Test #2
Business
MGMT 370 – International
Chapter 2—Understanding Formal Institutions: Politics, Laws,
and Economics
1.
a.
b.
c.
d.
An institutional framework is made up of:
Regulatory and cognitive pillars
Formal and informal institutions
The political, economic, and legal systems of countries
None of these answers
2.
a.
b.
c.
d.
More than 80 countries practice:
Common law
Civil law
Theocratic law
Social democracy
3.
a.
b.
c.
d.
The world’s largest democracy is:
United States
China
India
Western Europe
Chapter #9 – Growing and Internationalizing the
Entrepreneurial Firm
4.
a.
b.
c.
d.
Small and medium-sized enterprises (SMEs) are defined as:
Firms with less than 20 employees
Firms with less than three departments
Firms with less than 200 employees
Firms with less than 500 employees
5. Small and medium-sized enterprises (SMEs) account for ____
percent of the number of firms worldwide.
a. 50
b. 95
c. 12
d. 80
MGMT 370 – International Business
6. An advocate of globalization of every industry would most closely
believe:
a. Firms need to enter culturally and institutionally close markets first and
then gradually move to use sophisticated strategies in distant markets.
b. Entrepreneurial firms need to internationalize rapidly in order to take
advantage of new opportunities.
c. New entrepreneurs will most likely "drown" in unfamiliar foreign waters.
d. Firms have a hard time overcoming substantial inertia because of their
domestic orientation.
Chapter 10 – Entering Foreign Markets
7. What determines the success or failure of businesses in foreign
market entries?
a. Overwhelming resources and capabilities to offset the liability of
foreignness.
b. Understanding the rules of the game governing competition in foreign
countries
c. Matching efforts in market entry and geographic diversification with
strategic goals.
d. All of these answers
8.
a.
b.
c.
d.
From a resource-based view, managers need to:
Develop more trained workers
Develop overwhelming capabilities to offset the liability of foreignness
Enter into more joint venture agreements
Outsource work to the lowest bidder
9.
a.
b.
c.
d.
Managers, to succeed, need to:
Match market entries with strategic goals
Develop alliances and acquisitions
Create dynamic and flexible structures.
All of these answers
MGMT 370 – International Business
Chapter 11—Making Alliances and Acquisitions Work
10. What is the main reason why formal institutions limit alliances
and acquisitions in the areas of formal market entry modes?
a. Many governments discourage acquisitions in order to establish localonly subsidiaries.
b. The liability of foreignness is guaranteed to make the alliances or
acquisitions fail.
c. The governments are unable to tax acquisitions by foreign firms.
d. The institutions do not limit the firms in regards to entry modes.
11. What is the problem behind a majority joint venture (JV)
partner always having both the higher equity and greater
management control?
a. Formal institutions and legal regulations prohibit it.
b. Joint ventures only exist when one party brings the equity and the other
brings the organization
c. The local minority party may resent the equity/management
dominance.
d. All of these answers
12. Which is the best strategy for dealing with conflict between
alliance partners?
a. Ignore conflict so as to not disrupt the relationship.
b. Address conflict directly, but do not let it get out of hand.
c. Terminate the alliance.
d. Alliance partners rarely get into conflicts, so they won’t need a strategy.
Chapter 12—Strategizing, Structuring, and Learning Around
the World
13. Which of the following is a leading problem with the
international division organizational structure?
a. It is not locally responsive.
b. It tends to be phased out first when a firm faces domestic challenges.
c. It is too locally responsive
d. The management team is duplicated, creating organizational confusion.
MGMT 370 – International Business
14. Which of the following best exemplifies how informal
institutions govern MNEs?
a. The US has few laws limiting US firms from creating subsidiaries
overseas, but there is often a vocal backlash from the public over
domestic job loss.
b. MNEs coming into the US have relatively few restrictions, as long as
they do not practice illegal dumping or price setting.
c. MNEs based in the US must advance quickly into foreign markets to
beat competitors and take care of opportunities, but these moves are
often slowed by legal regulations and entry barriers.
d. The laws governing MNEs based in the US are always changing.
15. Which of the following best describes the motive for
appointing a host country national as head manager in a MNE
subsidiary?
a. They are familiar with the intricate workings of the MNE.
b. They are independent of the local traditions and MNE so act as a neutral
leader.
c. They are familiar with the local informal institutions and market.
d. Host country nationals are never appointed as head manager.
16. Which of the following is NOT one of the major management
strategies?
a. Understand and be prepared to change the internal rules of the game
governing MNE management.
b. Understand and carefully control subsidiaries and minimize autonomous
and locally dependent teams.
c. Understand and master the external rules of the game governing MNEs
and home/host country environments.
d. Develop learning and innovation capabilities to leverage multinational
presence as an asset.
Chapter 14—Managing Corporate Social Responsibility Globally
17. Starbucks was most hesitant to purchase fair trade coffee
because:
a. It was sold at too high a price.
b. It was processed by sweat shops.
c. It might not meet its quality standards.
d. It was too hard to find enough producers.
MGMT 370 – International Business
18. What is defined as the ability to meet the needs of the present
without compromising the ability of future generations to meet their
needs?
a. Capitulation
b. Global sustainability
c. Corporate social responsibility
d. Social activism
19. Home Depot and Lowe’s both being able to monitor that their
lumber suppliers in Latin America are only working out of renewable
forests is an example of valuable capabilities but low ____.
a. Rarity
b. Imitability
c. Organization
d. Value
Basic Guide to Export (Chapters 3, 6, 8, 9, 12, 13, 17)
20. An example of a Non-Tariff barrier is:
A. VAT
B.
C.
D.
E.
Quota
Coup
20% Duty Rate
None of the above
21. The Export Classification Control Number (ECCN) is used to:
A. Determine shipping rates
B. Determine if you need an export/import license
C. Determine the tariff classifications
D. Determine VAT Rates
E. All of the above
22. A ______ is a contract between the owner of the goods and the
freight carrier.
A. Commercial Invoice
B. Bill of Lading
C. Force Majeure
D. Time Draft
E. None of the above
MGMT 370 – International Business
23. Which of the following is not a factor that affects a company’s
marketing decision to utilize an Adaption strategy?
A. Consumer income and ability to buy
B. Economies in production, R & D, Marketing
C. Cultural differences affecting produce and use
D. Technical standards
E. None of the above
24: Which of the following Incoterms refers to the seller’s price
quote for the goods, including the charge for delivery of the goods
alongside a vessel at the named port of export?
A. FAS
B. CIF
C. FOB
D. EXW
25. The Export Administration Regulations (EAR) provides assistance
to exporters on:
A. How to obtain an export license
B. How to classify goods under the HTS
C. How to import products to Cuba
D. How to use ITAR
E. All of the above
26. To encourage and facilitate international trade in more than 75
foreign countries, these designated areas and similar customsprivileged facilities are now in operation, usually in or near seaports
or airports. Panama has the second largest.
A.
B.
C.
D.
E.
Advocacy Centers
Foreign Trade Shows
Overseas Private Investment Corporations
Free Trade Zone
None of the above
MGMT 370 – International Business
27. ________ refers to a broad collection of rights relating to such
matters as works of authorship, which are protected under copyright
law; inventions, which are protected under patent law; marks, which
are protected by trademark law; as well as designs and trade
secrets.
A. Export License
B. United Aid Initiative
C. Intellectual Properties
D. Free Trade Agreements
E. None of the above
28. Under the _______it is unlawful for a U.S. person or firm (as well as
any officer, director, employee, or agent of a firm or any stockholder
acting on behalf of the firm) to offer, pay, or promise to pay (or to
authorize any such payment or promise) money or anything of value
to any foreign official (or foreign political party or candidate for
foreign political office) for the purpose of obtaining or retaining
business.
A. Antidivision Clause
B. Foreign Corrupt Practices Act (FCPA)
C. Antiboycott Regulations
D. NAFTA
E. None of the above
29. In order to qualify to receive duty free status under NAFTA, a
company must show that ____% of it value was derived in the US:
A. 33%
B. 51%
C. 67%
D. 91%
E. 100%
30. The _______ governs the export and re-export of items for reasons
of national security, non-proliferation, foreign policy, and short
supply. Failure to secure such a license will result in significant fines.
A.
C-PAT
B.
Department of Homeland Security
C.
EAR
D.
FTZ Act
E.
FTA’s
MGMT 370 – International Business
31. _______is a set of United States government regulations that
control the export and import of defense-related articles and services on
the United States Munitions List (USML)
D-Trade
Free Trade Zones
ITAR
VAT
HTS
32. _____ is the INCOTERM used to designate that seller quotes a
price for the goods, including all transportation, and miscellaneous
charges to the point of debarkation from the vessel. (The term is
used only for ocean shipments.)
A. FOB
B. FAS
C. CPT
D. CIF
E. CFR
33. The term ____ rule is defined as the export control of certain
technical information pertaining to the development, production and
use of such technology by non-US persons.
A. ITAR
B. EAR
C. Restricted Screening
D. Deemed
E. Sanctioned Party
34. To decide if a specific export requires an export license, one
needs to use the ______, this is used by the US Commerce Department
to catalog hardware, software, technical information and other such
items.
A. Schedule B
B. ECCN
C. ITAR
D. EAR
E. Control L
MGMT 370 – International Business
35. A ____
is the bill for the goods from the seller to the buyer;
used
by many governments to determine customs duties.
A. Bill of Lading
B. Commercial Invoice
C. Destination Control Statement
D. Consular invoice
E. Insurance certification
35. What are some considerations when choosing a freight
forwarder?
A. Company background, financial strength, experience
B. Areas of expertise, foreign market strengths, and services offered
C. Surface, air and ocean strengths
D. Import services
E. All of the above
37. The Export Management System (EMS) is a voluntary program to
ensure participants:
A. They will be paid
B. The shipment will be sent
C. Regulatory compliance
D. They will be audited.
E. All of the above
38. How do you need to know if you need an export license?
A. What you are exporting
B. Who you are exporting to
C. What is the end-user?
D. A & B above
E. All of the above
38. Before accepting an overseas transaction you should check:
A. Entity List
B. Denied persons list
C. Unverified List
D. A & C above
E. All of the above
MGMT 370 – International Business
40. Which of the following are The Export Administration Act’s (EAA)
penalties for violations of the Anti-boycott Regulations?
A. Imprisonment of up to five years
B. A fine of up to $50,000 or five times the value of the exports involved,
whichever is greater.
C. General denial of export privileges
D. B & C above
E. All of the above
