become more ethical?

8. Discuss some of the pressures for ethical convergence. What are some implications for multinational management?

9. Compare and contrast prescriptive codes of ethics with proscriptive codes.

Chapter 5
Strategic Management in the Multinational Company: Content and Formulation

MULTIPLE CHOICE

1. Generic strategies
a. Occur when a company can outmatch its rivals in attracting and maintaining its customers.
b. Represent basic ways that domestic and multinational companies keep and achieve competitive advantage.
c. Are all based on finding ways to provide superior value to the customer.
d. None of the above

AACSB Reflective thinking, Strategy

PTS: 1

2. Which of the following is a primary generic strategy?
a. Cross country subsidizing
b. Low Cost
c. Competitive pricing
d. Critical success factors

AACSB Reflective thinking, Strategy

PTS: 1

3. Differentiation leads to higher profits by
a. Charging a higher price than competitors.
b. Offering the customer better value.
c. Offering a product with more features and quality.
d. All of the above

AACSB Reflective thinking, Strategy

PTS: 1

4. A low cost strategy leads to higher profits by
a. Charging a higher price than competitors.
b. Offering the customer products with more features.
c. The cost savings that firms achieve.
d. Adding unique features to products.

AACSB Reflective thinking, Strategy

PTS: 1

5. __________ strategies achieve higher profits by charging higher prices.
a. Low cost
b. Differentiation
c. Competitive advantage
d. Generic

AACSB Reflective thinking, Strategy

PTS: 1

6. The value chain
a. Represents a generic strategy.
b. Represents all the activities that a firm uses to market and deliver its products.
c. Represents all the activities that a firm uses to design, produce, market, deliver, and support its products.
d. None of the above

AACSB Reflective thinking, Strategy

PTS: 1

7. Upstream activities in the value chain are concerned, in part, with
a. The primary activities.
b. The support activities.
c. Input logistics.
d. After market service.

AACSB Reflective thinking, Strategy

PTS: 1

8. Support activities include
a. Research and development.
b. Service repair.
c. Output logistics.
d. None of the above

AACSB Reflective thinking, Strategy

PTS: 1

9. Sales and dealing with distribution channels refer to _________ activities in the value chain.
a. Upstream
b. Support
c. Secondary
d. Downstream

AACSB Reflective thinking, Strategy

PTS: 1

10. Capabilities that lead to competitive advantage must be
a. Valuable, rare, and easy to copy.
b. Fairly substitutable.
c. Valuable, rare, and hard to copy.
d. None of the above

AACSB Reflective thinking, Strategy

PTS: 1

11. Competitive strategies
a. Are examples of basic generic strategies.
b. Are moves multinationals and other companies use to defeat competitors.
c. Can be low cost or differentiation.
d. All of the above

AACSB Reflective thinking, Strategy

PTS: 1

12. Offensive strategies
a. Are examples of basic generic strategies.
b. Are direct targeting/attacking of rivals.
c. Are attempts to reduce the risk of being attacked.
d. Are used to convince other firms to seek other targets.

AACSB Reflective thinking, Strategy

PTS: 1

13. Defensive strategies include
a. Direct attacks, end-run offensive, and acquisitions.
b. The generic strategies.
c. Counter-parries.
d. None of the above

AACSB Reflective thinking, Strategy

PTS: 1

14. Strategies used to attempt to reduce the risk of being attacked are
a. Defensive competitive strategies.
b. Offensive competitive strategies.
c. Generic strategies.
d. None of the above

AACSB Reflective thinking, Strategy

PTS: 1

15. Counter-parry
a. Is an example of an offensive strategy.
b. Is an example of a generic strategy.
c. Is fending off a competitor’s attack in one country by attacking the competitor in another country.
d. None of the above

AACSB Reflective thinking, Strategy

PTS: 1

16. Corporate level strategies
a. Are similar to the generic strategies.
b. Pertain to the operation of corporate divisions.
c. Are concerned with how single business companies choose strategies.
d. Are concerned with how companies choose their mixtures of different businesses.

AACSB Reflective thinking, Strategy

PTS: 1

17. Business level strategies
a. Include only the generic strategies.
b. Pertain to the operation of multiple businesses.
c. Are concerned with how single business companies choose strategies.
d. Are concerned with how companies choose their mixtures of different businesses.

AACSB Reflective thinking, Strategy

PTS: 1

18. In related diversification
a. Companies acquire businesses in any country.
b. Companies acquire businesses in any industry.
c. Companies acquire businesses that are similar in some way to their core business.
d. None of the above

AACSB Reflective thinking, Strategy

PTS: 1

19. Acquisition of mixtures of businesses in any industry is
a. Low cost strategy.
b. Unrelated diversification.
c. Related diversification.
d. A business level strategy.

AACSB Reflective thinking, Strategy

PTS: 1

20. This is considered to be a popular and controversial way to address internal cost inefficiencies.
a. Insourcing
b. Outsourcing
c. Related diversification
d. Unrelated diversification

AACSB Reflective thinking, Strategy

PTS: 1

21. Market size, ease of entry and exit, and economies of scale are all examples of
a. Defensive strategies.
b. Key success factors.
c. Dominant economic characteristics.
d. Differentiation.

AACSB Reflective thinking, Strategy

PTS: 1

22. Key success factors are
a. Examples of defensive strategies.
b. Important characteristics of a company or its product that lead to success in an industry.
c. Similar to generic strategies.
d. The economic characteristics of countries that lead to success.

AACSB Reflective thinking, Strategy

PTS: 1

23. The acronym SWOT stands for
a. Strategies with organizational timelines.
b. Selection, withdrawal, opportunities, and timeliness.
c. Strengths, weakness, opportunities, and threats.
d. Strategies, winning, organizations, and tender offers.

AACSB Reflective thinking, Strategy

PTS: 1

24. A strength is
a. A favorable condition in a company’s environment.
b. Distinctive capability, resource, skill, or other advantage that a company has vis-à-vis its competitors.
c. Represented by changes in the economic conditions in an industry.
d. None of the above

AACSB Reflective thinking, Strategy

PTS: 1

25. Weaknesses are
a. Lack of distinctive capabilities, resource, and skills that leads to competitive disadvantage compared to competitors.
b. Unfavorable conditions in a firm’s environment.
c. Relevant to both the internal and external environment of companies.
d. All of the above

AACSB Reflective thinking, Strategy

PTS: 1

26. BMW and Mercedes view their Japanese rivals moves into the upscale car market as a/an
a. Strength.
b. Weakness.
c. Opportunity.
d. Threat.

AACSB Reflective thinking, Strategy

PTS: 1

27. Matrix analyses
a. Help assess business portfolios.
b. Divide businesses into successes and failures.
c. Are less complicated for the multinational company.
d. All of the above

AACSB Reflective thinking, Strategy

PTS: 1

28. In the BCG Matrix, cash cows are
a. Businesses in a slow-growth industry where the company has a strong market share position.
b. Businesses in a fast growing industry where the company has a strong market share position.
c. Businesses in a slow-growth industry where the company has a weak market share position.
d. Businesses in a fast growing industry where the company has a weak market share position.

AACSB Reflective thinking, Strategy

PTS: 1

29. In the BCG matrix, the appropriate strategy for dogs should be
a. Invest and Expand.
b. Defend and Harvest.
c. Divest.
d. None of the above

AACSB Reflective thinking, Strategy

PTS: 1

30. In the BCG Matrix, Defend and Harvest are the most popular strategies for
a. Stars.
b. Dogs.
c. Cash cows.
d. Problem children.

AACSB Reflective thinking, Strategy

PTS: 1

31. Competitive advantage
a. Represent the basic ways that companies can provide superior value to customers.
b. Is one of the basic strategies.
c. Occurs when a company can outmatch its rivals in attracting and maintaining its customers.
d. Is best achieved using a low cost strategy.

AACSB Reflective thinking, Strategy

PTS: 1

32. The GE Portfolio matrix
a. Is the same as the Boston Consulting Group matrix.
b. Contains four cells based on industry and business strength.
c. Can be used to assess business level strategies.
d. Contains nine cells based on industry strength and business competitive position.

AACSB Reflective thinking, Strategy

PTS: 1

33. Capabilities
a. Are the inputs into a company’s production or service processes.
b. Are early activities in the value chain such as R&D and dealing with suppliers.
c. Are similar to distinctive competencies.
d. Represent the ability of companies to assemble and coordinate their resources in ways that lead to lower costs of differentiated outputs.

AACSB Reflective thinking, Strategy

PTS: 1

34. Favorable conditions in a firm’s external environment are known as
a. Strengths.
b. Capabilities.
c. Opportunities.
d. Distinctive competencies.

AACSB Reflective thinking, Strategy

PTS: 1

35. Which of the following more likely represents a threat to a multinational company like Toyota?
a. Higher prices charged by Toyota’s competitors.
b. Lower interest rates around the world that makes cars more affordable.
c. Toyota’s bad image among teenagers.
d. Kia and Hyundai’s entry in markets traditionally dominated by Toyota.

AACSB Reflective thinking, Strategy

PTS: 1

36. A company that has a limited product range, and sells to certain buyers in some geographical areas is said to have which of the following?
a. Broad competitive scope
b. Narrow competitive scope
c. Lack of competition
d. None of the above

AACSB Reflective thinking, Strategy

PTS: 1

37. Porter’s five forces help a multinational manager understand
a. The key success factors in an industry.
b. How to assess the attractiveness of the industries a company is involved in.
c. How to assess its unrelated diversification efforts.
d. The trends in its industry.

AACSB Reflective thinking, Strategy

PTS: 1

38. Which of the following forces is NOT one of the forces considered in Porter’s five forces analysis?
a. Degree of competition among existing competitors
b. Degree of governmental regulation in the industry
c. Threat of new entrants in the industry
d. Bargaining power of buyers in the industry

AACSB Reflective thinking, Strategy

PTS: 1

39. The degree to which competitors are confronted with alternatives for their products is referred to as which force in Porter’s five forces?
a. Threat of new entrants
b. Bargaining power of buyers
c. Degree of competition
d. None of the above

AACSB Analytic, Strategy

PTS: 1

40. The national context affects strategy through which of the following processes?
a. Encourage or discourage certain forms of businesses and strategies in each country
b. Factor conditions play a role in shaping each country’s unique resource base
c. Determine which resources are used, how they are used and which are developed
d. All of the above

AACSB Reflective thinking, Environmental influence

PTS: 1

ESSAY

1. Describe the low cost strategy as compared to the differentiation strategy.

2. Regarding low cost and differentiation strategies, when is each strategy appropriate?

3. Compare and contrast defensive and offensive strategies. Discuss when a multinational can use offensive strategies in one country and defensive strategies in another.

4. What is the value chain? How can an understanding of the value chain help a company be more successful in its generic strategy?

5. What is related diversification? When would you expect related diversification to be more profitable than unrelated diversification?

6. What is sustainable competitive advantage? What are some essential characteristics of company capabilities that can lead to sustainable competitive advantage?

7. Describe the SWOT analysis. Why is a SWOT analysis more complex for a multinational than for a domestic company?

8. Discuss some of the major issues a multinational manager needs to take into consideration when conducting an industry analysis.

9. What are key success factors? Discuss some KSFs that are most likely to vary by national context.

10. Discuss each of Porter’s five forces model. What information can a multinational obtain from Porter’s five forces industry analysis?

Chapter 6 Multinational and Entry-Mode Strategies: Content and Formulation

MULTIPLE CHOICE

1. According to the text, a fundamental dilemma faced by all multinationals is
a. The form of competitive strategy they should use.
b. How much they emphasize responding to differences in all the markets they operate.
c. How to fight their rivals.
d. None of the above

AACSB Reflective thinking, Strategy

PTS: 1

2. Responding to differences in the markets in all the countries in which a company operates is
a. The global-local dilemma.
b. The best strategy for success for a multinational.
c. The local-responsiveness solution.
d. The global solution.

AACSB Reflective thinking, Strategy

PTS: 1

3. The global solution to the global-local dilemma refers to
a. Conducting business similarly around the world.
b. Responding to differences in the global markets in which a company operates.
c. Customization of products to regional but not country differences.
d. None of the above

AACSB Reflective thinking, Strategy

PTS: 1

4. Conducting business similarly throughout the world, and locating company units wherever there is high quality and low cost is
a. The global-local dilemma.
b. The global integration solution.
c. The local responsiveness solution.
d. The multidomestic solution.

AACSB Reflective thinking, Strategy

PTS: 1

5. A multidomestic company gives strategic priority to
a. Providing a low cost product to local customers.
b. Adapting a product or service to local needs.
c. Having multiple locations for sources its raw materials.
d. Controlling the strategic options of local companies.

AACSB Reflective thinking, Strategy

PTS: 1

6. Which strategy attempts to balance advantages from three other multinational strategies?
a. Regional
b. Multidomestic
c. Transnational
d. International

AACSB Reflective thinking, Strategy

PTS: 1

7. Dispersing value-chain activities anywhere in the world where the company can do them best or cheapest refers to seeking
a. The global-local dilemma.
b. Comparative advantage of nations.
c. Competitive advantage of firms.
d. Locations advantages.

AACSB Reflective thinking, Strategy

PTS: 1

8. Comparative advantage is
a. Similar to competitive advantage.
b. A local responsiveness solution.
c. Where the company can produce the cheapest.
d. Advantages of nations over other nations.

AACSB Reflective thinking, Strategy

PTS: 1

9. Comparative advantages are
a. Cost or quality advantages particular to a nation.
b. Similar to competitive advantages.
c. Emphasized through multidomestic strategies.
d. None of the above

AACSB Reflective thinking, Strategy

PTS: 1

10. Selling global products and using similar marketing techniques worldwide is an example of a
a. Transnational strategy.
b. International strategy.
c. Multidomestic strategy.
d. Regional strategy.

AACSB Reflective thinking, Strategy

PTS: 1

11. A regional strategy refers to
a. Managing raw-material sourcing, production, marketing, and support activities within a particular region.
b. Selling global products and using similar marketing techniques worldwide.
c. Dispersing value-chain activities anywhere in the world where the company can do them best or cheapest.
d. None of the above

AACSB Reflective thinking, Strategy

PTS: 1

12. Global companies usually seek to
a. Provide unique products for all countries of the world.
b. Take advantage of different factor costs among countries.
c. Manufacture their products in every country.
d. Focus only on downstream activities in the value chain.

AACSB Reflective thinking, Strategy

PTS: 1

13. Common customer needs, global sources of raw material, and favorable trade policies all lead to
a. An increased focus on local markets.
b. More use of the multidomestic strategy.
c. More use of the local solution to the global-local dilemma.
d. A greater likelihood that companies select global strategies.

AACSB Reflective thinking, Strategy

PTS: 1

14. Having one set of products for North American countries and another set of products for Europe illustrates which strategy?
a. Multidomestic
b. Regional
c. Transnational
d. Global

AACSB Reflective thinking, Strategy

PTS: 1

15. Globalization drivers
a. Fall into four categories: market, costs, governments, and competition.
b. Are conditions in an industry that favor transnational or international strategies over multidomestic or regional strategies.
c. Indicate the degree of globalization of an industry.
d. All of the above

AACSB Reflective thinking, Strategy

PTS: 1

16. Asking diagnostic questions such as are there economies of scale, are there cheaper sources of raw materials, are there global sources of low-cost raw materials provide information regarding which globalization driver?
a. Global markets
b. Costs
c. Competition
d. Governments

AACSB Reflective thinking, Strategy

PTS: 1

17. Entry-mode strategies
a. Include multidomestic and transnational strategies.
b. Are options multinationals have to enter foreign markets and countries.
c. Are only processes by which firms fill overseas orders like domestic orders.
d. None of the above

AACSB Reflective thinking, Strategy

PTS: 1

18. Using intermediaries or go-between firms to provide the knowledge and contacts necessary to sell overseas is usually associated with
a. Direct exporting.
b. Franchising.
c. Indirect exporting.
d. Licensing.

AACSB Reflective thinking, Strategy

PTS: 1

19. A company that treats and fills overseas orders like domestic orders is an example of a
a. Indirect exporter.
b. Export management company.
c. Aggressive exporter.
d. Passive exporter.

AACSB Reflective thinking, Strategy

PTS: 1

20. International franchising
a. Is a comprehensive licensing agreement where the franchisor grants to the franchisee the use of a whole business operation.
b. When multinationals make a project fully operational and train local managers and workers before the owner takes control.
c. The use of intermediaries or go-between firms to provide the knowledge and contacts necessary to sell overseas is.
d. None of the above

AACSB Reflective thinking, Strategy

PTS: 1

21. When multinationals make a project fully operational and train local managers and workers before the owner takes control, they are using which entry-mode strategy?
a. Licensing
b. Franchising
c. Turnkey
d. Direct export

AACSB Reflective thinking, Strategy

PTS: 1

22. When a firm from another country has an equity (or ownership) position in a separate company, it is engaging in
a. An international cooperative alliance.
b. A turnkey operation.
c. A contract manufacturer.
d. FDI.

AACSB Reflective thinking, Strategy

PTS: 1

23. Foreign direct investment
a. Is an entry-mode strategy.
b. Means that a multinational owns, in part or in whole, an operation in another country.
c. Symbolizes the highest rate of internationalization.
d. All of the above

AACSB Reflective thinking, Strategy

PTS: 1

24. Major drawbacks of licensing include
a. The risk of losing the capital investment.
b. The risk of the local government changing international trade policies.
c. The loss of control and the possibility of creating a new competitor.
d. All of the above

AACSB Reflective thinking, Strategy

PTS: 1

25. Companies should license if
a. They want to control all aspects of operation.
b. Their product is older or a soon-to-be replaced technology.
c. They have the necessary resources to export or invest directly.
d. There are no tariffs or quotas.

AACSB Reflective thinking, Strategy

PTS: 1

26. If a company seeks a strategic alliance with another firm, it is a
a. Low cost strategy.
b. Franchising agreement.
c. Competitive agreement.
d. Cooperative agreement.

AACSB Reflective thinking, Strategy

PTS: 1

27. Advantages of foreign direct investment include
a. Increased capital investment.
b. Greater control of product and marketing strategy.
c. Greater exposure to financial risks.
d. The lower costs of using expatriates managers.

AACSB Reflective thinking, Strategy

PTS: 1

28. If management believes that it must control foreign sales, customer credit, and the eventual sale of the product, then the company should choose which of the following entry-mode strategies?
a. Indirect exporting
b. Licensing
c. Direct exporting
d. Franchising

AACSB Reflective thinking, Strategy

PTS: 1

29. When deciding on an entry-mode strategy, cultural distance is
a. The physical distance between two countries.
b. Not the distance between an organization’s culture and the local national culture.
c. Similar to the geographic distance.
d. None of the above

AACSB Reflective thinking, Strategy

PTS: 1

30. As entry-mode strategies, direct and indirect exporting have
a. High levels of control and low levels of risk.
b. Similar levels of risk and control as FDI.
c. Low levels of risk and control.
d. Are among the most risky.

AACSB Reflective thinking, Strategy

PTS: 1

31. Which of the following strategies gives top priority to seeking location advantages and to gaining operation efficiencies from worldwide operation?
a. Multidomestic strategy
b. Regional strategy
c. Transnational strategy
d. International strategy

AACSB Reflective thinking, Strategy

PTS: 1

32. If strategists in a firm believe that centralizing key activities such as R&D is necessary to reduce coordination costs and to achieve economies of scale, they are more likely to choose
a. An international strategy.
b. A transnational strategy.
c. A local strategy.
d. None of the above

AACSB Analytic, Strategy

PTS: 1

33. What dictates the choice of a multinational entry-mode strategy?
a. Strategic competition
b. Strategic reason to be in the market
c. Companies want to share risks and costs of developing technology
d. Companies want to achieve economies of scale

AACSB Reflective thinking, Strategy

PTS: 1

34. If a company believes that it needs to control foreign sales, customer credit, and sale of product to the customer, it is more likely to choose
a. Indirect exporting.
b. Rely on foreign intermediaries for export purposes.
c. Direct exporting.
d. None of the above

AACSB Reflective thinking, Strategy

PTS: 1

35. To deal with political risk, various private and government agencies offer
a. Insurance.
b. Assurance.
c. Investment.
d. All of the above are true.

AACSB Reflective thinking, Strategy

PTS: 1

36. A company pursuing a regional strategy
a. Has worldwide products and a worldwide value chain.
b. Sells the same product using only minor modification in marketing and product offerings.
c. Is similar to a company pursuing an international strategy.
d. Attempt to gain location advantages of more global transnational combined with some of the local-adaptation advantages of the multidomestic company.

AACSB Reflective thinking, Strategy

PTS: 1

37. Which of the following statements regarding exporting is FALSE?
a. Exporting is the easiest of entry-mode strategies.
b. Export can be of the passive form where overseas orders are treated like domestic orders.
c. Export can be indirect where companies rely on intermediaries to sell overseas.
d. Because it is the easiest form of going international, exports are not as important to the US economy.

AACSB Reflective thinking, Strategy

PTS: 1

38. Foreign direct investment
a. Exists when two or more firms have an ownership position in a separate company.
b. Requires at least three separate companies to combine resources.
c. Exists when two or more companies agree to cooperate in any value-chain activity.
d. The above statements are all true for equity international joint ventures.

AACSB Reflective thinking, Strategy

PTS: 1

39. Which of the following refers to the negative impact of political decisions or events on a multinational’s profitability?
a. Economic risk
b. Local government risk
c. Political risk
d. Control risk

AACSB Reflective thinking, Strategy

PTS: 1

40. Which of the following is NOT a factor considered when assessing political risk?
a. The durability of the political system
b. The role of the government, unions and the media in political stability
c. The profitability
d. The reliability of the rule of law

AACSB Reflective thinking, Strategy

PTS: 1

ESSAY

1. Describe the global-local dilemma. When is each solution most appropriate?

2. What are globalization drivers?

3. Discuss the conditions when a transnational or international firm is likely to outcompete a multidomestic or regional strategist. Contrast this with the opposite situation where the multidomestic is most likely to be successful.

4. Contrast the transnational and international strategies in their approach to location advantages.

5. You work for a small company that has an innovative low-cost production method for laser disks. A Japanese firm approaches your CEO to license the technology. The CEO asks you to write a report detailing the risks and potential benefits of this deal. What will you include in the report and why?

6. You work for a small company that has an innovative low-cost production method for laser disks that allow it to produce at very low cost. A Belgian firm approaches your CEO and offers to export your disks to Belgium for a commission. The CEO asks you to write a report detailing the risks and potential benefits of this deal. What will you include in your report and why

7. Under what conditions would a regional strategy be best for a multinational? Explain.

8. Discuss some key issues to consider when choosing an entry-mode strategy.

9. Discuss some general strategic considerations regarding multinational strategy when choosing a entry-mode strategy.

10. What is political risk? Discuss some of the aspects of political risk assessment. How can multinationals use political risk assessment?

Chapter 7 Small Businesses and International Entrepreneurship:
Overcoming Barriers and Finding Opportunities

MULTIPLE CHOICE

1. Small businesses differ from large businesses when going international primarily in
a. The available participation strategies.
b. The strategies they can use to go international.
c. Their founder’s or entrepreneur’s influence.
d. The available multinational strategies.

AACSB Reflective thinking, Creation of value

PTS: 1

2. Definitions of small businesses discussed in the text include the following EXCEPT
a. Number of employees.
b. Sales revenue.
c. Industry.
d. Type of product or service.

AACSB Reflective thinking, Creation of value

PTS: 1

3. An entrepreneur
a. Creates new ventures that seek profit and growth.
b. Is seldom the primary force behind a company’s decision to go international.
c. Can accurately predict the risks and uncertainties of his/her ventures.
d. Faces less uncertainty than a multinational.

AACSB Reflective thinking, Creation of value

PTS: 1

4. When a company sets up a sales branch in a foreign country, it is at what stage of the internationalization of the small entrepreneurial business?
a. Stage 1
b. Stage 2
c. Stage 3
d. Stage 4

AACSB Reflective thinking, Creation of value

PTS: 1

5. During the second stage (Export Management) of the small business model of internationalization, the company
a. Fills international orders only.
b. Specifically seeks export sales.
c. Seeks increased sales from licensing.
d. Sets up a local sales office in another country.

AACSB Reflective thinking, Creation of value

PTS: 1

6. A global start-up is
a. A company that goes global from day one of its life.
b. A company that starts a global strategy after exporting.
c. A company that skips the first stage of the Small Business Model of Internationalization.
d. None of the above

AACSB Reflective thinking, Creation of value

PTS: 1

7. One of the major advantages of being involved in Stage 5 (Production Abroad) of the stages of internationalization for small businesses is that it
a. Allows the company to cut the costs of direct investment.
b. Allows the company to avoid developing a globally integrated network.
c. Allows the company to gain local advantages such as product adaptation or production effectiveness.
d. Almost insures that the company will survive and prosper.

AACSB Reflective thinking, Creation of value

PTS: 1

8. Global start-ups occur when
a. Companies have consistent licensing agreements.
b. Companies start exporting as soon as they receive their first order.
c. Companies begin as multinationals.
d. Companies move rapidly through the stages of internationalization.

AACSB Reflective thinking, Creation of value

PTS: 1

9. Which of the following has helped to level the playing field for small businesses wanting to go international?
a. Technology and e-commerce
b. Sources of venture capital
c. Having a headquarters located near a major customer
d. The existence of trade shows

AACSB Reflective thinking, Creation of value

PTS: 1

10. The liabilities of size for small businesses imply that
a. Small businesses can grow as a result of going international.
b. Being small often means it may be more difficult to obtain necessary resources.
c. Small size creates only limited liability.
d. Small and new businesses can only succeed by exporting.

AACSB Reflective thinking, Creation of value

PTS: 1

11. Small business barriers to internationalization include all of the following EXCEPT
a. Small size means limited financial and personnel resources for international operations.
b. Top managers with limited international experience.
c. Positive attitudes of top managers about becoming multinationals.
d. Lack of sufficient scale to produce goods or services as efficiently as large companies.

AACSB Reflective thinking, Creation of value

PTS: 1

12. Although large businesses have more resources, small businesses have the advantage of:
a. size.
b. time.
c. speed.
d. a global culture.

AACSB Reflective thinking, Creation of value

PTS: 1

13. A small business global culture occurs when
a. Small businesses face global competition.
b. Key decision makers view competition as more domestic than global.
c. Organizations have managerial and worker values that view strategic opportunities as global and not just domestic.
d. Managers give priority to the relevance of national boundaries when conducting international business.

AACSB Reflective thinking, Creation of value

PTS: 1

14. The development of a global culture is affected by all of the following characteristics of the key decision makers EXCEPT
a. Ability to perform well at the domestic level.
b. International experience.
c. Perceived psychological distance to foreign markets.
d. Overall attitudes toward international strategies.

AACSB Reflective thinking, Creation of value

PTS: 1

15. All of the following are true about small business CEOs EXCEPT
a. Opening new markets is often the personal responsibility of the CEO.
b. They want to take a break from the daily management of their businesses by going overseas.
c. New international ventures may threaten their family life.
d. Their attitudes towards internationalization is a major factor in international success.

AACSB Reflective thinking, Creation of value

PTS: 1

16. Small businesses can potentially have more advantages than larger businesses in the global economy because
a. Small companies can change quickly to take advantage of opportunities in new markets.
b. Larger companies have more slack resources to absorb risk.
c. Small companies require a lot of travel from their CEOs.
d. Small companies have more access to resources.

AACSB Reflective thinking, Creation of value

PTS: 1

17. The small business advantage refers to
a. The energy and creativity entrepreneurs can put in their multinational operations.
b. The ease by which small companies can become global start-ups.
c. The speed by which entrepreneurs can react to changing conditions and capture significant sales before larger companies can react.
d. The number of venture capitalists willing to invest in successful small businesses.

AACSB Reflective thinking, Creation of value

PTS: 1

18. It is now easier to overcome the barriers to small business internationalization because of all of the following reasons EXCEPT
a. There are more government programs that support small business exporting and sales.
b. Trade agreements (such as NAFTA) are making international trade less complex.
c. Larger organizations are increasingly more willing to share their global expertise with smaller ones.
d. There is a wealth of information regarding international opportunities such as those available on the World Wide Web.

AACSB Reflective thinking, Creation of value

PTS: 1

19. Which of the following is not one of the questions to consider when a small business decides to go international?
a. Do we have a global product or service?
b. Do we have partners with which to go international?
c. Do we have the managerial, organizational, and financial resources to go international?
d. Is there a profitable market for our products or service?

AACSB Reflective thinking, Creation of value

PTS: 1

20. A strategic competitive advantage for breaking into the established pattern of commercial activity is a/an
a. Low cost strategy.
b. Differentiation Strategy.
c. Entry wedge.
d. Participation strategy.

AACSB Reflective thinking, Creation of value

PTS: 1

21. According to the text, which of the following participation strategies do small businesses emphasize?
a. Importing
b. Licensing
c. Foreign direct investment
d. Exporting

AACSB Reflective thinking, Creation of value

PTS: 1

22. The more common techniques of making international contacts used by small businesses include all of the following EXCEPT
a. Trade shows.
b. Seeking advice from foreign companies.
c. Government sponsored trade missions.
d. Catalogue expositions.

AACSB Reflective thinking, Creation of value

PTS: 1

23. An entry wedge is
a. A strategic competitive advantage for breaking into the established pattern of commercial activity.
b. A competitive opening in an industry.
c. A strategy used by only new companies.
d. None of the above

AACSB Reflective thinking, Creation of value

PTS: 1

24. First mover advantages occur when
a. A company can begin business as a global start-up.
b. A company adopts global strategies faster than competitors.
c. Company moves quickly into a new venture and establishes the business before other firms can react.
d. A company changes production technology.

AACSB Reflective thinking, Creation of value

PTS: 1

25. Technological leadership, as a source of first mover advantage refers to
a. A company beginning business as a global start-up.
b. A company that adopts global strategies faster than competitors.
c. A company that moves quickly into a new venture.
d. A company that is the first to use a new technology.

AACSB Reflective thinking, Creation of value

PTS: 1

26. First mover advantage includes all of the following EXCEPT
a. Technological leadership.
b. First access to natural and other resources.
c. Better ability to forecast market conditions.
d. Switching costs.

AACSB Reflective thinking, Creation of value

PTS: 1

27. Copycat businesses
a. Follow the “me too” strategy.
b. Adapt existing products or services to attract customers.
c. Find a niche or slight innovation to gain market share from existing businesses.
d. All of the above

AACSB Reflective thinking, Creation of value

PTS: 1

28. Successful strategies for copy cats include all of the following EXCEPT
a. Being the first to change to a new standard.
b. Transferring the location.
c. Seeking abandoned or ignored market.
d. Selling products at a global level.

AACSB Reflective thinking, Creation of value

PTS: 1

29. Future Tech International sells high tech products in Latin America, a market traditionally ignored by many high tech companies. What successful copycat strategy does this move represent?
a. Acquiring existing businesses
b. Becoming a dedicated distributor
c. Seeking abandoned or ignored markets
d. Being the first to change to a new standard

AACSB Reflective thinking, Creation of value

PTS: 1

30. Switching costs are
a. Expenses involved when a customer switches to a competitor’s product.
b. Forms of copycat strategies.
c. The costs incurred by a company when adopting a global standard.
d. None of the above

AACSB Reflective thinking, Creation of value

PTS: 1

31. The United Nations and Organization for Economic Cooperation and Development
a. Defines a small business as those having less than 500 employees.
b. Defines a small business as those with less than 100 employees.
c. Defines a small business based on industry and sales revenue.
d. All of the above

AACSB Reflective thinking, Creation of value

PTS: 1

32. When a small business uses significant resources to seek increased sales from exporting, it is what stage of internationalization?
a. Stage 1 – Passive exporting
b. Stage 2 – Export management
c. Stage 3 – Export department
d. Stage 4 – Sales branch

AACSB Reflective thinking, Creation of value

PTS: 1

33. International sales intensity represents
a. A significant size barrier to internationalization.
b. The amount of international sales as a proportion of total sales.
c. The amount of local sales as a proportion of international sales.
d. Is more relevant for larger businesses.

AACSB Reflective thinking, Creation of value

PTS: 1

34. All of the following are first mover advantages EXCEPT
a. First mover advantages gives the company first access to natural resources.
b. First mover advantages gives the company first access to social resources.
c. First mover advantages reduce switching costs.
d. All of the above are first mover advantages.

AACSB Reflective thinking, Creation of value

PTS: 1

35. The discovery, evaluation and exploitation of market opportunities refers to which of the following?
a. Entrepreneurship
b. International entrepreneurship
c. Small business
d. International opportunities

AACSB Reflective thinking, Creation of value

PTS: 1

36. Which of the following statements about small businesses in the US is FALSE?
a. Small businesses represent about 99.7% of all employing firms.
b. Small businesses generate about 15% of all new jobs annually.
c. Small businesses employ almost 41% of all high tech workers.
d. Small businesses represent almost 97% of identified exporters.

AACSB Reflective thinking, Creation of value

PTS: 1

37. When demand for a small business is so high in a foreign country that it justifies setting up a local branch, which of the following stages of internationalization is the small business at?
a. Export management
b. Passive exporting
c. Production abroad
d. None of the above

AACSB Reflective thinking, Creation of value

PTS: 1

38. A multinational manager is studying the data on total entrepreneurial activity ratings by country. She is most likely doing this in order to
a. Assess the level of entrepreneurship in a country.
b. Understand available industries.
c. Assess small business failure.
d. Understand opportunities for new ventures.

AACSB Analytic, Creation of value

PTS: 1

39. Many multinationals rely on the support and assistance provided by which of the following when entering a new country?
a. Customers
b. Entrepreneurs and small businesses
c. World Bank
d. Trade Shows

AACSB Reflective thinking, Creation of value

PTS: 1

40. Which of the following is NOT a common customer contact technique used by small firms to get find customers?
a. Trade shows
b. Industry advisory boards
c. Government sponsored trade missions
d. Catalog expositions

AACSB Reflective thinking, Creation of value

PTS: 1

ESSAY

1. Why are small businesses important for most economies?

2. What are the advantages of a small business going international through incremental stages rather than as a global start-up?

3. Describe the Small Business Stage Model.

4. Discuss some of the advantages that the Internet can offer small businesses when going international.

5. Identify two or three small business barriers to internationalization. If you were a recently hired manager of a small business facing great opportunities in a foreign market, how would you go about overcoming these barriers.

6. Imagine a small business manager asks you, a recent business college graduate, to help her decide whether she should enter the export market. What questions would you ask her and why?

7. How do small businesses and entrepreneurs affect national economic growth and development? Explain why multinationals consider entrepreneurship levels in the country when making their location choices.

8. Discuss ways that a small business manager can make the contacts necessary to implement an exporting strategy.

9. Consider three of the suggested strategic moves for copycat businesses. Which of these strategies might be most successful when expanding into the international market as opposed to the domestic market?

10. What is the first mover advantage? What are the most common sources of first mover advantages? How can a small business benefit from first mover advantage?

Chapter 8 Organizational Design for Multinational Companies

MULTIPLE CHOICE

1. The manner in which organizations structure subunits and use coordination and control mechanisms to achieve their strategic goals is the
a. Organizational structure.
b. Organizational culture.
c. Degree of formalization.
d. Organizational design.

AACSB Reflective thinking, Strategy

PTS: 1

2. The functional structure is considered most efficient when
a. An organization gets too large.
b. When customers need special functions.
c. When the organization is in the mature phase of the life cycle.
d. When organizations have few products.

AACSB Reflective thinking, Strategy

PTS: 1

3. All of the following statements are true about the functional structure EXCEPT
a. In the functional structure, departments perform separate business functions such as marketing or manufacturing.
b. The functional structure is the simplest of organizations.
c. In small organizations, the functional structure is the least efficient of all structures.
d. Because functional subunits are separated from each other, coordination among the units can be difficult.

AACSB Reflective thinking, Strategy

PTS: 1

4. One of the major reasons why companies choose a functional structure is because
a. It allows adapting products to country tastes.
b. It enables responding to the needs of different types of customers.
c. It helps balance the strategy with the organization design.
d. It helps achieve efficiency.

AACSB Reflective thinking, Strategy

PTS: 1

5. All of the following statements are true about product structures EXCEPT
a. The product structure is the most efficient of all structures.
b. Product organizations must still perform some functional tasks of a business.
c. The structure builds a department or subunit around a product .
d. Managers choose product structures when they believe that a product or a group of products is sufficiently unique to require focused efforts on one type of product or service.

AACSB Reflective thinking, Strategy

PTS: 1

6. The least efficient of the following structural options is
a. Product structure.
b. Functional structure.
c. Vertical structure.
d. Graphic structure.

AACSB Reflective thinking, Strategy

PTS: 1

7. Organizations that are designed with mixtures of structures that are the best to implement their strategies are
a. Product structures.
b. Geographic structures.
c. Hybrid structures.
d. Functional structures.

AACSB Reflective thinking, Strategy

PTS: 1

8. When exports become a significant percentage of company sales and a company wishes greater control over its export operations, managers often create a separate
a. Export department.
b. Functional department.
c. Product department.
d. Liaison office.

AACSB Reflective thinking, Strategy

PTS: 1

9. The structure adopted by companies in the early stage of internationalization is usually
a. Replica.
b. Network.
c. Export department.
d. Transnational subsidiary.

AACSB Reflective thinking, Strategy

PTS: 1

10. The type of subsidiary that supports a multinational firm strategy based on location advantages is a/an
a. Export department.
b. Minireplica subsidiary.
c. Transnational subsidiary.
d. International division.

AACSB Reflective thinking, Strategy

PTS: 1

11. The minireplica subsidiary
a. Copies the structure and strategy of companies located in the same country.
b. Mostly copies the structure and strategy of the parent company.
c. Replicates only minor parts of the parent’s production technology.
d. Copies the structure of small foreign firms.

AACSB Reflective thinking, Strategy

PTS: 1

12. Transnational subsidiaries
a. Look pretty much like a domestic division of the parent company.
b. Often have different structures and functions in each location.
c. Exist near the border to facilitate exporting.
d. Serve mostly to coordinate international currency exchange.

AACSB Reflective thinking, Strategy

PTS: 1

13. The international division differs from the export department in that
a. The international division is usually larger and has greater responsibilities.
b. The international division has more extensive staff with international expertise.
c. Top management expects the staff of the international division to perform functions such as negotiating licensing and joint venture agreements, translating promotional material, or providing expertise on different national cultures and social institutions.
d. All of the above are true.

AACSB Reflective thinking, Strategy

PTS: 1

14. Which of the following are considered to be the structural building blocks for running a multinational?
a. International division
b. Metanational
c. Mini replica
d. Foreign subsidiaries

AACSB Reflective thinking, Strategy

PTS: 1

15. Adopting strategies that include both concerns for local adaptation needs and concern for the economic and product development benefits of globalization is possible with the
a. Worldwide product structure.
b. Worldwide geographic structure.
c. Hybrid structure.
d. None of the above

AACSB Reflective thinking, Strategy

PTS: 1

16. The worldwide geographic structure is usually considered best to implement a _____ strategy.
a. Multidomestic or regional
b. Transnational
c. International
d. Indirect exporting

AACSB Reflective thinking, Strategy

PTS: 1

17. The worldwide product structure is usually considered best to implement a/an _____ strategy.
a. Multidomestic or regional
b. Transnational
c. International
d. Indirect exporting

AACSB Reflective thinking, Strategy

PTS: 1

18. The most balanced structural solution to the national responsiveness versus global efficiency dilemma is
a. The transnational network structure.
b. The worldwide product structure.
c. Worldwide geographic structure.
d. The matrix structure.

AACSB Reflective thinking, Strategy

PTS: 1

19. All of the following statements are true about the worldwide matrix structure EXCEPT
a. To balance the benefits produced by geographic and product structures and to coordinate a mixture of product and geographic subunits, some multinationals create a worldwide matrix structure.
b. Unlike most hybrid organizations, the worldwide matrix structure is a symmetrical organization.
c. It has unequal lines of authority for product groups and for geographic divisions.
d. The matrix structure works well only when there are near equal demands from the environment for local adaptation and for product standardization with its associated economies of scale.

AACSB Reflective thinking, Strategy

PTS: 1

20. Which of the following structures best support strategies that emphasize global products and rationalization?
a. The functional structure
b. The matrix structure
c. The geographic structure
d. The product structure

AACSB Reflective thinking, Strategy

PTS: 1

21. A __________ helps link the organization horizontally.
a. Control system
b. Coordination system
c. Cultural system
d. Centralized operations

AACSB Reflective thinking, Strategy

PTS: 1

22. The type of vertical control mechanism most often associated with a profit center is
a. Bureaucratic.
b. Output.
c. Cultural.
d. Decision making.

AACSB Reflective thinking, Strategy

PTS: 1

23. The type of control system favored by the transnational is
a. Bureaucratic.
b. Output.
c. Cultural.
d. Decision making.

AACSB Reflective thinking, Strategy

PTS: 1

24. _________ mean/means that management locates subsidiaries anywhere in the world where they can benefit the company.
a. Dispersed subunits
b. Specialized operations
c. Interdependent relationships
d. None of the above

AACSB Reflective thinking, Strategy

PTS: 1

25. __________ help link the organization vertically, up and down the organizational hierarchy.
a. Coordination systems
b. Dispersed subunits
c. Control systems
d. Subunits

AACSB Reflective thinking, Strategy

PTS: 1

26. Output control systems
a. Focus on managing behaviors, not outcomes, within the organization.
b. Represent the level in the organizational hierarchy where managers have the authority to make decisions.
c. Assess the performance of a unit based on results, not on the processes used to achieve those results.
d. Use the organizational culture to control the output and attitudes of employees.

AACSB Reflective thinking, Strategy

PTS: 1

27. Which of the following types of control system uses budgets, statistical reports, standard operating procedures, and centralized decision making to manage organizational processes?
a. Profit center
b. Bureaucratic control system
c. Decision-making control
d. Cultural control system

AACSB Reflective thinking, Strategy

PTS: 1

28. A permanent unit of the organization designed to focus the efforts of different subunits on particular problems is a
a. Task force.
b. Full-time integrator.
c. Liaison.
d. Team.

AACSB Reflective thinking, Strategy

PTS: 1

29. Temporary groups created to solve a particular organizational problem such as entering a new market are
a. Teams.
b. Liaisons.
c. Taskforces.
d. Full time integrators.

AACSB Reflective thinking, Strategy

PTS: 1

30. Which of the following is NOT true regarding the use of control options by most multinationals?
a. Most multinationals use several types of coordination mechanisms.
b. Multinationals with export departments have very high need for coordination.
c. Matrix and transnational structures have very high needs for coordination.
d. For transnational networks, teams are increasingly virtual with members seldom meeting face-to-face.

AACSB Reflective thinking, Strategy

PTS: 1

31. All of the following are TRUE about product structures EXCEPT
a. Product structure organizations must still perform functional tasks of a business.
b. In product structures, functional areas are concentrated in separate subunits.
c. Product structures are required when products or service are sufficiently unique to require different functional support.
d. All of the above are true.

AACSB Reflective thinking, Strategy

PTS: 1

32. Subunits of a multinational company located in other countries than the parent company’s headquarters is known as
a. Functional divisions.
b. Foreign functional divisions.
c. Foreign subsidiaries.
d. International minireplica.

AACSB Reflective thinking, Strategy

PTS: 1

33. The basic issue (s) that need to be considered for organizational design are
a. Division of work.
b. Coordination.
c. Control.
d. All of the above

AACSB Reflective thinking, Strategy

PTS: 1

34. A large, entrepreneurial multinational that is able to tap into hidden pockets of innovation, technology, and market know-how scattered around the world, especially in emerging markets is known as
a. A transnational.
b. A minireplica subsidiary.
c. A metanational.
d. A foreign subsidiary.

AACSB Reflective thinking, Strategy

PTS: 1

35. Which of the following control systems uses the organizational culture to control behaviors and attitudes of employees?
a. Cultural control systems
b. Decision-making control systems
c. Bureaucratic control systems
d. Output control systems

AACSB Reflective thinking, Strategy

PTS: 1

36. Which of the following is NOT one of the questions asked when designing an organization?
a. How should work be divided among the organization’s subunits?
b. How should the work be coordinated among the various subunits?
c. How should the work of the various subunits be controlled?
d. How many subunits should the multinational have?

AACSB Reflective thinking, Strategy

PTS: 1

37. Which of the following control systems focuses on managing behaviors of employees rather than outcomes?
a. Bureaucratic control systems
b. Budgets and standard operating procedures
c. Cultural control systems
d. None of the above

AACSB Reflective thinking, Strategy

PTS: 1

38. Which of the following represents the strongest coordination mechanism?
a. Task forces
b. Teams
c. Liaison roles
d. Direct contact

AACSB Reflective thinking, Strategy

PTS: 1

39. Knowledge that usually resides within employees and is dependent on the organization’s culture and context is
a. Explicit knowledge.
b. Knowledge management.
c. Tacit knowledge.
d. None of the above

AACSB Reflective thinking, Strategy

PTS: 1

40. Which of the following statements regarding explicit knowledge is FALSE?
a. Explicit knowledge can be easily codified.
b. Explicit knowledge can be found in records and other information repositories.
c. Explicit knowledge can be easily transferred from employee to employee.
d. Explicit knowledge usually resides within employees and is dependent on the organization’s context and culture.

AACSB Reflective thinking, Strategy

PTS: 1

ESSAY

1. Discuss some of the advantages of a functional structure over the product or geographic structure. When is it necessary to adopt a geographic or product structure?

2. What are some advantages of a worldwide product structure over a worldwide geographic structure? What type of company would most likely choose each type?

3. What are hybrid structures? What are the costs and benefits of having a hybrid structure?

4. Describe the use of export management as a design structure to go international. When does it become necessary to use an international division? What are some of the problems associated with international divisions?

5. What is a minireplica subsidiary? How is a minireplica subsidiary different from a transnational subsidiary?

6. Compare and contrast bureaucratic control with output control.

7. What is cultural control? Why is it the favored control mechanism for transnational-network structures?

8. Describe some functions of coordination mechanisms. Pick two coordination systems and describe how they work.

9. What are control systems? Pick two control systems and describe how they work.

10. What is the transnational-network structure? Discuss some costs and benefits of having a transnational network structure. Under what situation would a transnational-network be appropriate?

11. What is knowledge management? Distinguish between the types of knowledge.

Chapter 9 International Strategic Alliances: Management and Design

MULTIPLE CHOICE

1. There are several issues to consider in picking a partner for a strategic alliance. One of these is
a. Go for the biggest partner possible because they have the most assets.
b. Seek strategic complementarity.
c. Make sure your partner will be dependent on you and not vice versa.
d. All of the above

AACSB Reflective thinking, Group dynamics

PTS: 1

2. According to the text, all of the following are true about strategic alliances EXCEPT
a. They are inherently unstable and provide significant management challenges.
b. Estimates of failure rates range from 30 to 60 percent.
c. They are among the most popular choice to go international.
d. They are used mostly as a means to share technology.

AACSB Reflective thinking, Group dynamics

PTS: 1

3. The most important decision in setting up a strategic alliance is usually about
a. Working out the proportions of ownership.
b. Decision on the proper management structure.
c. Developing a detailed contract.
d. Selecting the right partner.

AACSB Reflective thinking, Group dynamics

PTS: 1

4. In operations alliances, multinational companies
a. Use research and development to merge different technical skills.
b. Share the risk of developing new or costly technology.
c. Gain access to new markets.
d. Combine manufacturing to reach a profitable volume of activity.

AACSB Reflective thinking, Group dynamics

PTS: 1

5. The anchor partner in a strategic alliance refers to
a. A partner that is very stable and anchors the relationship.
b. The strongest partner in the relationship.
c. The partner who initiates the relationship.
d. A partner that fails to deliver their share of funding.

AACSB Reflective thinking, Group dynamics

PTS: 1

6. The best level of dependency recommended for a strategic alliance is
a. Balanced.
b. Home country dominated.
c. Host country dominated.
d. It does not matter if there are more than two companies.

AACSB Reflective thinking, Group dynamics

PTS: 1

7. The elephant-and-the-ant complex refers to
a. Difficulties that come with two different size organizations in a strategic alliance.
b. Problems that arise when one side feels inferior to the other.
c. Strategic alliances between developed and developing countries.
d. An unbalanced management structure.

AACSB Reflective thinking, Group dynamics

PTS: 1

8. An agreement not legally binding between companies to cooperate on any value-chain activity is a (an)
a. Formal international cooperative alliance.
b. International joint venture.
c. Informal international joint venture.
d. International cooperative alliance.

AACSB Reflective thinking, Group dynamics

PTS: 1

9. When a large number of companies form a joint venture, the international joint venture is a
a. Multi-partner joint venture.
b. Consortium.
c. Informal cooperative alliance.
d. Equity joint venture.

AACSB Reflective thinking, Group dynamics

PTS: 1

10. All of the following are typically part of a negotiated joint venture agreement EXCEPT
a. Management loyalty.
b. Equity contributions.
c. Provisions for dissolving the IJV.
d. Contracts for the IJV.

AACSB Reflective thinking, Group dynamics

PTS: 1

11. In the split control management structure
a. Companies share all decision making.
b. Managers of the strategic alliance split from and act independently from their parent companies.
c. Partners divide decision making control by functional areas.
d. Each company takes a turn providing the operational managers.

AACSB Reflective thinking, Group dynamics

PTS: 1

12. In the independent control management structure
a. Strategic alliance managers have nearly complete autonomy for operational decisions.
b. Partners act independently of each other except when necessary.
c. Partners focus only on their special areas of expertise.
d. None of the above

AACSB Reflective thinking, Group dynamics

PTS: 1

13. When partners share strategic decision making but make decisions independently at the functional level (e.g., marketing, production), they are using which of the following management structures?
a. Dominant partner
b. Independent management structure
c. Rotating management
d. Split-control management structure

AACSB Reflective thinking, Group dynamics

PTS: 1

14. If partners have similar technologies or know-how and they contribute this knowledge equally to the alliance, they prefer
a. A shared management structure.
b. A split management structure.
c. A dominant management structure.
d. A rotating management structure.

AACSB Reflective thinking, Group dynamics

PTS: 1

15. Strategic alliance partners prefer a dominant management structure
a. If partners have similar technologies or know-how and they contribute this knowledge equally to the alliance.
b. If partners have different technologies or know-how and they contribute this knowledge equally to the alliance.
c. If partners have different technologies or know-how and they contribute this knowledge differently to the alliance.
d. If the alliance has more strategic importance to one partner.

AACSB Reflective thinking, Group dynamics

PTS: 1

16. Which management structure is popular in developing countries?
a. Dominant
b. Shared
c. Split
d. Rotating

AACSB Reflective thinking, Group dynamics

PTS: 1

17. As their management team gains more expertise, mature joint ventures move to what type of structure?
a. Independent
b. Interdependent
c. Local partner dominance
d. Shared

AACSB Reflective thinking, Group dynamics

PTS: 1

18. Equity in a strategic alliance implies
a. Labor skills.
b. Ownership.
c. Domination.
d. None of the above

AACSB Analytic, Group dynamics

PTS: 1

19. Suggested ways to build and sustain commitment in strategic alliances include
a. Go slowly.
b. Be the dominant partner.
c. Keep your goals secret so your partner does not get nervous about your intentions.
d. Use extensive written documentation.

AACSB Reflective thinking, Group dynamics

PTS: 1

20. When applied to a strategic alliance relationship, the concept of trust includes
a. Confidence that the partner will deliver.
b. Confidence that the partner will behave with good will.
c. Confidence that the partner will engage in fair exchange.
d. All of the above

AACSB Reflective thinking, Group dynamics

PTS: 1

21. The confidence that the partner will behave with goodwill and trust is
a. Commitment.
b. Credibility trust.
c. Benevolent trust.
d. Calculative commitment.

AACSB Reflective thinking, Group dynamics

PTS: 1

22. Trust in strategic alliance relationships
a. Usually builds in cycles.
b. Either exists at the beginning of the relationship or will never be there.
c. Can really only evolve with partners from similar cultures.
d. Can never exist in high technology relationships since the risk of losing the technology is too great.

AACSB Reflective thinking, Group dynamics

PTS: 1

23. In strategic alliance relationships, high levels of trust often
a. Retard organizational functioning due to excessive emotional reactions.
b. Cause excessive loyalty to the strategic alliance.
c. Are irrelevant if the strategic alliance is projected to have a high financial return.
d. Facilitate the exchange of tacit knowledge.

AACSB Reflective thinking, Group dynamics

PTS: 1

24. The best method of assessing strategic alliance performance is
a. Total sales revenue.
b. ROI.
c. ROA.
d. There is no one best method.

AACSB Reflective thinking, Group dynamics

PTS: 1

25. Indirect strategic benefits for entering a strategic alliance include
a. Immediate improved performance on profit ratios.
b. Learning a new market.
c. Developing management loyalty.
d. None of the above

AACSB Reflective thinking, Group dynamics

PTS: 1

26. __________ means that companies rely on each other to contribute to the relationship.
a. Shared management
b. Balanced management
c. The norm of reciprocity
d. Mutual dependency

AACSB Reflective thinking, Group dynamics

PTS: 1

27. Contracts for strategic alliances may include _____________ if the relationship dissolves before the negotiated time.
a. Penalties for early termination of the contract by each side
b. Restrictions on future business growth
c. A promise to try future joint ventures
d. All of the above

AACSB Reflective thinking, Group dynamics

PTS: 1

28. In dealing with cross-cultural communication in a strategic alliance, managers should expect
a. Communication difficulties to disappear when operational managers are fluent in each other’s language.
b. Slower communication and more errors.
c. No communication problems if all managers were educated in the US.
d. No communication difficulties if all parties agree on a common language of the strategic alliance.

AACSB Analytic, Group dynamics

PTS: 1

29. Understanding a new market and developing a new technology may be used as performance criteria for which of the following?
a. Organizational learning
b. Management processes
c. Competitive advantage
d. Commitment

AACSB Reflective thinking, Group dynamics

PTS: 1

30. Strategic complementarity in a strategic alliance means that
a. Both sides must have similar strategic objectives for the strategic alliance to succeed.
b. Objectives can be different if they are not in conflict.
c. Cultural differences must be dealt with first.
d. Parent companies must leave the strategic alliance management to develop their own strategic goals.

AACSB Reflective thinking, Group dynamics

PTS: 1

31. Which of the following type of strategic alliances allows the multinational to combine manufacturing or assembly activities to achieve a profitable volume of activity?
a. Operations alliances
b. Output alliances
c. Upstream-downstream alliances
d. Marketing alliances

AACSB Reflective thinking, Group dynamics

PTS: 1

32. All of the following are true about international joint venture (IJV) EXCEPT
a. An IJV is a separate legal entity owned by parent companies from different countries.
b. IJVs can have more than two partners.
c. IJVs require that companies have equal ownership to form the venture.
d. IJVs require legal contracts that bind partners.

AACSB Reflective thinking, Group dynamics

PTS: 1

33. If strategic alliance partners have different technologies or know-how and they contribute this knowledge equally, they often prefer
a. Shared management structure.
b. Dominant management structure.
c. Split management structure.
d. Rotating management structure.

AACSB Reflective thinking, Group dynamics

PTS: 1

34. The psychological identification with a relationship in a strategic alliance and the pride of association with the partner and the alliance is known as
a. Calculative commitment.
b. Credibility trust.
c. Benevolent trust.
d. Attitudinal commitment.

AACSB Reflective thinking, Group dynamics

PTS: 1

35. The confidence that a strategic alliance partner has the intent and ability to meet their obligations and make their promised contribution to a strategic alliance is known as
a. Credibility trust.
b. Benevolent trust.
c. Calculative trust.
d. Attitudinal trust.

AACSB Reflective thinking, Group dynamics

PTS: 1

36. According to the text, which of the following is NOT a key criterion used in picking an alliance partner?
a. Pick a partner who provides strategic complementarity.
b. Pick a partner who provides financial security.
c. Pick a partner who has complementary skills.
d. Pick a partner who provides the right level of mutual dependency.

AACSB Reflective thinking, Group dynamics

PTS: 1

37. According to the text, which of the following DOES NOT represent a form of strategic alliance?
a. Informal cooperative alliances
b. Formal cooperative alliances
c. International joint ventures
d. Informal partnerships

AACSB Reflective thinking, Group dynamics

PTS: 1

38. Which of the following statements regarding international joint ventures is FALSE?
a. International joint ventures usually have two or more partners.
b. International joint ventures are usually not legally binding.
c. International joint ventures with a large number of partners are known as consortiums.
d. Companies do not need equal ownership to form an international joint venture.

AACSB Reflective thinking, Group dynamics

PTS: 1

39. The confidence that a partner has the intent and ability to meet its obligations and make its promised contribution to the strategic alliance is known as
a. Calculative trust.
b. Calculative commitment.
c. Credibility trust.
d. Benevolent trust.

AACSB Reflective thinking, Group dynamics

PTS: 1

40. Which of the following describes the situation where companies stay in a strategic alliance despite strong evidence that the alliance won’t work?
a. Calculative commitment
b. Credibility commitment
c. Attitudinal commitment
d. Escalation of commitment

AACSB Reflective thinking, Group dynamics

PTS: 1

ESSAY

1. What are the characteristics of a good partner in a strategic alliance? Why do these partner traits help make a strategic alliance successful?

2. What are some of the common value chain links companies use to gain strategic benefits from alliances? Pick two of these links and describe some of the benefits partners gain from pursuing these links.

3. Under what conditions should a firm choose one of the various management structures available for a strategic alliance?

4. What are the different kinds of commitment needed in a strategic alliance? Explain.

5. What are some of the difficulties of assessing IJV or ICA performance? How do these differ for companies with different strategic goals?

6. What are the different management structures possible for strategic alliances? Pick two of these management structures and discuss when they are most appropriate.

7. Compare and contrast the three main types of strategic alliances.

8. Discuss some of the things multinational managers can do to build and sustain trust and commitment.

9. If an alliance fails to meet strategic goals, what two options do top managers have to choose from to resolve the situation? How can an alliance be improved?

Chapter 10 Multinational e-Commerce: Strategies and Structures

MULTIPLE CHOICE

1. Ebay is a prime example of which form of e-commerce?
a. Business to business transactions (B2B)
b. Business to consumer transactions (B2C)
c. Consumer to business transactions (C2B)
d. Consumer to consumer transactions (C2C)

AACSB Technology, Information technologies

PTS: 1

2. An Internet host that allows users to send encrypted data so that those outside the connection cannot see the information is a
a. A secure server.
b. An internet host.
c. A computer that has its own Internet Protocol address.
d. A computer that has its own World Wide Web address.

AACSB Technology, Information technologies

PTS: 1

3. Secure servers and internet hosts are two indicators of the
a. Internet infrastructure.
b. Web influence.
c. global presence of e-commerce.
d. Internet security.

AACSB Technology, Information technologies

PTS: 1

4. Traditional internet metrics do not quantify the use of new internet devices and features, including:
a. Smart phones.
b. Cloud-computing.
c. Social networking.
d. All of the above.

AACSB Technology, Information technologies

PTS: 1

5. Companies such as manufacturers that sell directly to consumers (Dell), and companies that provide online shipping services (FedEx, UPS) are all examples of which of the following?
a. Web customers
b. B2B
c. C2B
d. B2C

AACSB Technology, Information technologies

PTS: 1

6. Which of the following is NOT one of the necessary steps to ensure a successful E-Commerce strategy?
a. Building on current business models and experimenting with new e-commerce models
b. Allocating resources to the e-commerce business
c. Making sure that the entire firm is prepared to embrace the e-commerce model
d. Training all upper level management in computer programming

AACSB Technology, Information technologies

PTS: 1

7. The brick and mortar part of the company refers to
a. The degree of interaction between traditional business operations and the company’s e-commerce system.
b. The company’s traditional business operations.
c. The company’s management information systems.
d. The extent of computer use in the company.

AACSB Technology, Information technologies

PTS: 1

8. Independent operations between the brick and mortar part of a company and its e-commerce system offer which of the following benefits?
a. The independent operation can move faster and be more entrepreneurial when freed from corporate bureaucracy and it can seek funding from deep pockets of venture capitalists.
b. The independent operation can benefit from cross-promotion of shared products, shared customer information, increased large-quantity purchase leverage, and economies of scale by using the same distribution channels.
c. The brick and mortar part of the company can transfer learning to the e-commerce system of the company.
d. Independent operations can facilitate synergy between the brick and mortar part and the e-commerce system.

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9. According to the text, which of the following is NOT one of the management challenges companies will face as they develop their e-commerce businesses?
a. Attracting, retaining, and developing employees in the e-commerce unit
b. Deciding which e-commerce functions to outsource
c. Finding funds to develop the e-commerce business
d. Finding ways to provide individuals with growth opportunities and job fulfillment to encourage employee retention in the e-commerce business

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10. Which of the following strategies is a pure e-business least likely to be concerned with when facing e-commerce challenges?
a. Developing information and management systems to respond to rapid growth
b. Attracting and retaining e-commerce-capable talent
c. Altering HR programs to suit the different skill requirements of e-commerce employees
d. Maintaining rapid decision making, creativity, innovation, and flexibility

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11. Which of the following statements regarding globalizing through the Internet is not true?
a. A company that globalizes through the Internet does not have to be concerned with the global-local dilemma.
b. A company that globalizes through the Internet still faces the same challenges that a brick and mortar company faces.
c. A company that globalizes through the internet must still address the traditional problems of multinational business (i.e., currencies, local laws, infrastructure for delivery).
d. A company that globalizes through the Internet must still decide whether to go global or to require localization to national or regional levels.

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12. According to the text, which of the following areas is not one of the areas that e-commerce companies work in?
a. Moving bits or computerized information
b. Moving money in payment flows
c. Providing Internet services
d. Moving physical products

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13. Which of the following businesses poses the highest degree of difficulty in e-commerce?
a. Portals and infomediaries
b. Businesses such as Travelocity, and those that sell digital music, and software
c. Businesses that rely on a physical infrastructure
d. Brick and mortar companies

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14. According to the text, the degree of difficulty in conducting global e-commerce businesses is primarily dependent on
a. The financial requirements.
b. The availability of management talent.
c. The infrastructure requirements.
d. The telecommunications infrastructure requirements.

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15. Which of the following types of companies are more likely to face challenges when they decide to enter the international market through the Internet?
a. Large multinational firms that already have an existing global presence.
b. Large multinationals firms that already have existing international operations.
c. Smaller firms and firms new to international commerce.
d. Small firms that already have an existing global presence.

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16. The major opportunities of e-commerce globalization include all of the following EXCEPT
a. Cost reduction.
b. Efficiencies.
c. Speed of access and convenience.
d. Access to new sources of financing.

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17. Which of the following is NOT one of the major threats to e-commerce globalization?
a. Cost of site construction, maintenance and upgrades
b. Cost of training in top managers in computer programming
c. Easily copied e-commerce models
d. Traditional cross-border transaction and other cross-cultural complexities

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18. According to the text, which of the following is NOT one of the factors to take in consideration when picking a country to start an e-business?
a. Internet population of at least 5%
b. Countries with market inefficiencies, such as formerly state-controlled markets
c. Countries that participates in at least one free trade agreement
d. Countries that have remarkable education systems

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19. According to the text, where is the greatest potential for e-commerce businesses?
a. North America
b. The European Union
c. South America
d. Asia

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20. Which of the following statements does not accurately describe the most likely form of organizing a multinational e-business?
a. A multinational e-business is three-tiered mixing global and local functions.
b. Corporate headquarters of the business provides the vision, strategy and leadership that drive the marketing of products worldwide.
c. Local subsidiaries of the business take charge of the functions better done locally in each country.
d. Corporate headquarters of the business provides the vision, strategy and leadership and also takes charge of the local strategies in each country.

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21. Which of the following is not one of the necessary electronic capabilities required for successful online presence?
a. Software to process pricing in multiple currencies
b. Ability to provide support in English in the various service centers
c. Systems that check regulatory compliance with local and international laws
d. Fraud protection

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22. E-commerce enablers are
a. Software that provide electronic payment models in addition to credit cards.
b. Systems that calculate and show purchase information on international shipping, duties, and local taxes such as VAT.
c. Companies that provide services and software that translate Web sites, calculate shipping, value-added taxes, duties, and other charges unique to each country.
d. Equity partners in multinational businesses.

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23. Multinational e-commerce enablers exist because
a. Many companies including very large ones, do not have the internal resources or abilities to conduct all e-commerce functions.
b. There is a shortage of employees with e-commerce skills.
c. It is extremely difficult for a brick and mortar company to develop an e-commerce strategy.
d. It is more beneficial to have a strategic partner when conducting multinational e-commerce.

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24. MNC’s face rising pressures to maintain the __________ of their customers.
a. Data
b. Privacy
c. Support
d. Repeat business

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25. Cost reduction, technology and efficiencies are considered to be the ________ of e-commerce.
a. Attractions
b. Challenges
c. Deterrents
d. Keys

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26. Which of the following is not true regarding e-commerce?
a. Refers to the selling of goods and services over the Internet
b. Includes products that are delivered offline such as UPS shipping a book purchased through Amazon.com
c. Does not include goods and services delivered online, such as downloaded computer software
d. Includes goods and services delivered online, such as downloaded computer software

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27. Which of the following statements is NOT true regarding Business-to-Business transactions (B2B)?
a. B2B is not as important as business-to-consumer (B2C) e-commerce businesses.
b. B2B allows instant information sharing between business customers and suppliers.
c. B2B allows suppliers to know what their customers want and allows businesses to know price, availability and product characteristics immediately.
d. B2B transactions make up more than 70 % of all current e-commerce business.

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28. Channel conflicts, cost of site construction and maintenance are considered to be _____ of e-commerce.
a. Attractions
b. Challenges or deterrents
c. Linking services
d. Supporting software

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29. Which of the following services is not provided by e-commerce enablers?
a. Services and software that translate Websites
b. Software that calculate shipping, value-added, and duties
c. Receiving customers purchased goods and storing, packaging, and shipping to the customer
d. Training programs to understand the local culture

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30. E-commerce potential is substantial in South America because
a. Of the Mercosur trade group.
b. Of trade with the U.S.
c. Because of the demographic characteristics.
d. Of the ASEAN trade group.

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31. Price comparison websites which searches online stores around the world to provide price comparisons and shipping and delivery information represents which form of e-commerce?
a. B2B (business-to-business)
b. B2C (business-to-consumer)
c. C2C (consumer-to-consumer)
d. C2B (consumer-to-business)

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32. Which of the following is NOT one of the ways to modify a website to make it global?
a. All company websites should first show the corporate website in the home country.
b. Provide a prominent list of languages used by the company’s web site
c. Provide the firm’s privacy statements in all local languages
d. Provide a culturally-sensitive website

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33. Which of the following is NOT a benefit of integrated brick-and-mortar and internet businesses?
a. The integrated operation can benefit from shared customer information.
b. The integrated operation can move faster and be more entrepreneurial.
c. The integrated operation can benefit from cross-promotion of shared products.
d. The integrated operation can benefit from economies of scale by using the small distribution channels.

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34. Which of the following does NOT represent a necessary component of the ideal multinational e-business?
a. Corporate headquarters which represents the global core in charge of providing a common vision and strategy
b. Managers at headquarters having worldwide responsibility for their shared functional areas responsibility
c. Local subsidiaries which actually deliver the goods and also taking charge of functions best done locally
d. All of the above are necessary aspects of the multinational e-business

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35. The internet has enabled the emergence of a new form of multinational, known as
a. Internet Service Providers.
b. Virtual enablers.
c. Internet businesses.
d. Born-globals.

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36. The retail sale of toys from the Wal-Mart website represents which form of transaction?
a. B2C
b. B2B
c. C2C
d. C2B

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37. Having systems in place to ensure that collected information is accurate and reliable represents which form of information security?
a. Confidentiality
b. Availability
c. Integrity
d. Authentication

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38. Confidentiality
a. Is ensuring that collected information is available to authorized users.
b. Is ensuring that collected private information is protected and safeguarded.
c. Is ensuring the privacy of online shoppers.
d. Is ensuring that systems are in place to ensure that only legitimate individuals are using systems.

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39. Southeast Asian countries represent opportunities for e-commerce growth due to
a. Spanish language websites.
b. Membership in ASEAN.
c. Global demand.
d. Internet economy.

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40. A new trend is that multinationals are using _______________ to their advantage.
a. Tall hierarchical web structures
b. Tacit knowledge
c. User Generated Content
d. None of the above

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ESSAY

1. What is e-commerce? What are the main types of e-commerce transactions? Discuss some of the reasons why B2B transactions make up a significant percentage of current e-commerce business?

2. Discuss some of the basic steps to building a successful e-commerce strategy.

3. What is a brick and mortar part of a company? What are some benefits of integrating the brick and mortar part of an organization with their Internet business? Why do some companies such as Barnes and Nobles still choose to have their Internet division operate independently from their brick and mortar part?

4. What are some of the major factors a company needs to take into consideration when setting up a global e-business? Why do companies with already established international brick and mortar units have an advantage in setting up global e-business compared to firms with no international presence?

5. What are some of the major factors to take into consideration when picking a country for setting up an e-commerce business? Why do trading blocks such as Mercosur, ASEAN, and the European Union present significant potential for e-commerce businesses?

6. Discuss the three-tiered ideal organizational structure of a multinational e-corporation. What are some of the essential functions served by the headquarters of the multinational e-corporation? Why should company headquarters not be responsible for local strategies?

7. What are e-commerce enablers? Why are e-commerce enablers becoming increasingly popular? Discuss some of the essential services provided by e-commerce enablers.

8. Discuss some of the technical capabilities that are needed for multinational e-commerce.

9. Discuss some of the major problems companies face when they try to globalize their Web sites. What can companies do to face these challenges?

10. What is e-commerce security? Discuss the four key aspects of information security. What can a multinational do to ensure that its e-commerce system is secure?

Chapter 11 International Human Resource Management

MULTIPLE CHOICE

1. The process by which companies choose people to fill vacant position is
a. Recruitment.
b. Compensation.
c. Selection.
d. Training and development.

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2. Inpatriates are
a. Employees who come from a different country where he/she is working.
b. Expatriate workers who come from neither the host nor the home country.
c. Local workers who come from the host country where the unit is located.
d. Employees from foreign country who work in the country where the parent company is located.

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3. Home country nationals are
a. Expatriate employees who come from the parent’s home country.
b. Employees who come from a different country where he/she is working.
c. Expatriate employees which come from the parent’s home country.
d. Employees from foreign country who work in the country where the host company is located.

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4. Expatriates are
a. Local workers who come from the host country where the unit is located.
b. Employees who come from a different country from where he or she is working.
c. The more talented local managers.
d. None of the above

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5. Expatriate workers who come from neither the host nor home country are
a. Host country nationals.
b. Parent country nationals.
c. Neither country nationals.
d. Third country nationals.

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6. One reason for US expatriate managers failure is
a. Personality of the manager.
b. Lack of technical proficiency.
c. Lack of motivation.
d. All of the above choices.

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7. All of the following are benefits that companies obtain by using expatriates EXCEPT
a. Receiving important strategic information.
b. Increased coordination and control of international operations.
c. Timely information on the local markets.
d. Reduced turnover for key international managers.

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8. All of the following are benefits of international assignments EXCEPT
a. International assignments help managers acquire skills necessary to develop successful strategies in a global context.
b. Expatriate assignments help a company coordinate and control operations dispersed geographically and culturally.
c. International assignments provide companies access to preferential quotas and duties.
d. Global assignments provide important strategic information.

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9. International cadre are
a. A group of managers who specialize in international careers.
b. Managers who are hired on a temporary basis to solve international problems.
c. Experts on international operations who work as part of the headquarters staff.
d. A group in charge of training managers for expatriate assignments.

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10. Key expatriate success factors include all of the following EXCEPT
a. Professional or technical skill.
b. Experience in at least two cultures different from the assignment country.
c. Stress tolerance.
d. Favorable family situation.

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11. A person with good relational abilities has
a. The capacity to adapt to strange situations.
b. The flexibility to modify their behavior.
c. A sensitivity to cultural norms and values.
d. All of the above

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12. Evidence on training for international assignments suggests
a. Cross-cultural training reduces expatriate failure rates.
b. Cross-cultural training makes people feel more comfortable but there are no bottom line effects on performance.
c. US firms invest the most in this activity.
d. It only beneficial for long term assignments.

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13. Which of the following is NOT true regarding low training rigor?
a. Low training rigor usually includes briefings concerning company operations.
b. Low training rigor usually lasts for a short period.
c. Low training rigor usually includes lectures and videos on the local culture.
d. Low training usually lasts over two months.

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14. Which of the following is NOT one of the issues that make expatriate performance appraisals difficult?
a. Unreliable data
b. Refusal of host company to provide performance information regarding expatriate
c. Time differences and distance separation
d. Complex and volatile environments

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15. Suggestions to improve expatriate performance appraisals include
a. Using the same standards as the home country to improve fairness.
b. Giving up on performance appraisal since they often fail in the international setting.
c. Evaluation only at the end of the assignment since it takes a long time to learn about another culture.
d. Using multiple evaluators with varying periods of evaluation.

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16. The main objective of the balance sheet approach to international compensation is
a. To match home and host county purchasing power.
b. To make sure you reward international managers for their hardship.
c. To save costs in inexpensive countries.
d. To provide headquarters’ accountants with consistent information on salaries.

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17. Adjusting wages to local lifestyles and costs of living refers to which expatriate compensation system?
a. The balance-sheet method
b. The host-based compensation system
c. The global pay system
d. The headquarters-based compensation system

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18. The use of worldwide job evaluations, performance appraisals methods, and salary scales to determine pay is the
a. The global pay system.
b. The balance sheet approach.
c. The multi-local pay system.
d. The headquarters-based system.

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19. Experts on repatriation suggest
a. That managers will experience no problems if they return to their home cultures.
b. Reverse culture shock can occur regarding national and organizational culture.
c. There are difficult problems with repatriation but few solutions at this time.
d. People may feel uncomfortable for a while but work performance will not suffer.

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20. Difficulties that managers face in coming back to their home countries and reconnecting with their home organizations is known as the
a. Repatriation problem.
b. Reverse culture shock.
c. Low home re-adaptation index.
d. Expatriation problem.

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21. According to the text, which of the following is NOT one of the strategies used to allow successful repatriation of expatriates?
a. Provide a strategic purpose for the repatriation
b. Allow the expatriate to return when he/she is ready to do so
c. Provide training and preparation for the return
d. Establish a team to aid the expatriate

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22. Studies of women expatriates suggest that all of the following statements are true about international assignments in traditional cultures EXCEPT
a. Women typically do not succeed in expatriate assignments.
b. Women have some challenges in international assignments.
c. Women have some advantages in international assignments.
d. Opportunities for women expatriates are expected to grow in global companies.

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23. The text suggests several strategies that US women may use to succeed in traditional cultures. These include
a. Emphasize nationality, not gender.
b. Develop close contact with local government officials.
c. Not being overly aggressive in negotiation.
d. Proving that women can also be successful at international assignments.

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24. All of the following explain why there may be more international assignments for women in the future EXCEPT
a. Legal and social pressures for equal opportunity in North America.
b. Acute shortage of men willing to take international assignments.
c. Globalization creates opportunities to hire skilled women from any country.
d. More federal funds to train women for international assignments.

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25. Companies with a global HRM orientation
a. Usually provide significant extra pay for expatriate assignments.
b. Evaluate their managers by headquarters’ country standards.
c. Focus primarily on language training as preparation for expatriate assignments.
d. Use similar pay and benefit packages for all international assignments.

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26. Companies with ethnocentric HRM orientations
a. Use similar pay and benefit packages worldwide.
b. Select home country nationals for key positions.
c. Emphasize extensive training in the company culture before allowing a manager to go international.
d. Often use international experience as a technical qualification for high level management.

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27. Host country nationals may have limited career development in a company with a (an)
a. Ethnocentric, Regio or polycentric HRM orientation.
b. Only an ethnocentric HRM orientation.
c. Regiocentric or global HRM orientation.
d. Only a polycentric HRM orientation.

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28. Using more local managers to reduce the costs of training expatriate managers is a benefit usually associated with
a. A global HRM orientation.
b. A polycentric or regiocentric HRM orientation.
c. An ethnocentric HRM orientation.
d. A geocentric orientation.

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29. Companies with a multi-local strategy are most likely to have a
a. A global HRM orientation.
b. A polycentric HRM orientation.
c. Either a ethnocentric or regiocentric HRM orientation.
d. A geocentric orientation.

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30. Extra money paid to expatriates for particularly difficult posting due to issues such as high risk or poor living conditions is known as
a. Foreign service premiums.
b. Hardship allowance.
c. Relocation allowances.
d. Home-leave allowances.

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31. Which of the following statements is NOT TRUE regarding women expatriates compared to male expatriates?
a. Women expatriates have more difficulty being taken seriously early in their careers.
b. Women expatriates have more pressures to balance work and family compared to male expatriates.
c. Women expatriates have poorer relational and communication skills than male expatriates.
d. Women expatriates have more pressures to worry about their spouses than male expatriates.

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32. Which of the following is NOT one of the strategies discussed in the text to help repatriation of expatriates?
a. Provide a strategic purpose for the repatriation
b. Establish a team to help with the repatriation
c. Provide support for the expatriate and family on reentry
d. Provide vacation to help the expatriate get readjusted at home

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33. The two aspects to consider when evaluating the possibility of hiring expatriates are the high cost and
a. Skills in multinational management.
b. High success rate.
c. High failure rate.
d. None of the above

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34. All of the following are possible steps that can be taken by multinationals to remove barriers faced by female expatriates EXCEPT
a. Provide opportunities for interpersonal networks with other female expatriates.
b. Provide mentors.
c. Identify and remove sources of barriers.
d. Provide more appropriate performance appraisal systems for female expatriates.

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35. International Human Resource Management
a. Is no different from domestic HRM.
b. Is the application of HRM to international settings.
c. Is the orientation to hiring international employees.
d. Is the selection and compensation of expatriates.

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36. Third-country nationals are
a. Workers who come from the host-country where the unit is located.
b. Foreign workers who work in a country where the parent company is located.
c. Workers who come from neither the host nor the host-country.
d. None of the above

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37. Employees who are sent on frequent but short-term international assignments are known as
a. Flexpatriates.
b. Inpatriates.
c. Shortpatriates.
d. Expatriates.

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38. Which of the following statements about flexpatriates is FALSE?
a. Flexpatriates are those workers who travel on short notice for shorter duration.
b. Flexpatriate assignments usually last longer than expatriate assignments.
c. Flexpatriates provide flexibility as the company can send someone on numerous and much shorter duration assignments.
d. All of the above are true.

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39. Which of the following best describes emotional intelligence, one of the factors key to the success of an expatriate?
a. The ability to adapt to new and strange situations
b. The motivation to accept international assignments
c. The ability to being aware of oneself and to understand and relate to others
d. None of the above

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40. Which of the following factors is not necessarily included in an expatriate’s compensation package?
a. Local market cost of living
b. Housing
c. Adjustments for taxes
d. All of the above are included in an expatriate’s compensation package

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ESSAY

1. Identify the components of HRM and describe how they differ for IHRM.

2. Describe the types of nationals employed by multinational firms. Explain when each type would be used.

3. Discuss and contrast the four IHRM orientations. Describe how each can support a multinational strategy.

4. Contrast the positive and negative issues for using short term flexpatriates and international cadre members as expatriate managers. Consider both the organization’s perspective and the career implications for the individual manager.

5. Discuss the options available for expatriate compensation. Consider how these options might be used for a transnational and a multidomestic company.

6. Discuss how multinational companies can deal with the repatriation problem. Why is it necessary to deal with this issue?

7. What are some advantages women have in expatriate positions? Discuss some challenges that are faced by women in international assignments.

8. Discuss any three of the key expatriate success factors and their implications for selection.

Chapter 12 HRM in the Local Context: Knowing When and How to Adapt

MULTIPLE CHOICE

1. Differences in HRM policies and practices among countries stem from
a. Education and training of the labor force.
b. Laws and cultural expectations for selection practices.
c. Laws and traditions regarding labor practices.
d. All of the above

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2. An enduring system of relationships among people, such as education or the political system represent which aspect of the national context of a country?
a. National culture
b. Business culture
c. Social institutions
d. Managerial culture

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3. An abundant level of iron ore deposits in a country represents which of the following?
a. Country institutions
b. Natural factor conditions
c. Induced factor conditions
d. Resource pool

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PTS: 1

4. Which recruitment strategy do US managers see as most effective?
a. Newspaper and online advertising
b. College or university recruiting
c. Employee referrals
d. Personal contacts

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PTS: 1

5. The US belief in the benefits of open and public advertising reflects the
a. US individualistic cultural values.
b. US preference for in-group members.
c. US collectivist cultural values.
d. US preference for hiring friends and relatives.

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6. All of the following are true about US selection practices EXCEPT
a. US selection practices focus on individual achievements and not on group affiliations.
b. US selection practices favor hiring of relatives and friends.
c. The aim of the typical US selection practice is to gather information of a candidate’s job qualifications.
d. US selection practices are governed by laws and regulations.

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7. Selection in collectivist cultures
a. Favors performance-related backgrounds and qualifications.
b. Is similar to US selection practices.
c. Gives preference to the in-group members.
d. Gives preference to individuals with technical skills.

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8. Managerial selection and recruitment in Korea and Japan are dominated by
a. High school and university ties.
b. Club membership.
c. Performance-related backgrounds and qualifications.
d. All of the above

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9. Backdoor recruitment in collectivist cultures may not always be used by foreign multinationals because
a. Such procedures will not work as well as newspaper advertisements.
b. The multinationals may not have access to the appropriate contacts.
c. It is almost always better to use expatriates in these situations.
d. They prefer to rely on internal job postings.

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10. The practice of recruiting friends or relatives of those already employed is which form of recruiting?
a. Front gate recruiting
b. Walk-ins
c. Backdoor recruiting
d. Internal recruiting

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11. All of the following are true about US training and development practices EXCEPT
a. The most popular training topics are management development and computer training.
b. Most training programs reach a majority of the workers.
c. Because of global competition, demand for training will increase.
d. There are increased pressures on businesses to supplement basic educational training.

AACSB Reflective thinking, HRM

PTS: 1

12. The dual-system in Germany refers to
a. The combination of selection and recruitment in one process.
b. The unification of management practices from Eastern and Western Germany.
c. The combination of in-house apprenticeship training with part-time vocational school training.
d. Academic preparation at the high school level.

AACSB Reflective thinking, HRM

PTS: 1

13. A study of compensation practices in ten countries revealed that
a. Pay incentives are important.
b. Pay should be contingent on group performance.
c. Incentives should be significant amount of pay.
d. All the above are true

AACSB Reflective thinking, HRM

PTS: 1

14. The Japanese system of life-time or permanent employment
a. Applies more to workers than to managers.
b. Is easier to implement in smaller Japanese companies.
c. Is likely to produce a satisfied and less motivated Japanese workforce.
d. Applies equally to men and women.

AACSB Analytic, HRM

PTS: 1

15. According to a study of ten countries on nine compensation practices
a. There was universal consensus on all nine as being necessary.
b. There was universal consensus on eight as being necessary.
c. There was universal consensus that seniority considerations are necessary.
d. None of the above are true

AACSB Reflective thinking, HRM

PTS: 1

16. All of the following are true about the US performance appraisal system EXCEPT
a. It represents cultural values that espouse links among individual rights, duties, and rewards.
b. It attempts to be rational, logical, and legal.
c. It focuses primarily on the ability to function well in groups.
d. Research shows that it works well in all national contexts.

AACSB Reflective thinking, HRM

PTS: 1

17. Which of the following is most true about the typical US compensation system?
a. Most companies take into account external and internal factors to determine compensation.
b. Most companies develop formal and systematic policies to determine compensation levels.
c. Raises in pay are determined mostly by merit.
d. All of the above are true.

AACSB Reflective thinking, HRM

PTS: 1

18. Which of the following describes one potential way a Japanese supervisor can communicate negative feedback for poor work performance to his/her subordinate?
a. By simply ignoring the subordinate
b. With formal appraisal systems
c. By discussing the poor performance openly
d. By providing the negative feedback in writing

AACSB Reflective thinking, HRM

PTS: 1

19. Japanese compensation systems base pay raises mostly on
a. Marital status and family size.
b. Seniority.
c. Merit.
d. Position.

AACSB Reflective thinking, HRM

PTS: 1

20. Patterns of labor relations in countries are affected by
a. Cultural factors.
b. Historical factors such as the level of technology development.
c. Ideological reasons.
d. All of the above

AACSB Reflective thinking, HRM

PTS: 1

21. Union membership density refers to
a. The number of unions in any country.
b. The proportion of workers who belong to unions in a country.
c. The proportion of white collar workers/professional who belong to unions in a country.
d. The proportion of unions to companies in a country.

AACSB Reflective thinking, HRM

PTS: 1

22. All of the following are true about unions in England, Germany, France, and the U.S. EXCEPT
a. British unions developed with strong government interference.
b. German unions developed in harmony with the government and corporations.
c. French unions started much later and developed more slowly than did British or German unions.
d. US union membership has declined significantly since the 1940s.

AACSB Reflective thinking, HRM

PTS: 1

23. An organization of all people from a company regardless of occupation or location is a (an)
a. Craft union.
b. Enterprise union.
c. Ideological union.
d. Industrial union.

AACSB Reflective thinking, HRM

PTS: 1

24. A craft union
a. Represents one occupational group in one company.
b. Represents all people in one organization regardless of occupation or location.
c. Represents all workers based on some particular ideology.
d. Represents one occupational group such as plumbers.

AACSB Reflective thinking, HRM

PTS: 1

25. A union representing one occupational group in one company is
a. An enterprise union.
b. A craft union.
c. A local union.
d. A trade union.

AACSB Reflective thinking, HRM

PTS: 1

26. Which of the following is FALSE about recruitment and selection processes in collectivist cultures?
a. Companies prefer to hire directly out of school.
b. There is a preference for family and friends.
c. Personal information is considered important for selection.
d. Technical skills are considered crucial for selection.

AACSB Reflective thinking, HRM

PTS: 1

27. The group of employees, found in Germany, that shares plant-level responsibility with managers over issues such as working conditions is
a. An enterprise union.
b. A craft union.
c. A works council.
d. An ideological union.

AACSB Reflective thinking, HRM

PTS: 1

28. Major components of the legal requirements for a US performance appraisal system include
a. Evaluations must relate clearly to the job.
b. Evaluations are not required when all workers are the same gender.
c. All testing must be quantitative.
d. Older workers need not have performance appraisals.

AACSB Reflective thinking, HRM

PTS: 1

29. In most collectivist cultures, performance appraisals
a. Follow similar patterns to the US legal requirements.
b. Are often communicated subtly, such as by a manager ignoring a worker.
c. Favor and open and honest dialogue regarding performance.
d. Are more formal than in individualistic cultures.

AACSB Reflective thinking, HRM

PTS: 1

30. The practice in Germany, whereby management surrenders a traditionally reserved share of control to workers refers to
a. Co-determination.
b. Co-selection.
c. Veto power.
d. Joint planning.

AACSB Reflective thinking, HRM

PTS: 1

31. All of the following statements regarding Induced-factor conditions resources are true EXCEPT
a. Induced-factor conditions resources arise from cultural and institutional pressures.
b. Good examples of induced factor conditions are the high cultural value placed on education in many Asian societies creating a well-trained workforce.
c. Induced-factor conditions include those resources that occur naturally such as coal and gas reserves.
d. All of the above are true.

AACSB Reflective thinking, HRM

PTS: 1

32. Which of the following is not one of the factors affecting national differences in human resource management as discussed in the text?
a. Types of jobs favored by applicants
b. Education and training of the labor pool
c. Laws and cultural expectations regarding fair wages and promotion criteria
d. All of the above are factors

AACSB Reflective thinking, HRM

PTS: 1

33. Which of the following is NOT one of the factors determining the resource pool of a country as discussed in the text?
a. The quantity, quality, and accessibility of raw material
b. The quantity, quality and cost of personnel available
c. The training and development system available
d. The cost and amount of capital available to firms

AACSB Reflective thinking, HRM

PTS: 1

34. Which of the following is NOT one of the recruitment steps?
a. Managers determine the jobs that are available.
b. Managers determine the types of skills and people that are necessary for these jobs.
c. Managers generate a pool of applicants for the job.
d. Managers choose a person who fits the job.

AACSB Reflective thinking, HRM

PTS: 1

35. All people in a particular industry, regardless of occupational group is most likely represented by
a. An enterprise union.
b. A local union.
c. A craft union.
d. An industry union.

AACSB Reflective thinking, HRM

PTS: 1

36. Which of the following statements regarding selection in collectivistic cultures is FALSE?
a. In selecting employees, employers prefer trustworthiness and loyalty.
b. Older male recruits are usually preferred because they can be easily molded to fit the company’s culture.
c. Selection often relies on referrals from family or friends.
d. All of the above are TRUE.

AACSB Reflective thinking, HRM

PTS: 1

37. The measure that considers the proportion of workers who belong to unions is known as
a. Union-membership scope.
b. Craft union density.
c. Union-membership density.
d. Trade union density.

AACSB Reflective thinking, HRM

PTS: 1

38. A union representing all workers belonging to one religious orientation in a company is known as
a. An ideological union.
b. A craft union.
c. A local union.
d. An ideological union.

AACSB Reflective thinking, HRM

PTS: 1

39. Which of the following statements about management development in the U.S. is false?
a. Management development in the U.S. is the responsibility of the firm rather than the individual.
b. U.S. companies can rely on senior-level managers to identify promising candidates for management development and training.
c. U.S. companies rely on direct assessment approaches such as assessment centers to identify individuals with managerial potential.
d. All of the above is true.

AACSB Reflective thinking, HRM

PTS: 1

40. Which of the following statements regarding union membership is FALSE?
a. Union membership in the U.S. has stayed the same over the past 30 years.
b. In many major industrialized countries, union membership is still greater than 50%.
c. South Africa has doubled in size in union membership.
d. Europe still has a high proportion of workers who are union members.

AACSB Reflective thinking, HRM

PTS: 1

ESSAY

1. Describe and discuss the major factors in the national context that affect a nation’s HRM practices.

2. What are some of the recruitment strategies used by U.S. companies? Why is open and public advertisements seen as the most effective recruitment strategies? Why would such strategies not work in more collectivist cultures?

3. Some U.S. politicians have called for the development of a German-type apprenticeship training system in the U.S. If you were a manager of a U.S. Fortune 500 multinational company, how would you respond to this proposal and why? What are the current challenges facing the German system now?

4. You have been given the assignment to set up a training program for first level managers in a formerly government-owned eastern European company. How would you go about developing a curriculum? Why?

5. Compare and contrast the appraisal and compensation systems in the U.S. and more collectivist culture nations. Discuss legal and cultural problems that multinational managers might face using a collectivist approach to these systems in the U.S. and using a U.S. approach in more collectivist cultures.

6. Contrast the different types of unions and discuss the challenges each type may pose to a multinational manager.

7. Define and describe union membership density as it has been historically and is now. Why is it important to multinational managers?

8. How is feedback on performance given in collectivist societies, especially for managers?

Chapter 13 International Negotiation and Cross-Cultural Communication

MULTIPLE CHOICE

1. International negotiation
a. Is the process of making business deals across national and cultural boundaries.
b. Is less complex than domestic negotiation.
c. Can be successful regardless of ease of communication.
d. All of the above

AACSB Communication, Leadership principles

PTS: 1

2. All of the following are true about international negotiation EXCEPT
a. International negotiations are more complex than domestic negotiations.
b. Differences in national cultures and differences in political, legal, and economic systems often separate potential business partners.
c. Most successful international negotiators use their home country negotiation styles.
d. All of the above are true.

AACSB Communication, Leadership principles

PTS: 1

3. The Whorf hypothesis
a. Suggests that language determines the nature of culture.
b. Suggests that nonverbal communication determines cultural patterns.
c. Culture comes first and requires the development of certain concepts and thus certain words.
d. None of the above

AACSB Communication, Leadership principles

PTS: 1

4. High context languages
a. Are languages in which people state things directly and explicitly.
b. Include most northern European languages including German, English, and the Scandinavian languages.
c. Are languages in which people state things indirectly and implicitly.
d. Are languages where the words provide most of the meaning.

AACSB Communication, Leadership principles

PTS: 1

5. Languages in which people state things directly and explicitly where the words provide most of the meaning are
a. Moral languages.
b. High context languages.
c. Low context languages.
d. None of the above

AACSB Communication, Leadership principles

PTS: 1

6. Which of the following statements is true regarding high context languages?
a. Most Northern European languages, including German, English, and the Scandinavian languages are high context languages.
b. Words provide most of the meaning in high context languages.
c. In high context languages, what is left unsaid is often as important as what is said.
d. All of the above are true.

AACSB Communication, Leadership principles

PTS: 1

7. The degree of formal communication refers to
a. Whether people speak directly or indirectly.
b. Communication without words.
c. Communication through formal body movements.
d. None of the above

AACSB Communication, Leadership principles

PTS: 1

8. Nonverbal communication
a. Is part of face-to-face communication.
b. Occurs through such things as body posture, facial expression, hand gestures, and the use of personal space.
c. May also create (purposefully or not) situations that make a negotiator uncomfortable.
d. All of the above

AACSB Communication, Leadership principles

PTS: 1

9. Kinesics is
a. Communicating through body movements.
b. A form of verbal communication.
c. Focuses on how people use space to communicate.
d. The type of touching that is deemed appropriate in different cultures.

AACSB Communication, Leadership principles

PTS: 1

10. Proxemics
a. Refers to the use of body movements to communicate.
b. Represents the degree of formality in communication styles.
c. Means communicating with and without words.
d. Focuses on how people use space to communicate.

AACSB Communication, Leadership principles

PTS: 1

11. Touch
a. Is related to proxemics and is a basic form of human interaction.
b. Refers to communication through body movements.
c. Represents the degree of directness in communication.
d. Is similar to kinesics.

AACSB Communication, Leadership principles

PTS: 1

12. Attribution
a. Is the process by which we interpret the meaning and intent of spoken words or nonverbal exchanges.
b. Is communication through body movements.
c. Focuses on how people use space to communicate.
d. A form of verbal communication.

AACSB Communication, Leadership principles

PTS: 1

13. When communicating with nonnative speakers, which of the following would make communication harder and less accurate?
a. Strictly following basic rules of grammar
b. Using words that have numerous alternative meanings
c. Using slang
d. Using most common words with their most common meanings

AACSB Communication, Leadership principles

PTS: 1

14. Gathering of extensive information on the negotiation issues, on the setting in which the negotiation will take place, and on the firm and people involved occurs in which stage of the steps in international negotiation?
a. Preparation
b. Building the relationship
c. Persuasion
d. Concession

AACSB Communication, Leadership principles

PTS: 1

15. In the relationship building stage of the International Negotiation Process
a. The negotiator focuses seriously on business issues.
b. Usually takes place at the formal negotiation place.
c. Is not as important as the other steps.
d. None of the above

AACSB Communication, Leadership principles

PTS: 1

16. All of the following are true about the steps in the Negotiation Process EXCEPT
a. Although each international negotiation is unique and may combine two or more steps or repeat some, the negotiation process involves five steps leading to the final step, an agreement.
b. The negotiation steps include preparation, building the relationship, exchanging information and the first offer, persuasion, and the agreement.
c. Most experts agree that the process of international negotiation includes several steps.
d. All of the above are true.

AACSB Communication, Leadership principles

PTS: 1

17. At the __________ stage in the negotiation, both parties exchange the specifics of their needs for the agreement.
a. Exchanging Information and the First Offer
b. Building the relationship
c. Persuasion
d. Concession

AACSB Communication, Leadership principles

PTS: 1

18. All of the following are true about the Exchanging Information and the First Offer Step of the International Negotiation process EXCEPT
a. Both parties exchange information on their needs for the agreement.
b. Parties exchange information that is task-related.
c. Both sides usually present their final offer.
d. Both sides present offers that often differ from what they hope to achieve eventually.

AACSB Communication, Leadership principles

PTS: 1

19. In the _____ stage, each side in the negotiation attempts to get the other side to agree to its position.
a. Exchanging Information and the First Offer
b. Building the relationship
c. Persuasion
d. Concession

AACSB Communication, Leadership principles

PTS: 1

20. All of the following is true about the persuasion stage EXCEPT
a. Each side in the negotiation attempts to get the other side to agree to its position.
b. It is the heart of the negotiation processes.
c. Numerous tactics are available to international negotiators to persuade the other side.
d. The emphasis and mix of tactics do not vary by the cultural background of the negotiators.

AACSB Communication, Leadership principles

PTS: 1

21. Dirty Tricks in International Negotiations refer to
a. The most common tactics in international negotiations that people use to gain an upper hand.
b. Negotiation tactics that pressure opponents to accept unfair or undesirable agreements or concessions.
c. Face-to-face communication that is not oral.
d. None of the above

AACSB Communication, Leadership principles

PTS: 1

22. Deliberate deception, one example among some common ploys in international negotiations, refers to
a. Negotiators presenting flagrant untruths either in the facts they present or in their intentions for the negotiation.
b. Negotiators waiting to the last minute before the international negotiation team plans to go home.
c. Negotiators making an agreement then reveal that it must be approved by senior managers or the government.
d. One negotiator acting agreeable and friendly while his or her partner makes outrageous or unreasonable demands.

AACSB Communication, Leadership principles

PTS: 1

23. Negotiators who make an agreement and then reveal that it must be approved by senior managers or the government is an example of which type of dirty trick?
a. Escalating authority
b. Good guy, bad guy routine
c. You are wealthy and we are poor
d. Old friends

AACSB Communication, Leadership principles

PTS: 1

24. If negotiators are using deliberate deception as a dirty tricks, the best way to deal with the deception is
a. Not to make any concessions.
b. To ignore the ploy and focus on the agreement.
c. To not reveal your negotiation plans.
d. To point out directly what you believe is happening.

AACSB Communication, Leadership principles

PTS: 1

25. All of the following are true about the final agreement EXCEPT
a. The final agreement is the signed contract, agreeable to all sides.
b. Successful negotiations do not necessarily result in the final agreement.
c. The final agreement must be consistent with the chosen legal system or systems.
d. All of the above are true.

AACSB Communication, Leadership principles

PTS: 1

26. The sequential approach to concession-making
a. Is very popular in Asian cultures.
b. Is similar to the holistic approach.
c. Implies that concession making begins only after all participants discuss all issues.
d. Implies that negotiators expect each side to give and take on individual issues in sequence.

AACSB Communication, Leadership principles

PTS: 1

27. All of the following are true about the holistic concession-making approach EXCEPT
a. Is very popular in Asian cultures.
b. Each side makes very few, if any, concession during discussions of each point in potential agreement.
c. Implies that concession making begins only after all participants discuss all issues.
d. Implies that negotiators expect each side to give and take on individual issues in sequence.

AACSB Communication, Leadership principles

PTS: 1

28. In competitive negotiation
a. Negotiators seek out mutually satisfactory ground that is beneficial that allows both companies to win.
b. Competitive negotiators view the negotiation as a win-win game.
c. Competitive negotiators use dirty tricks and any plot that leads to their advantage.
d. Competitive negotiators search for possible win situations where the outcome of the negotiation is mutually satisfactory to both sides.

AACSB Communication, Leadership principles

PTS: 1

29. __________ negotiators search for possible win-win situations where the outcome of the negotiation is mutually satisfactory to both sides.
a. Problem-solving
b. Concession-making
c. Competitive
d. None of the above

AACSB Communication, Leadership principles

PTS: 1

30. All of the following are personal characteristics of the successful international negotiator EXCEPT
a. Be a competitive negotiator.
b. Can tolerate ambiguous situations.
c. Has stamina, good sense of humor.
d. Is flexible, creative, curious, and can empathize.

AACSB Communication, Leadership principles

PTS: 1

31. Olfactics
a. Is the use of smells as a means of nonverbal communication.
b. Refers to communication through eye contact or gazing.
c. Communication through the use of space.
d. Communication through body contact.

AACSB Communication, Leadership principles

PTS: 1

32. Communication through eye contact or gaze is known as
a. Proxemics.
b. Haptics.
c. Oculesics.
d. Olfactics.

AACSB Communication, Leadership principles

PTS: 1

33. Which of the following is NOT one of the suggestions for proper use of interpreters?
a. Spend time with the interpreter so that he/she can understand your accent.
b. Insist on minimization of interruptions and have the interpreter translate after you end each statement.
c. Go over technical and other complex issues with your interpreter.
d. Request that your interpreter apologizes for your inability to speak the local language.

AACSB Communication, Leadership principles

PTS: 1

34. Which phase of the negotiation process consists of an evaluation of the success of the completed negotiation?
a. The post relationship building phase
b. The agreement phase
c. The post agreement phase
d. The performance feedback phase

AACSB Communication, Leadership principles

PTS: 1

35. Which one of the following is NOT one of the personal success characteristics of successful international negotiators as discussed in the text?
a. Tolerance of ambiguity and curiosity
b. Focus on achieving negotiation goals without making concessions
c. Flexibility, creativity, and sense of humor
d. All of the above are personal success characteristics

AACSB Communication, Leadership principles

PTS: 1

36. Haptics
a. Refers to communication through body contact.
b. Refers to communication through smell.
c. Refers to communication through eye contact.
d. None of the above

AACSB Communication, Leadership principles

PTS: 1

37. Which of the following represents one possible solution to the “Old Friends” dirty trick?
a. Ignore the ploy and focus on mutual benefits.
b. Keep a psychological distance that reflects the true nature of the relationship.
c. Walk out of negotiations.
d. Reveal when you plan to leave negotiations.

AACSB Communication, Leadership principles

PTS: 1

38. Which of the following regarding proxemics is FALSE?
a. Proxemics focuses on how people use space to communicate.
b. North Americans are more comfortable with a personal bubble of space of 20 inches.
c. Latin and Arab cultures prefer closer spacing than North Americans.
d. North Americans prefer closer spacing than the Latin and Arab cultures.

AACSB Communication, Leadership principles

PTS: 1

39. Which of the following statements regarding interpreters is FALSE?
a. The interpreter’s role is to provide a simultaneous translation of a foreign language while a person is speaking.
b. Good interpreters have the technical knowledge and vocabulary to deal with such details common in business transactions.
c. Interpreters are not needed if some of the negotiators can understand both languages.
d. All of the above are true.

AACSB Communication, Leadership principles

PTS: 1

40. Which of the following statements regarding formal communication is FALSE?
a. U.S. Americans have the highest degree of formal communication.
b. Compared to the U.S., most other business cultures acknowledge rank and titles when addressing each other.
c. There is more formality of dress for both genders for most other cultures compared to the U.S.
d. All of the above are true.

AACSB Communication, Leadership principles

PTS: 1

ESSAY

1. Discuss the steps in the negotiation process. Which step is at the heart of the process and why?

2. Compare and contrast the two basic negotiation strategies. Which would you prefer to use, and why?

3. What is the difference between a high- and a low-context language? Discuss some of the potential problems a person with a low-context language may face when negotiating with people from a high-context language.

4. Provide an example of how nonverbal negotiation tactics may be interpreted differently by people of varying cultural backgrounds.

5. What is the Whorf hypothesis? Explain.

6. Identify some cultural differences in body movements (kinesics). How might these influence a negotiation session?

7. Identify and describe some common dirty tricks in international negotiation. What can be done to counteract these dirty tricks?

8. Describe several forms of nonverbal communication. If you were a negotiator, how might you prepare for differences in these forms?

9. What are interpreters? What can managers do to ensure appropriate use of interpreters?

Chapter 14 Motivation in Multinational Companies

MULTIPLE CHOICE

1. People’s expectations from work (such as work providing necessary income or work providing satisfactory experiences) refer to
a. Functions of work.
b. Work centrality.
c. Importance of work.
d. Work motivation.

AACSB Reflective thinking, Motivation concepts

PTS: 1

2. Conclusions from the World Values Survey and the European Values Survey on functions of work reveal that
a. People across the world assign the same degree of importance to work functions.
b. People across the world rate income as the most important work function.
c. People from different nations do not assign the same magnitude of importance to work functions.
d. Workers saw the most important function of work as providing contact with other people.

AACSB Reflective thinking, Motivation concepts

PTS: 1

3. The importance of work refers to
a. how central work is in an individual’s life.
b. The degree of obligations to work in the life of an individual.
c. The functions that work plays in people’s lives.
d. People’s expectations from work.

AACSB Reflective thinking, Motivation concepts

PTS: 1

4. The concept of work centrality refers to
a. The reasons why people work.
b. The degree of importance of work in the life of an individual.
c. The functions that work plays in people’s lives.
d. Goals that people hope to achieve from working.

AACSB Reflective thinking, Motivation concepts

PTS: 1

5. All the following are true about work centrality EXCEPT
a. High levels of work centrality may lead to dedicated workers and more effective organizations.
b. Higher levels of work centrality closely match average number of hours worked in a country.
c. High levels of work centrality in Japan have been physically and psychologically stressing to middle-aged managers.
d. It represents the function of work in an organizational culture.

AACSB Reflective thinking, Motivation concepts

PTS: 1

6. All of the following statements about work in different countries are true EXCEPT
a. Regardless of country, money has the highest priority for why people work.
b. All people hope to receive certain benefits from work.
c. In some societies, work is very central and absorbs more of a person’s life.
d. People from different countries have different goals for their jobs.

AACSB Reflective thinking, Motivation concepts

PTS: 1

7. Motivation refers to
a. A feeling of deficit or lacking.
b. Goal-directed behaviors to satisfy human needs.
c. The use of work to satisfy many needs.
d. Consequences of a person’s behavior that discourages the behavior.

AACSB Reflective thinking, Motivation concepts

PTS: 1

8. Reactions to a person’s behavior that encourage the person to continue the behavior is
a. Goal-directed behavior.
b. Punishment.
c. Reinforcement.
d. Need.

AACSB Reflective thinking, Motivation concepts

PTS: 1

9. The national context affect motivation through all of the following EXCEPT
a. Cultural values and norms.
b. Social institutions that lead to different types of organizations.
c. The existence of strong organizational cultures.
d. National differences in work centrality.

AACSB Reflective thinking, Motivation concepts

PTS: 1

10. Need theories of motivation are based on the assumption that
a. Motivation is a function of the individual’s beliefs of what happens if one works hard.
b. Motivation is a result of the outcomes of one’s past behaviors.
c. Motivation is a function of why people work.
d. People can satisfy basic human needs in the work setting.

AACSB Reflective thinking, Motivation concepts

PTS: 1

11. All of the following statements about Maslow’s hierarchy of needs are true EXCEPT
a. People have six basic type of needs.
b. People have basic needs that follow a hierarchy from lower level to higher level needs.
c. People first seek to satisfy lower level needs and then move to higher level needs.
d. All of the above are true.

AACSB Reflective thinking, Motivation concepts

PTS: 1

12. All of the following statements are true about hygiene factors EXCEPT
a. Hygiene factors bring people to neutral states of motivation.
b. Hygiene factors include good benefits and good working conditions.
c. Hygiene factors can motivate workers similarly to motivating factors.
d. Hygiene factors include those characteristics that allow people to fulfill lower level needs.

AACSB Reflective thinking, Motivation concepts

PTS: 1

13. Which of the following motivation theory suggests that only some people have the need to win in competitive situation or to exceed excellence standards?
a. Expectancy theory
b. Motivator-hygiene theory
c. Achievement-motivation theory
d. Reinforcement theory

AACSB Reflective thinking, Motivation concepts

PTS: 1

14. When applying need theories in a cross-national context, managers should
a. Ignore the differences in needs between nations and apply the models uniformly.
b. Take into consideration the particular needs that people seek to satisfy in different countries.
c. Give the same magnitude of importance to work needs and apply these motivational tools.
d. Understand work centrality and then provide the same rewards to satisfy needs.

AACSB Reflective thinking, Motivation concepts

PTS: 1

15. Which types of motivation theories explain motivation arising from satisfaction of needs and values combined with an individual’s beliefs regarding the work environment?
a. Needs theories
b. Work centrality theories
c. Process and reinforcement theories
d. Work functions theories

AACSB Reflective thinking, Motivation concepts

PTS: 1

16. Expectancy theory proposes that
a. Motivation is solely determined by the satisfaction of needs.
b. Motivation is determined by the workers’ perceptions of fairness at work.
c. Motivation is a result of an individual’s preferences and belief that his/her effort will lead to some valued results.
d. Motivation is a purely automatic process.

AACSB Reflective thinking, Motivation concepts

PTS: 1

17. In a cross-national context, expectancy theory prescribes that managers
a. Should specify the hierarchy of needs of workers.
b. Identify and eliminate potential sources of inequity at work.
c. Identify valued outcomes and convince workers that their efforts will lead to these outcomes.
d. Punish workers for not achieving organizational goals.

AACSB Reflective thinking, Motivation concepts

PTS: 1

18. The theory based on the idea that employees compare their inputs and outcomes to other persons in the work setting to determine if they are being fairly treated is
a. Needs difference theory.
b. Expectancy theory.
c. Equity theory.
d. Reinforcement theory.

AACSB Reflective thinking, Motivation concepts

PTS: 1

19. All of the following statements are true EXCEPT
a. Equity norms prevail in individualistic cultures.
b. Equality norms prevail over equity norms in collectivist cultures.
c. Equity norms prevail in collectivist cultures.
d. All of the above are true.

AACSB Reflective thinking, Motivation concepts

PTS: 1

20. Principles of goal-setting theory include all of the following EXCEPT
a. Set clear and specific goals.
b. Provide incentives to achieve goals.
c. Give feedback on goal attainment.
d. Assign do-your-best types of goals.

AACSB Reflective thinking, Motivation concepts

PTS: 1

21. Setting goals for work groups is recommended in
a. Individualistic cultures.
b. Collectivist cultures.
c. High power distance cultures.
d. Goal setting for groups works equally well in all cultural settings.

AACSB Reflective thinking, Motivation concepts

PTS: 1

22. All of the following are true about the operant-conditioning model EXCEPT
a. Behavior is a function of its consequences.
b. People will stop behaviors that have unpleasant consequences.
c. People will continue behaviors they like irrespective of the nature of consequence.
d. People will continue behaviors that have pleasant consequences.

AACSB Reflective thinking, Motivation concepts

PTS: 1

23. Which motivation theory proposes that if a pleasurable consequence follows a behavior, then the behavior will continue and if an unpleasant consequence follows a behavior, the behavior will stop?
a. Needs theory
b. Expectance theory
c. Equity theory
d. Reinforcement theory

AACSB Reflective thinking, Motivation concepts

PTS: 1

24. Applying reinforcement at a cross-national level is challenging because
a. It is hard to identify the organizational rewards that can be used as reinforcers.
b. It is hard to understand how work values influence potential rewards.
c. It is hard to know which type of reinforcer is more applicable in different cultures.
d. All of the above

AACSB Reflective thinking, Motivation concepts

PTS: 1

25. All of the following statements about the US job characteristics model are true EXCEPT
a. The model suggests that work is more motivating when managers enrich core job characteristics.
b. The model suggests that enriching job characteristics is motivating for all types of individuals.
c. The model assumes that one critical state for motivation to occur is if the worker believes his/her work to be meaningful.
d. The model assumes that only some people will respond well to enriched jobs.

AACSB Reflective thinking, Motivation concepts

PTS: 1

26. The sociotechnical systems approach to job design
a. Gives priority to the technical efficiency of workers.
b. Attempts to mesh both modern technology and social needs of workers.
c. Has no major differences with the US job characteristics model.
d. Focuses on designing each worker’s task for job enrichment.

AACSB Reflective thinking, Motivation concepts

PTS: 1

27. A crucial difference between the US job characteristics model and the European STS approach is
a. The US model focuses on core job characteristics, while the European model focuses on tasks.
b. The US model focuses on individuals, while the European model focuses on work teams.
c. The US model focuses on work teams, while the European model focuses on individuals.
d. There are no differences between the US job characteristics model and the European STS approach.

AACSB Reflective thinking, Motivation concepts

PTS: 1

28. Social loafing
a. Is the social process of sharing.
b. Occurs when people prefer to work in groups.
c. Means that everyone’s work is easier in groups.
d. Occurs when people put out less effort when working in groups.

AACSB Reflective thinking, Motivation concepts

PTS: 1

29. Some of the detrimental effects of social loafing can be reduced if
a. Individuals are held responsible for performance.
b. Groups are held responsible for performance.
c. The group leader is held responsible for performance.
d. None of the above

AACSB Reflective thinking, Motivation concepts

PTS: 1

30. In individualistic cultures, performance drops off with the use of teamwork because
a. Of social loafing.
b. Workers believe that the group will make up any slack in their personal efforts.
c. Workers do not feel responsible for group outcomes.
d. All of the above

AACSB Reflective thinking, Motivation concepts

PTS: 1

31. A manager gives bonuses to high performing foreign employees hoping that they will continue performing at a high level. This manager is using which motivational principle?
a. Extinction
b. Goal-directed
c. Reinforcement
d. Punishment

AACSB Analytic, Motivation concepts

PTS: 1

32. An expatriate finds that one of his subordinates regularly jokes about a minority group in the country. She decides to ignore the jokes hoping that the subordinate will eventually stop such jokes. Which aspect of reinforcement theory is she using?
a. Avoidance
b. Extinction
c. Punishment
d. Operant conditioning

AACSB Analytic, Motivation concepts

PTS: 1

33. Hygiene factors include
a. The size of desks and color of offices.
b. Interesting tasks in the job.
c. Challenges in the job.
d. All of the above

AACSB Reflective thinking, Motivation concepts

PTS: 1

34. Which of the following is NOT one of the reasons discussed to explain why people engage in social loafing in individualistic cultures?
a. When working in groups, people in individualistic cultures often feel less pressure to work and less responsible for work outcomes.
b. Workers in groups in individualistic cultures often believe that the group will make up any slack in their personal efforts.
c. People in individualistic cultures often give priority to their own work over the group.
d. All of the above are reasons to explain social loafing in individualistic cultures.

AACSB Reflective thinking, Motivation concepts

PTS: 1

35. Which of the following theories is NOT considered as one of the needs theories?
a. Equity theory
b. Achievement motivation theory
c. Maslow’s hierarchy of needs
d. Motivator-hygiene theory

AACSB Reflective thinking, Motivation concepts

PTS: 1

36. The need to maximize personal achievement refers to which type of need in Maslow’s hierarchy of needs
a. Physiological needs.
b. Self esteem needs.
c. Self actualization needs.
d. Security needs.

AACSB Reflective thinking, Motivation concepts

PTS: 1

37. Esteem needs refer to
a. Basic survival needs such as food, water and shelter.
b. Safety and avoidance of pain and life-threatening situations.
c. Being loved and having friendship.
d. Focus on respect and feelings of self-worth.

AACSB Reflective thinking, Motivation concepts

PTS: 1

38. According to the text, those who are underrewarded are likely to
a. Return their rewards.
b. Reduce their inputs.
c. Increase their inputs.
d. None of the above

AACSB Reflective thinking, Motivation concepts

PTS: 1

39. According to equity theory, equity conscious people are most likely those
a. Who behave consistently with equity theory.
b. Who are more likely to tolerate situations where they are underrewarded.
c. Are more likely to experience satisfaction if underrewarded.
d. None of the above

AACSB Analytic, Motivation concepts

PTS: 1

40. Which of the following refers to the aspect of a job where the person can complete a whole piece of work from beginning to end?
a. Feedback
b. Task significance
c. Task variety
d. Task identity

AACSB Reflective thinking, Motivation concepts

PTS: 1

ESSAY

1. Why is it necessary to understand the meaning of work in different cultures before planning work motivation strategies?

2. Compare and contrast the need theories of motivation to the process theories of motivation. How can these theories be applied in multinational management?

3. Describe Vroom’s Expectancy Theory. What are some implications for multinational management?

4. What are the three major principles of allocating rewards? Discuss how each principle works. Why is equality preferred in more collectivistic cultures while individualistic cultures favor equity?

5. Discuss some of the implications of the operant-conditioning model for multinational management.

6. Explain why performance drops off when teams are used in individualistic cultures. Explain the significance of social loafing in the process. How can social loafing be reduced?

7. Compare and contrast the Job Diagnostics Design Approach to the European Sociotechnical Systems Approach to job design.

8. Discuss equity theory. What are the implications for multinationals?

Chapter 15 Leadership and Management Behavior in Multinational Companies

MULTIPLE CHOICE

1. All the following statements are true about leadership EXCEPT
a. Leadership is influencing group members to achieve organizational goals.
b. Excellent leaders motivate their employees to achieve more than minimal organizational requirements.
c. Companies can achieve success with or without good leaders.
d. Leading in a multinational company is an even greater challenge than in a domestic one.

AACSB Reflective thinking, Leadership principles

PTS: 1

2. Some of the characteristics of the new breed of global leaders include
a. The skills and abilities to interact with and manage people from the diverse cultural backgrounds that populate their multinational companies.
b. Sufficiently flexible to operate comfortably in pluralistic cultural environments.
c. Knows at least one foreign language and understands the complexities of interaction with people from other cultures.
d. All of the above

AACSB Reflective thinking, Leadership principles

PTS: 1

3. Trait models of leadership
a. Evolved from the debate regarding whether leaders are born or made.
b. Focuses on the behaviors leaders use to manage their employees.
c. Assumes that different styles and different leaders are more appropriate for different situations.
d. Includes Maslow’s Hierarchy of Needs theory.

AACSB Reflective thinking, Leadership principles

PTS: 1

4. The idea that leaders are born with unique characteristics that make them different form ordinary people is the
a. Task centered leadership theory.
b. A contingency theory of leadership.
c. The great-person theory.
d. The leadership behaviors theory.

AACSB Reflective thinking, Leadership principles

PTS: 1

5. All of the following are true about trait leadership theories EXCEPT
a. Using trait theory, one can conclude that successful business, political, religious, and military leaders were born with unique characteristics that made them quite different from ordinary people.
b. Leadership theorists identified an exact list of leadership traits.
c. The great person theory of leadership assumes that leaders are born.
d. All of the above are true.

AACSB Reflective thinking, Leadership principles

PTS: 1

6. The type of leadership that includes behaviors that focus on completing tasks by initiating structure is known as
a. Task-centered leadership.
b. Person-centered leadership.
c. Autocratic leadership.
d. Democratic leadership.

AACSB Reflective thinking, Leadership principles

PTS: 1

7. Person-centered leaders
a. Focus on completing tasks by initiating structure.
b. Give specific directions to subordinates so that the subordinates can feel comfortable completing tasks.
c. Show a concern for subordinates’ feelings and taking subordinates’ ideas into account.
d. Make all major decisions themselves.

AACSB Reflective thinking, Leadership principles

PTS: 1

8. Leaders who do not allow employees to share in the decision- making are
a. Democratic leaders.
b. Autocratic leaders.
c. Participative leaders.
d. Consultative leaders.

AACSB Reflective thinking, Leadership principles

PTS: 1

9. The leadership style that falls midway between autocratic and democratic styles is the
a. Person-centered leader.
b. Subordinate-oriented leader.
c. Consultative leader.
d. Task-oriented leader.

AACSB Reflective thinking, Leadership principles

PTS: 1

10. All of the following are true about the Japanese Performance-Maintenance (PM) theory of leadership EXCEPT
a. The Performance-Maintenance (PM) theory of leadership represents a Japanese perspective on leadership.
b. PM theory has two dimensions, the performance function (P) and the maintenance function (M), which are the basic aspects of the theory.
c. The maintenance function (M) is similar to task-centered leadership.
d. PM theory suggests that groups perform best when both P and M are present.

AACSB Reflective thinking, Leadership principles

PTS: 1

11. Contingency theories
a. Look for leadership behaviors that work in all countries.
b. Focus on which leadership traits or behaviors define excellent in Japan.
c. Assume that different styles and different leaders are more appropriate for different situations.
d. None of the above

AACSB Reflective thinking, Leadership principles

PTS: 1

12. All of the following are true about Fiedler’s Leadership Effectiveness theory EXCEPT
a. Fiedler proposed that managers tend to be either task or person-centered leaders.
b. The success of leadership styles depends on three characteristics of the work situation.
c. Effective leadership occurs when the leadership style matches the situation.
d. Task-centered leadership works best in mixed conditions.

AACSB Reflective thinking, Leadership principles

PTS: 1

13. Path-Goal Theory
a. Is a popular US contingency theory.
b. Identifies four types of leadership styles that a manager might choose depending on the situation.
c. Key contingency or situational factors that determine the choice of the best leadership styles are: the nature of the subordinates and the characteristics of the subordinates’ tasks.
d. All of the above

AACSB Reflective thinking, Leadership principles

PTS: 1

14. Which of the following is NOT one of the leadership styles of the path-goal theory of leadership?
a. Directive style
b. Supportive style
c. Task-oriented style
d. Participative style

AACSB Reflective thinking, Leadership principles

PTS: 1

15. Consulting with subordinates, asking for suggestions, encouraging participation in decision making, represent which leadership style in path-goal theory?
a. Directive style
b. Supportive style
c. Participative style
d. Achievement-oriented style

AACSB Reflective thinking, Leadership principles

PTS: 1

16. Key leadership suggestions based on path-goal theory include all of the following EXCEPT
a. When subordinates have high achievement needs, successful leaders adopt the achievement-oriented style.
b. When subordinates with have high social needs, they respond best to the supportive leadership style.
c. When the subordinate’s job is unstructured, the theory suggests using a supportive style.
d. When the subordinate’s job is highly structured, the theory suggests using instrumentality.

AACSB Reflective thinking, Leadership principles

PTS: 1

17. The National Context Contingency Model of Leadership
a. Assumes that successful leaders need not modify their behaviors or develop particular leadership traits to succeed in different nations.
b. Includes two contingencies: the characteristics of subordinates and the nature of the work setting.
c. Includes factors related to the national culture and social institutions.
d. Only B and C are correct

AACSB Reflective thinking, Leadership principles

PTS: 1

18. All of the following are true about leadership traits in various national settings EXCEPT
a. People from different cultural backgrounds prefer certain traits.
b. In Germany, a desired leadership trait is modesty.
c. In France, leaders are considered different based on social class distinctions between cadres and non-cadres.
d. In the US, assertiveness is valued as a leadership trait.

AACSB Reflective thinking, Leadership principles

PTS: 1

19. U.S. managers’ favored influence tactics include the following EXCEPT
a. Assertiveness.
b. Reasoning.
c. Aggressiveness.
d. Bargaining.

AACSB Reflective thinking, Leadership principles

PTS: 1

20. Building support for ideas and networking and using friendships involve the use of which influence tactics?
a. Assertiveness
b. Friendliness
c. Sanctioning
d. Coalitions

AACSB Reflective thinking, Leadership principles

PTS: 1

21. All of the following statements regarding subordinates expectations in different countries are true EXCEPT
a. In counties with high power distance values, including many of the Latin and Asian countries, subordinates expect autocratic leadership.
b. In low power distance countries, such as Sweden and Norway, subordinates expect the leader to be more like them.
c. Weak masculinity norms often lead to the acceptance of more authoritarian leadership.
d. Strong uncertainty avoidance norms may cause subordinates to expect the leader to provide more detail in directions.

AACSB Reflective thinking, Leadership principles

PTS: 1

22. When managers use rewards or punishment to influence their subordinates, they are engaging in
a. Rewards oriented leadership.
b. Transformational leadership.
c. Transactional leadership.
d. Charismatic leadership.

AACSB Reflective thinking, Leadership principles

PTS: 1

23. Transformational leadership
a. Means that managers use rewards or punishments to influence their subordinates.
b. Is similar to transactional leadership.
c. Succeeds because subordinates respond to the leader with high levels of performance, personal devotion, and excitement.
d. Is one leadership style of Fieldler’s leadership theory.

AACSB Reflective thinking, Leadership principles

PTS: 1

24. Behaviors and characteristics of transformation leaders include the all of the following EXCEPT
a. Articulates a vision.
b. Breaks from the status quo.
c. Uses rewards or punishments to influence subordinates.
d. Provides goals and a plan.

AACSB Reflective thinking, Leadership principles

PTS: 1

25. The attribution approach to leadership
a. Emphasizes the leader’s attributions regarding the causes of subordinates’ behaviors.
b. Focuses on using rewards or punishments to influence the attributes of subordinates.
c. Is similar to the trait approach, except that it focuses on a person’s attributes.
d. Represents one key aspect of transformational leadership.

AACSB Reflective thinking, Leadership principles

PTS: 1

26. Explaining a person’s behavior based on factors outside the person and beyond the person’s control (e.g., natural disasters, illness, faulty equipment, etc.) is a/an
a. Internal attribution.
b. External attribution.
c. Fundamental attribution error.
d. Attribution effect.

AACSB Reflective thinking, Leadership principles

PTS: 1

27. According to the text, if a leader perceives the cause of a subordinate’s behavior based on an internal attribution, then most leaders will
a. Tend to correct or reward the worker.
b. Modify the work environment.
c. Do nothing.
d. Use transformational leadership.

AACSB Reflective thinking, Leadership principles

PTS: 1

28. The fundamental attribution error
a. Is a tendency for managers to believe that most people act because of internal motivations.
b. Is a tendency for managers to believe more often that people behave in certain ways because of outside factors, such as poor working conditions.
c. Occurs most often in Asian cultures.
d. Concerns primarily external attributions.

AACSB Reflective thinking, Leadership principles

PTS: 1

29. According to the text, all of the following statements about leadership styles in different cultures are true EXCEPT
a. In high power distance countries, leaders generally behave more autocratically.
b. In high uncertainty avoidance national cultures both leaders and subordinates often feel more comfortable when the leader initiates structure.
c. In low uncertainty avoidance countries leaders tell subordinates exactly what to do.
d. In high power distance countries, person-centered leadership works best in large groups.

AACSB Reflective thinking, Leadership principles

PTS: 1

30. The recommended leadership style for a country low on power distance and low on uncertainty avoidance is
a. The democrat – supportive, participative, and achievement.
b. The master – directive and supportive.
c. The professional- directive, supportive, and participative.
d. The boss- directive.

AACSB Reflective thinking, Leadership principles

PTS: 1

31. Which of the following statements is NOT TRUE regarding leadership in various cultures?
a. In countries with high power distance, subordinates expect leaders to be more like them.
b. Strong masculinity norms often lead to the acceptance of more authoritarian leaders.
c. In countries with high uncertainty avoidance, subordinates expect detail and directions to perform their tasks.
d. All of the above are true.

AACSB Reflective thinking, Leadership principles

PTS: 1

32. A multinational manager discovers that his leadership style is more effective when he displays visible sign of status (e.g chauffeur driven cars) and he behaves as an authoritarian leader. The manager is most likely leading in which of the following cultures?
a. A feminine culture
b. A high uncertainty avoidance culture
c. A low power distance culture
d. A high power distance culture

AACSB Analytic, Leadership principles

PTS: 1

33. Which of the following is NOT one of the behaviors/characteristics of transformational leader as discussed in the text?
a. Takes risk
b. Demonstrates high ethical and moral standards
c. Articulates a vision
d. All of the above applies to transformational leaders

AACSB Reflective thinking, Leadership principles

PTS: 1

34. An expatriate finds that if she gives specific directions to her subordinates, productivity is much higher. Which leader behavior is she displaying?
a. Consultative leader behavior
b. Democratic leader behavior
c. Task-centered leader behavior
d. Person-centered leader behavior

AACSB Reflective thinking, Leadership principles

PTS: 1

35. According to the Global Leadership and Organizational Behavior Effectiveness (GLOBE) study, which of the following leadership styles represents the leader who is modest and has a compassionate orientation?
a. Team-oriented leader
b. Self-protective leader
c. Participative leader
d. None of the above

AACSB Reflective thinking, Leadership principles

PTS: 1

36. Which statement regarding fundamental attribution errors is true?
a. In Western nations, people tend to make external attributions.
b. In Eastern nations, people tend to make internal attributions.
c. In Western nations, people tend to make internal attributions.
d. In Eastern nations, people tend to make external attributions.

AACSB Reflective thinking, Leadership principles

PTS: 1

37. According to the Global Leadership and Organizational Behavior (GLOBE) studies, which of the following leadership style characterizes a leader who is self-centered, status conscious and procedural?
a. The autonomous leader
b. The participative leader
c. The humane style leader
d. The self-protective leader

AACSB Reflective thinking, Leadership principles

PTS: 1

38. Which of the following statements regarding the autonomous leader is FALSE according to the Global Leadership and Organizational Behavior (GLOBE) studies?
a. Autonomous leaders are independent, individualistic and unique.
b. Autonomous leaders act in self-interested manner.
c. Germanic and Eastern European countries have the highest scores on autonomous leadership.
d. Autonomous leadership is seen as very effective in most cultures.

AACSB Reflective thinking, Leadership principles

PTS: 1

39. Which of the following examples characterize the use of assertiveness as an influence tactics?
a. Example behaviors include being friendly and humble.
b. Example behaviors include using logical arguments.
c. Example behaviors include using threats and punishments.
d. Example behaviors include being forceful and directive.

AACSB Reflective thinking, Leadership principles

PTS: 1

40. The recommended leadership style for a country high on power distance and low on uncertainty avoidance is
a. The boss – directive.
b. The professional – directive, supportive and participative.
c. The master – directive and supportive.
d. The democrat – supportive and participative.

AACSB Reflective thinking, Leadership principles

PTS: 1

ESSAY

1. Define leadership. How might people from different national cultures define leadership? What are the implications of these definitions for multinational leaders working in these countries?

2. Pick a national culture with which you are familiar. For this culture, identify leadership traits and behaviors that would be detrimental to organizational effectiveness.

3. From the perspective of the subordinates, discuss why culturally inappropriate leadership behaviors might be de-motivating.

4. Why do multinational managers need to understand subordinate expectations in order to lead effectively? Which leadership style works the best in countries with high power distance? Why?

5. Discuss five preferred influence tactics that U.S. managers favor. Discuss how these tactics might work in other countries.

6. Discuss whether transformational leadership qualities are culture free. That is, are transformational leaders similar regardless of cultural background or are there different types of transformational leaders for each cultural group?

7. What is attribution theory? How can leaders use attribution theory to help them be good leaders?

8. What is the fundamental attribution error? What are some implications for leadership in multinationals?

9. Compare and contrast U.S. and Japanese perspectives on leadership behavior.