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International Business: The New Realities Introduction: What Is International Business?
1) International business is primarily carried out by individual companies.
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2) The globalization of markets refers to the growing independence and self-sufficiency of countries worldwide.
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3) International business today is predominantly the domain of large, multinational companies.
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Page Ref: 13
4) Exporting is an entry strategy involving the sale of products or services to customers located abroad.
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5) A country's economic assets are also known as factors of production.
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6) The two primary types of international investment are portfolio investment and foreign direct investment.
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7) Over the last few decades, export activity by nations has grown more quickly than has domestic production.
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8) In the past, international trade and investment activities were mainly conducted by companies that sold services.
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9) Services are the fastest growing sector in international trade.
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10) The level of government intervention in commercial activities is similar across most countries.
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11) Currency risk refers to the risk posed by adverse fluctuations in exchange rates.
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12) For internationalizing firms, the consequences of poor business management decisions are usually more costly when mistakes occur abroad than when they occur at home.
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13) MNEs with extensive international operations tend to focus mainly on downstream activities such as marketing in foreign countries.
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14) International business is primarily the domain of large, resourceful firms.
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15) Exporting is the most common foreign market entry strategy of the SME.
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16) For manufacturing companies, on a per-unit-of-output basis, high volumes of production are correlated with lower per-unit cost.
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17) Since the 1980s, emerging market countries have experienced substantial market liberalization and privatization.
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18) Firms that do not export tend to create jobs more quickly than do exporting firms.
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19) International business is defined as the performance of ________ activities by firms across national borders.
A) marketing and fiduciary
B) trade and investment
C) finance and operational
D) manufacturing and sales
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20) International business is also known as which of the following?
A) born global business
B) laissez-faire business
C) cross-border business
D) multi-hub business
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21) Which of the following best characterizes the development of international business?
A) It has existed in some form for centuries.
B) It first started in Europe.
C) It developed after the year 2000.
D) Its development has slowed in recent years.
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22) Globalization has helped increase all of the following except ________.
A) the variety of capital flows across national borders
B) the economic isolation of developing countries
C) the rate at which products are diffused worldwide
D) the volume of cross-border transactions
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23) Which of the following is another term for importing?
A) capital investment
B) supply side development
C) global sourcing
D) unilateral procurement
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24) Which of the following is subject to importing and exporting?
A) both finished products and intermediate goods
B) finished products but not intermediate goods
C) intermediate goods but not raw materials
D) raw materials and components, but not finished products
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25) ________ refers to the transfer of assets to another country or the acquisition of assets in that country.
A) International investment
B) International trade
C) Importing
D) Exporting
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26) Each of the following represents a factor of production except ________.
A) manufacturing infrastructure
B) technology
C) government regulations
D) managerial talent
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27) Which of the following would not be considered an example of foreign direct investment (FDI)?
A) cross-border purchase of a textile plant
B) cross-border purchase of stocks
C) purchase of capital assets of a foreign company
D) purchase of foreign land for business operations
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28) ________ is the total value of products and services produced in a country over the course of a year.
A) GDP
B) CAD
C) FDI
D) PPP
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29) Which of the following best explains why export growth has outpaced the growth of domestic production during the last few decades?
A) Both world exports and domestic production have grown significantly over the past 30 years.
B) The cost to import products is generally higher than the cost to produce domestic products.
C) Growth in gross domestic product in most countries has steadily increased since 1970.
D) Advanced economies now source many of their consumable products from low-cost manufacturing nations.
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30) Each of the following has contributed to the rapid integration of world economies except ________.
A) the growth of emerging market countries
B) the increase in trade barriers
C) advances in information technology
D) the liberalization of markets
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31) Which of the following types of risk is also known as political risk?
A) currency risk
B) cross-cultural risk
C) commercial risk
D) country risk
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32) Which of the following is not an example of a cross-cultural risk factor?
A) negotiation patterns
B) decision-making styles
C) costs of production
D) ethical practices
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33) Fluctuating exchange rates are an example of which of the following?
A) country risk
B) political risk
C) currency risk
D) cross-cultural risk
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34) Businesses that directly initiate and implement international business activity are known as ________.
A) focal firms
B) fiscal enterprises
C) fiduciary trusts
D) business affiliates
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Page Ref: 12
35) The largest multinational firms are found in each of the following industries except ________.
A) retailing
B) health care
C) automobiles
D) oil and gas
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Page Ref: 13
36) Which of the following countries hosts the greatest number of MNEs?
A) Germany
B) Japan
C) Netherlands
D) United States
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Page Ref: 14
37) Each of the following types of organizations is active in international business except ________.
A) MNE
B) SME
C) RND
D) NGO
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Page Ref: 12-15
38) Which of the following is an example of a new global challenger?
A) a firm from Russia that is rapidly growing in the communications industry
B) a U.S. non-profit that focuses on fundraising for children's health care
C) an MNE from France with large-scale operations across the globe
D) an SME from Canada that began international operations early in its development
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Page Ref: 13
39) Calexor is a telecommunications SME that has been highly successful despite its limited resources. Stakeholders attribute Calexor's success to its ability to serve niche markets. Which of the following, if true, would most strongly support the claim that Calexor's growth can be attributed to niche market sales?
A) Calexor developed an interest in serving niche markets through an R & D experiment.
B) Most of Calexor's sales are in specialty markets that larger competitors do not serve.
C) Calexor's sales in mainstream telecommunications markets have always been strong.
D) Calexor's growth soared after it entered its first overseas market and has continued to climb.
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Page Ref: 13
Skill: Critical Thinking
; Reflective thinking skills
40) The process of targeting and serving markets outside the home country is known as ________.
A) market diversification
B) competition intensity
C) reactive internationalization
D) trade protectionism
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Page Ref: 16
41) A U.S. shoe manufacturer is considering internationalizing to promote growth by diversifying its markets. Which of the following, if true, would most strongly support the claim that moving to France would help the company grow through market diversification?
A) Doing business in France would likely expose the company to new ideas for product innovation.
B) French women tend to purchase shoes more frequently than do French men.
C) French consumers represent a sizeable market that could significantly boost the company's sales.
D) Many of the company's U.S. customers have moved overseas to Europe.
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Page Ref: 16
Skill: Critical Thinking
; Reflective thinking skills
42) Which of the following contributes least to increasing a company's profit margins?
A) increasing demand
B) increasing global competition
C) high-growth markets
D) underserved economies
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Page Ref: 17
43) Which of the following best explains why the Japanese firm Canon relocated much of its production to China?
A) low-cost financial capital
B) low-cost labor
C) access to raw materials
D) lack of skilled managerial talent in home country
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Page Ref: 17
44) A restaurant chain based in Hong Kong plans to open a series of restaurants in the United States to gain access to low-cost capital for its expansion efforts. Which of the following, if true, would most strongly strongly support the claim that establishing U.S. operations would not be the best choice for providing the chain access to the low-cost capital it seeks?
A) Relocation to the U.S. would involve substantial cross-cultural risk.
B) U.S. funding sources are more expensive than capital sources in many other promising locations.
C) The company has attracted significant interest from American venture capitalists.
D) U.S. funding offered in the hospitality sector tends to be more expensive than funding for health care firms.
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Page Ref: 17
Skill: Critical Thinking
; Reflective thinking skills
45) Increases in international trade and investment are accompanied by increases in all of the following except ________.
A) literacy rates
B) individual affluence
C) cross-border conflict
D) national prosperity
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Page Ref: 18-19
46) Which of the following, if true, would most strongly support the claim that national prosperity is increased by participation in international business?
A) Countries that participate in international trade have higher GDPs than non-participating countries.
B) Individuals in advanced economies tend to set purchasing trends for consumers worldwide.
C) For most countries, levels of international trade have increased significantly in recent decades.
D) National literacy levels are strongly correlated with a country's degree of political freedom.
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Page Ref: 18
Skill: Critical Thinking
; Reflective thinking skills
Freehold Investment Corp. (Scenario)
Dan Freehold and his business partner, Bethany Quinn, are successful investors engaged in a variety of enterprises. Recently Dan and Bethany have decided to expand their foreign investing operations. They hold a meeting for individuals interested in participating in certain overseas ventures.
47) At the meeting, Dan explains to the attendees that Freehold direct investment projects differ from international trade in that ________.
A) the firm itself is crossing international borders to purchase foreign assets
B) the firm is restricting its investments to stocks and does not purchase mutual funds
C) the firm has chosen to focus strictly on the technology sector
D) the firm is engaging in the transfer of products across national borders
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48) Dan discusses an investment opportunity that involves the purchase of selected securities from the Chinese stock market. This opportunity represents which type of international investment?
A) indirect production
B) international portfolio
C) foreign direct
D) domestic securities
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49) Bethany presents another opportunity that involves the purchase of a manufacturing plant in South Korea. She explains that this type of strategy will involve ________ ownership on the part of the firm.
A) indirect
B) passive
C) short-term
D) active
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50) Phillip Hardy, one of the potential investors, expresses the desire to purchase only those types of assets in which he can maintain a relatively short-term interest. Which of the following investment opportunities would be most suited for Mr. Hardy?
A) a venture that gives investors ownership of the equipment used by multiple South African mining companies
B) an initiative to purchase the technology assets of an Indian consulting firm
C) the Freehold Eastern Growth Fund, which purchases Eastern European growth stocks
D) the Freehold World Climb Project, which maintains partial ownership of an Australian hiking equipment production plant
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International Trade Summit (Scenario)
An international trade summit is held in Geneva, Switzerland. The purpose of the summit is to cooperatively develop policies that promote international trade. Representatives from 50 different countries attend the summit.
51) One of the attendees represents a leading nation in the international merchandise trade. This attendee is most likely from which of the following countries?
A) New Zealand
B) Germany
C) Kenya
D) Saudi Arabia
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Page Ref: 6
52) One of the attendees represents a leading nation in the international services trade. This attendee is most likely from which of the following countries?
A) Brazil
B) Greece
C) Spain
D) South Africa
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Page Ref: 9
53) One summit attendee pointed out that the total value of her country's products trade typically accounted for more than 100 percent of her nation's GDP. This attendee most likely represents ________.
A) Japan
B) United Kingdom
C) France
D) Netherlands
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Page Ref: 6
Overseas Expansion (Scenario)
Whittaker Semiconductors has recently decided to expand its operations overseas. Amanda Quan, Vice President of International Business, assigned a team of investigators to analyze the risks faced by the company in making this move. Of particular interest were the risks that might affect the success of a new production plant to be located in one of three potential countries.
54) Philip Baxter reported on the risks associated with establishing the plant in Country A. The most significant risk, in his view, was posed by the government's complex bureaucratic structure. Philip reported the likelihood of significant administrative delays in opening the plant. The risk identified by Philip is an example of which of the following?
A) country risk
B) commercial risk
C) currency risk
D) cross-cultural risk
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Page Ref: 11
55) LeShaun Golding researched the risks linked to establishing the plant in Country B. He cited government intervention, lack of local managerial talent, and unethical business practices as the most prominent risks for this location. LeShaun noted all of the following types of risks except ________.
A) currency risk
B) political risk
C) country risk
D) cross-cultural risk
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56) Rosa Suarez reported on her analysis of cross-cultural risks involved with establishing the plant in Country C. Each of the following was most likely discussed in her report except ________.
A) language barriers
B) lifestyle differences
C) religious beliefs
D) the level of national debt
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Sterling Auto International (Scenario)
Sterling Auto International is a successful car manufacturing company headquartered in Detroit, Michigan. Over the past year, the company implemented multiple efforts to expand its overseas operations. At a recent shareholder's meeting, attendees questioned the CEO's motivations for authorizing certain of the expansion efforts.
57) One shareholder questioned the CEO's rationale for beginning an exploratory effort to establish a new manufacturing plant in India. The CEO responded by explaining that India was an untapped market with a high demand for products such as those produced by Sterling. His rationale represented an example of which of the following reasons for international expansion?
A) investing in a potentially rewarding relationship with a foreign partner
B) gaining access to lower-cost or better-value factors of production
C) seeking opportunities for growth through market diversification
D) better serving key customers that have relocated abroad
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58) The CEO introduced another overseas effort by noting that it represented an attempt to confront an international competitor. The CEO was most likely referring to which of the following efforts?
A) a new plant established in Vietnam to benefit from low-cost labor
B) a sales outlet established in Indonesia, where Sterling could charge more for its products
C) a marketing and advertising partnership established with a successful French car retailer
D) a distribution center established in London to preempt the growth of a British car manufacturer
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59) One shareholder wanted clarification about a research effort that investigated the possibility of setting up a plant in China. The CEO explained that serving China's rapidly growing middle class population would enable Sterling to increase the size of its customer base dramatically. In China, the CEO was most likely interested in ________.
A) avoiding government intervention
B) challenging Chinese competitors
C) gaining access to innovative ideas
D) developing economies of scale
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Page Ref: 17
60) The CEO justified one of the company's moves by pointing out that it not only enabled Sterling to benefit from global sourcing advantages, but it also provided access to new ideas about business methods. The shareholders viewed this justification positively most likely because they understood which of the following?
A) Sourcing advantages are usually more important to growth than obtaining new business ideas.
B) International firms may have more than one motive for international expansion.
C) The most compelling motive for international expansion is to gain new ideas from other markets.
D) This expansion strategy would enable the company to better manage cross-cultural risk.
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Page Ref: 16-17
61) In discussing the expansion effort to India, the CEO reminded shareholders of Black and Decker's move to partner with the Indian auto retailer Bajaj. The CEO was most likely attempting to justify which of the following?
A) a joint venture that would position Sterling for long-term sales in India
B) a marketing effort targeted to American citizens living in India
C) a price drop to ward off competition from an emerging Indian auto retailer
D) a new manufacturing protocol based on an efficient Indian production method
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Page Ref: 17
62) What is international business, and how has it transformed the world economy?
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, 1-6
63) In a short essay, explain the four trends that provide evidence for the globalization of markets. Provide an example to illustrate one of the trends.
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64) In a short essay, explain the main differences between international portfolio investment and foreign direct investment.
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65) What is meant by the term "entrepôt economies?" In a short essay, explain the concept and provide an example.
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66) In a short essay, describe the major trends in the growth of foreign direct investment (FDI) since the 1980s.
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67) What are the main differences between products and services? In a short essay, explain the difference between the two and provide three examples of each. Which sector has seen the greatest growth in international trade in recent years?
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68) In a short essay, identify three sectors in the service industry that are internationalizing rapidly. Explain the types of activities conducted within each sector, and provide examples of three companies that operate in each.
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69) In a short essay, explain the cross-cultural risk faced by internationalizing firms. What causes this type of risk? Why might it pose a problem for internationalizing firms?
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70) In a short essay, discuss how international firms manage the four types of international business risk. Provide an example that illustrates the process of risk management.
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71) What distinguishes an MNE from an SME? In a short essay, describe the major differences between the two types of firms.
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72) In a short essay, explain why non-profit organizations might conduct cross-border activities.
73) Why might firms choose to participate pursue internationalization strategies? In a short essay, identify five major motivations for expanding overseas. Classify these motivations as strategic or reactive and provide an example of each.
74) What is a born global firm? Explain one strategic or reactive reason why an SME might choose to start as a born global.
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** **** suited *** Mr Hardy?A) * ******* that ***** ********* ownership of *** ********* **** ** multiple ***** ******* ****** companiesB) ** ********** to ******** *** ********** ****** ** ** ****** consulting ****** *** ******** ******* Growth **** which purchases ******* ******** ****** stocksD) *** Freehold ***** ***** ******* ***** ********* partial ********* ** ** ********** ****** equipment ********** ************ ************************ Trade ****** ************ international ***** ****** ** **** ** ****** *********** The purpose ** *** ****** is ** cooperatively ******* ******** **** promote ************* ***** Representatives from 50 different countries ****** *** *********** *** of *** attendees ********** * leading nation ** *** international *********** trade **** ******** ** **** likely **** which of the ********* ************ *** ZealandB) ********* ******* Saudi ************* * Page Ref: 6 52) One ** the ********* ********** * ******* ****** ** *** ************* ******** trade **** ******** ** most likely **** ***** of *** following ************ ******** GreeceC) ******* ***** ************* C Page **** ********** *** ****** ******** pointed out **** *** ***** value of *** ********* ******** ***** typically ********* *** **** than *** ******* ** *** ******** GDP This ******** most likely ********** ********** ******* ****** ********* FranceD) ****************** D **** Ref: ******************* Expansion ******************* Semiconductors has ******** ******* to ****** *** ********** overseas Amanda **** **** President ** ************* ******** ******** a **** of ************* ** ******* *** risks ***** by *** company ** ****** this **** ** particular ******** were *** ***** **** ***** ****** the ******* ** * *** ********** plant ** ** ******* ** *** ** three ********* ************** Philip Baxter ******** on the ***** associated **** ************ *** ***** ** ******* A *** **** *********** **** ** his **** *** ***** by *** ************ ******* ************ ********* ****** ******** the ********** ** *********** administrative delays ** ******* *** plant The risk identified ** ****** ** ** example ** ***** ** the ************ ******* ****** commercial ****** currency ****** ************** riskAnswer: A **** Ref: 11 55) LeShaun Golding researched *** ***** ****** ** ************ the ***** ** ******* * He cited ********** ************ **** ** ***** ********** talent *** unethical business practices ** *** most ********* ***** *** **** location ******* ***** all of the ********* ***** ** risks ****** ********** ******** ****** ********* ****** ******* ****** ************** *********** ******** **** ****** ******** ** her analysis ** cross-cultural risks involved **** ************ *** ***** in Country * **** ** the ********* *** **** likely ********* ** her report except ________A) ******** ********** ********* ************* ********* beliefsD) *** ***** of national *********** ********* **** ************* ****************** **** International is * ********** car ************* company ************* in ******* ******** **** the **** **** *** ******* *********** ******** efforts to expand *** ******** ********** At a ****** ************* ******* attendees questioned *** ***** *********** *** *********** ******* ** *** ********* ************ *** *********** ********** the ***** ********* for ********* ** *********** ****** to establish * *** ************* ***** ** ***** The *** ********* ** ********** **** India was ** ******** ****** with * **** ****** *** products **** ** ***** ******** by ******** *** ********* *********** ** ******* of ***** ** *** ********* ******* for ************* expansion?A) ********* ** * *********** ********* relationship **** * ******* ********* gaining ****** ** ********** ** ************ ******* of ************ seeking opportunities for ****** ******* market ***************** ****** ******* *** ********* **** **** ********* ************* ******** *** *** ********** ******* ******** effort ** ****** **** it *********** an ******* ** confront ** ************* ********** The CEO *** **** ****** ********* ** ***** of the following ********** a *** plant established in Vietnam ** ******* from ******** ******* * sales outlet *********** ** Indonesia ***** Sterling ***** ****** **** *** its ********** * ********* *** advertising partnership *********** with * ********** ****** car retailerD) * distribution center established in ****** to preempt *** ****** ** a ******* *** ******************* ******** *** *********** ****** ************* ***** * research ****** **** ************ *** possibility ** ******* ** * ***** ** ***** *** CEO ********* **** ******* ******* rapidly ******* ****** ***** population ***** ****** ******** ** ******** *** **** ** *** ******** base ************ ** China *** CEO was **** ****** ********** ** ________A) avoiding government interventionB) *********** ******* ************* ******* ****** ** ********** ******* ********** economies of ************ * **** **** *********** The CEO ********* *** of *** ********* moves by ******** out **** ** *** only ******* ******** ** benefit **** ****** sourcing ********** *** it **** ******** ****** ** new ***** about business ******* The ************ viewed **** justification ********** **** likely ******* **** understood ***** ** *** ************ ******** ********** *** usually **** ********* to growth **** ********* *** business ******* International firms may **** **** than one motive *** ************* expansionC) *** **** ********** ****** *** ************* ********* ** ** **** *** ideas **** ***** ********* This ********* ******** would ****** the ******* ** ****** ****** ************** *********** B **** **** 16-17 61) ** ********** *** ********* effort to India *** *** ******** ************ ** ***** *** ******** **** to ******* **** *** ****** **** ******** Bajaj *** *** *** **** ****** ********** ** ******* ***** of *** ************ * ***** ******* **** ***** position Sterling *** ********* ***** ** ******* * marketing ****** ******** to American citizens ****** in IndiaC) * ***** **** ** **** off *********** **** ** ******** ****** **** ********** * *** manufacturing ******** based ** ** ********* ****** ********** methodAnswer: * **** Ref: *********** **** ** ************* business *** *** has ** *********** the ***** *************** ************* ******** refers to the performance ** ***** *** ********** ********** by ***** across ******** ******* ***** ******** ****** *********** ****** *** ******* ***** ************ activities ** ** ************* ***** **** **** ******* ********* and engage ** ************* ************* **** foreign ******** *********************** ******** ** transforming *** ***** ** ***** ****** ** *** last ** ***** international ***** and ********** have *********** ************* growth Since *** 1980s ******** ******* **** ******** new impetus ** worldwide ******** ****************** ***** *********** ********** **************** thirty ********* ********* ****** ****** ***** and ***** the ********* *********** ************ substantial ****** liberalization ************* and industrialization which *** ******* global ******** transformation ******* on ***** ********* they *** ********* ******** away from *** ********** ******* ** developing economies *** ******** ******* *** **** to *** ******* proportion of ***** ********** and *********** ************ in ******* trade Along with ****** ************* advances in ********** is ******* ********* ******* ** ********* *** ****** ******* *** **** of information *** ************* ************ ** **** as ********** *** ******* technologies *** dramatically reduced *** **** of ********** ******** with ********* located around the ***** E-commerce ***** international ******** increasingly ********** for firms ** *** ***** and ******** ****** ************* ******** *** ******** globalization to progress **** ******* Globalization ** **** ** ************ *** *********** ** *** ****** ************ **** ******** ** * short ***** ******* the **** ****** that ******* ******** *** *** ************* of markets Provide ** ******* ** ********** *** ** *** ************* In ********* ***** *** ************* ** ******* ** ******* ** ******* related trends First ** *** ************* growth of international ***** For example ** 1960 cross-border trade *** ****** *** ***** $100 ******* per **** ***** it ******** for * *********** ********** ** the ***** ******* amounting ** **** *** trillion annually *** **** ** **************** Second trade ******* ******* ** accompanied ** *********** ***** of capital ********** *** ********* The ***** ***** is *** *********** ** ****** ************* global ********* systems *** ********** that ********** the ************ flow of ******** ***** ********** *** ********* ****** ************* *** ******* ***** * greater ****** ** ************* ***** nations ******* **** ************* as the World ***** ************ *** *** ************* ******** Fund 64) ** a ***** ***** ******* *** **** *********** ******* international ********* investment *** foreign ****** ****************** ***** of ****** *************** ***** **** ********** between *** two types ** investments concerns *** types ** assets ********* ********* ********** involves *** purchase of securities ** other financial ****** ******* ****** ********** involves *** ******** ** ********** ****** such as ******* technology ***** land ****** *** ********** Types ** *************** ****** **** ********** concerns *** level or **** ** ownership ********* ********** ****** to ******* ********* **** no ****** management ** ** ******* over *** ****** ********* ******* ****** ********** ** *** other hand ******** * more ****** **** of ********* **** * productive *********** ******** ************** ***** main ********** ******* the two ***** ** strategies involves *** length of ******** maintained by ********* ** international portfolio investment ********* **** a ********** ********** interest in *** ********* of ***** assets ** ******* direct ********** ***** ******* **** * ********* ********* ***************** **** ** ***** by *** term "entrepôt economies?" ** * short essay ******* *** ******* *** ******* ** ************** Entrepôt economies *** those **** ****** a large ****** ** ******** **** ** ***** ******** *** ** ********* into ****** *********** products *** some *** simply re-exported ** ***** ************ ************ economies *********** trade is * ***** component ** ******** ******** The ********* *** very ********* on ************* ***** ******** to domestic ************ ******************* ** * ***** ********* or ***** *** ********* ******** ******** **** the ****** **** ***** ** **** ******* to China *** other ************ in **** ***** ******** ** ********* ********* include ******* *** *********** **** **** ***** Korea and Malaysia ** all of ***** ********* ***** ******** for more **** *** ******* of GDP **** **** **************** ** * ***** ***** ******** *** ***** ****** in *** ****** of foreign ****** ********** (FDI) since *** ************ ***** the 1980s ******* ****** investment ***** *** ********* ******** ****** **** various ***** regions *** ****** ****** ** *** *** ***** immensely especially **** ******** *** developed) ********* **** ** ***** ****** *** ***** America *** inflows **** *********** ** **** with *** ********* ***** that ****** ********* *** September ** ********* ******* ** *** ****** States *** *** ***** ******* ****** *** ** growing **** time Of particular ************ ** *** growth ** FDI **** developing ********* ******* with ***** ******* less ********* ********** **** *** ******** ** investment ******* **** ** *** ********** ********* are ******* in ***** ** ****** Asia *** ***** America Despite poor ****** ****** developing ********* ************ comprise * *********** and growing proportion ** ************* ***** *** investment ********** Page **** ************ **** are *** main differences between products and ********* ** * short essay ******* the difference ******* *** *** *** ******* ***** ******** ** each ***** ****** *** **** the ******** growth ** ************* ***** in ****** years?Answer: ******** *** ******* as ******** merchandise such as ******** ********* *** cars Services ** ******** *** ********** ***** performances or efforts ********* ******** ** ****** ******* ** ***** ** *** ******** ****** Some ******** ** ******** *** ******** *********** campaigns ************ ********* *** ******** restaurant ********** In ****** ***** ******** ***** has **** growing ****** **** ******** trade ************* ***** ** ******** now ******** for ***** *** ******* ** *** international trade *** ** ******* ******* Page **** **************** ** * ***** ***** ******** three sectors ** *** ******* ******** **** *** internationalizing ******* ******* *** types ** activities ********* ****** each ****** *** ******* examples ** ***** ********* **** operate ** ************ ************* construction and engineering–Activities within **** ****** include ************ ******** power ********* ****** *** *********** services *** ******** ********* *** **** ********* ****** this sector include ABB Bechtel Group *********** Kajima ****** ******* *** ******* *** Banking ******* *** insurance–Activities ****** **** ****** include ******* ******** ********* provision **** ********** *** financial ********** Companies ****** **** sector ******* ***** ******** **** *** Ernst & ****** Education ******** and ************************ within **** ****** ******* management training ********* training and ******* ******** ******** ********* ****** this ****** ******* Berlitz ***** **** ***** ******* ******* **** Pearson *** ******** **** **** 10 69) ** a ***** ***** explain *** cross-cultural **** faced ** ****************** firms **** ****** **** type ** ***** Why ***** ** **** * ******* for ****************** ************* ************** risk refers ** * ********* ** ***** where a cultural **************** **** **** ***** ***** ** ***** ************** risk is ***** by *********** ** ******** ********** mindsets customs and religion ****** unique to * ******* **** ** ** ************ *** *********** **** *** ********** to *** **** ***** ****** influence the mindset *** **** ***** ** ********* and *** ******** ******** ** ****** ******* ******** *************** differ ************* from ***** of buyers ** *** home **************** is a ******** dimension ** culture ** ******** to ************ communication ******** is * window ** people's ***** ******* *** living conditions **** *********** **** one ******** ** ******* it ** ***** difficult ** **** words **** convey *** **** ******** **** challenges impede ********* communication *** ***** ***************** Miscommunication *** to cultural *********** ***** rise to ************* business ********** and *********** relations **** ********* **** Ref: 10-11 AACSB: ************* ********** ******** ** *** ****** economy; ************* *** ********* ****************** ** a ***** essay ******* *** ************* ***** ****** *** **** types of ************* ******** risk ******* an example **** *********** *** process ** **** managementAnswer: ************* ******** ***** ****** ** avoided *** **** *** ** anticipated *** managed Experienced ************* ***** ******* ******** ** forecast ********* risks understand ***** ************ and **** ********* action ** ****** their ************* ************* risks *** ********* *********** * ****** example ** *** ****** ********* ****** that emerged in *** fall ** **** *** ****** ****** ** ***** *** ********* firms in **** Europe *** ********* **** ********* *********** deflation and ****** ******** ** ******** ********** *** spending power *** year **** *** ***** reductions ** ************* ******** *** shipping Central banks worldwide ****** to rally national ********* ** ********* ******** of dollars **** their financial systems **** **** ************* **** distinguishes ** MNE **** ** **** ** a ***** ***** ******** *** ***** *********** ******* the *** ***** of ************ * multinational ********** (MNE) ** * large ******* **** substantial ********* **** ******** ******* ******** activities ******* a ******* of ************ *** ********** ******* in ******** ********* *** of *** ********* ** **** ** **** they tend ** ***** *** ******* *********** ************* and ********* activities ******** ** *** ***** ** ***** **** ******** ***** ** ******** ** * **** office ** ************ the typical MNE owns * ********* ******* ** ************ ** collaborates **** ******** suppliers *** independent ******** ******** ****** (sometimes ****** affiliates) Typical **** include *********** ******* ******** ******** **** ******* Hotels ****** *** *** ****** **** ********** small *** ************ enterprise (SMEs) ** * ******* **** **** than *** employees ** *** United ****** and ****** *** **** **** 250 ********* in Europe ** ******** ** ***** smaller ******* in ***** ********** economies **** **** to **** ******* ********** and ***** resources *** ********* use ********* to ****** *************** **** **** **************** In * short ***** ******* why non-profit organizations might conduct ************ activitiesAnswer: ** ******** ** ************** focal ***** ** international ******** there *** ******** ********** organizations **** ******* cross-border ********** These include ********** ****** and **************** ************* ****** Nonprofit ************* ****** ******* ****** ******* ***** ************* activities They *** serve as advocates *** *** **** ********* ******** religion ** research **** ******* internationally ****** ** conduct ***** activities or ***** funds Examples ** ********** organizations ******* *** Bill and ******* ***** Foundation and the ******* Wellcome ***** ***** ******* health and educational initiatives **** ** ** ************* ********** ************ dedicated ** reducing ******* Page **** 15-16 73) Why ***** ***** ****** ** participate ****** ******************** *********** In * ***** essay identify **** ***** motivations *** ********* overseas Classify ***** *********** ** ********* ** ******** *** provide ** example ** eachAnswer: ********* ************ *** ****** *** firms ***** ****** *************** ** ** **** ************* for ****** ******* market *************** Firms ****** ** *** **** *** ****** ********* **** exists ******* the **** ******* *** ******* is *** expansion ** ********* ****** ******** ****** ********** *** ****** Firms expand ** **** ****** ******* *** ******* ******* ******* are ***** underserved ** not ****** ** *** **** intense *********** combined **** ****** ****** ****** ******* **** ********* *** command ****** ******* *** ***** offerings For ******* ******** to ***** ********** **** ******* ******** ******** ************* American Standard *** **** *** ****** **** ***** * **** ********* *********** environment ** rapidly *************** countries such ** Indonesia ****** and ******** Firms **************** ** gainnew ***** ***** ******** services *** business ******* *** ********** of ***** ******** ****** ***** ***** ******* *** ********* for ********* ************** ************* *** ********** *** ******* ************ ********* ********** were ******* ** Toyota *** **** adopted ** ***** ************* *** **** the worldd ***** ***** **************** ** be ****** to ****** ******* ******* from ****** sourcing ********** ** gain *********** ** *** sourcing ** ******** ********* ***** ********* ************* operations ** countries where needed *** materials *** ******* ** ***** *** ********* *** ***** *** be **** ******** ******** One ******* ** the ******** producer Alcoa ***** ******* ****** ********** ****** ** ******* ********** **** mineral ******* **** mines ** ****** Guinea ******* *** ********** ***** ****** ** gain access ** ********** or ************ factors ** production ******************** ******* *** **** to ****** ******* ********** managerial ****** ***** *** **** at lower ***** ************** ** ****** ******* value at locations worldwide *** example some ********* computer ************* **** established ************ ** *** ****** ****** ** access ******** capitalf ***** **************** ** ******* ********* ** ***** ** ******** production ********* *** R&D Economies ** ***** refers ** *** reduction ** *** per-unit **** ** ************* *** ********* *** to ********* ** high volume *** ******* *** ******** **** ** manufacturing ****** cameras ** **** ******* **** *** per-unit **** ** ****** **** 100 ******* ** ********* internationally *** **** greatly ********* the **** of its customer **** ******* ********** *** volume of products **** it ************* Firms ***** ****** ** ****** ** * potentially ********* ************ **** * ******* ******* ***** often **** ********* strategic ******* *** ********* ****** Joint ******** ** ************* ********* **** *** ******* ******* *** lead ** *** *********** of *** ******** ***** *********** ** ****** *** ******* or ***** ********* ************* ************* For example ***** *** ****** ******* * ***** ******* with ***** ** Indian ******** ** ******** ****** *** ******** ********* ***** in *** huge ****** ************** **************** expand to better ***** *** customers that **** ********* abroad ** a ****** economy **** firms **************** ** better ***** clients **** **** ***** into foreign ******* For example when ****** ****** *** ***** factory ** *** ****** Kingdom **** ******** ********** ********* followed ************ their *** ********** ************** or ******** **************** ***** also **************** ** confront international *********** **** *********** ** thwart the ****** of *********** in *** home market International *********** ** *********** and ********** **** ************* *********** ******** ******* ********* *** firm *** ******* *** *********** *********** ** *********** *********** ** international ******* or ************ ******** a ************ **** ******* ** *********** *** **** *** ****** ** the **** **** to ******** ** existing competitor it would be ********** reactively If *** **** acts to ******* * ********** ** ***** ** responding proactively One example ** a ********* response ** ************* ********** ***** into Japan just ** *** **** rival in *** earthmoving equipment industry Komatsu *** getting ******* in *** ***** ***** ************* preemptive **** hindered ********* ************* expansion *** at ***** * ****** Had ** not ***** *********** to ****** ********* ****** in Japan ********* **** ****** Caterpillar ***** certainly **** ** face a **** ****** ***** ****** **** **** ************** **** ** * **** ****** firm? ******* *** ********* ** ******** ****** *** ** *** ***** choose to ***** as * **** ************* A born ****** firm ** a ***** *************** company that ********* ************* ******** ******** **** early ** *** ********* ****** ******* **** ******* markets **** ******* *** found ** ******** ********* **** ** Australia *** ***** *** ******** markets **** as China *** India An *** might ***** ** * **** global ** ***** *** ********** ***** ** ************ manufacturing ***** ** ******* countries ************* the company ***** ******* **** ************ ************* operations ** * *** to confront its ******** *********** **** **** 13 ************ In * ***** ***** ******* *** ******* ** ************* trade ******** the two major ***** ******* ***** ************* trade ***** ***** ******* *** relationship between ************* ***** *** ******** prosperity and ******* ******** ** ********** this ******************* ************* traderefers ** ******** of ******** *** ******** ****** ******** ******* ***** ******** both ******** (merchandise) *** ******** (intangibles) ******** ** ******* *** through *** main ******* ************** ***** ******** ********* *** **** ** ******** or ******** ** customers located ****** **** * **** ** *** **** ******* ** * ***** country; **** ********* ** ****** sourcing–activities **** ******* *** *********** ** ******** ** ******** from suppliers ******* ****** *** *********** ** *** **** ******* ** * ***** country Exporting ** an ******** activity while ********* ** ** ******* **** of ******** and services Both ******** products and ************ goods such ** *** ********* and components are ******* ** ********* *** exporting There is * ****** ************ ******* ******** prosperity and ************* in ************* trade and ********** Nations **** ********* from ******** ********** *** *** increasingly ********** For example ***** ***** *** Eastern ******** ******* *** ****** ************* traders The ********** ** affluent ******** in ***** ********* ** ******* growing ** terms ** material **** ********** ** many ********** ********* **** ******** experienced **** ********* ** *** ********* ** *********** ************* and ***** ************* products While these ***** are attributable ** ******* ****** *** ******** of **** exchange ** ******** ******** capital *** ********** among nations *** paramount Rising ********** ********** **** ************* ***** *** ********** ***** improve ******** ***** ********* *** ****** **** in ******* around *** world Trade *** ********** promote ******* *** ********* *** *** reduce the ********** of ************ ******** In an *** ** ******** ******* *** ******** ****** relations ************* business ** ******* ******** **** ******** ** ******** ***** ******* *** ********** interactions that **** ****** ********* ***** ******* ************ ******** **** ***** integrate world economies *********** ** *** European Union **** ** ************ Europe into * new ********** in ****** ***** *** North American **** Trade Agreement ******* ******** ** **** has ********** *** economies of Canada ****** *** *** ****** ****** **** * ***** market ** roughly *** ******* ********* ********* ******* ****** the volume of ***** among *** ***** countries ****** ************ ** ****** NAFTA *** to ************* ****** ***** *** higher ********** rates ******** * *** ****** *** ******** ******* *** ****** States and ***** **** El Salvador ********* ******** ********* *** *** ********* ******** Known ** the ********* ******** ******* American **** Trade ********* ********** ** ** ************ *** ********* ** *** ****** countries **** Ref: *****
