●
Question 1
●
0.5 out of 0.5 points
●
A firm that pursues foreign direct investment to take advantage of
government incentives is demonstrating a(n) ________ motive.
Answers Available at http://bit.ly/2IGAXyU
●
Question 2
●
0.5 out of 0.5 points
●
Which of the following services cannot be exported? Answers
Available at http://bit.ly/2IGAXyU
Answers:
construction
education
insurance services
pure services
●
Question 3
●
0.5 out of 0.5 points
●
Which of the following statements is true of leasing? Answers
Available at http://bit.ly/2IGAXyU
Answers Available at http://bit.ly/2IGAXyU
Answers:
The lessor transfers ownership of the property in
exchange for a lump-sum payment.
It is an arrangement in which a contractor supplies
managerial know-how to operate a hotel,
hospital, airport, or other facility in exchange for
compensation.
A major advantage for the focal firm is the ability to
gain quick access to target markets, while
putting assets to use in earning profits.
It is a high-risk and high-cost method of entering a
foreign market.
●
Question 4
●
0.5 out of 0.5 points
●
An industrial design is intended to ________. Answers Available at
http://bit.ly/2IGAXyU
Answers:
protect information of commercial value
eliminate the possibility of the design being
copied
protect firms from intellectual property theft
improve a product's performance and
marketability Answers Available at
http://bit.ly/2IGAXyU
●
Question 5
●
0.5 out of 0.5 points
●
Incoterms were developed by the International Chamber of
Commerce in order to ________. Answers Available at
http://bit.ly/2IGAXyU
Answers:
reduce the costs of shipping and insuring
exported products
provide permission to export
standardize the cost of shipping and insuring
exported items
define how the buyer and seller share freight and
insurance costs Answers Available at
http://bit.ly/2IGAXyU
●
Question 6
●
0.5 out of 0.5 points
●
Azoo Government Projects (Scenario)
The nation of Azoo needs the assistance of a contractor to
construct a new bridge and a subway system. The nation lacks
the skilled labor and technical know-how to handle such largescale projects. Representatives of the Azoo government are
reviewing the project bids provided by two different
international contractors. Contractor A proposes a turnkey
contract for Azoo. Contractor B proposes a build-operatetransfer arrangement.
The government of Azoo might select Contractor B in order to
________.
Answers:
prevent the builder from operating in the country for
even a short period of time
avoid rental fee, user fee, and tolls during the
operational stage of the bridge and subway
system
increase the number of visitors to Azoo
build the projects cost-effectively Answers Available
at http://bit.ly/2IGAXyU
●
Question 7
●
0.5 out of 0.5 points
●
The strategic view of global sourcing suggests that ________.
Answers Available at http://bit.ly/2IGAXyU
Answers:
firms that procure supplies from foreign subsidiaries
are more likely than not to lose ground to
competitors who primarily bank on their own
resources
a strong legal environment is not the prerequisite for
increasing efficiencies by relocating strategic
operations abroad
the firms' innovative activities tend to make mature
products obsolete over time
just as firms achieve gains in efficiency, productivity,
quality, and revenues by leveraging offshore
talent, they also obtain the means to turn
around failing businesses, speed up innovation,
restructure operations, and fund otherwiseunaffordable development projects
●
Question 8
●
0.5 out of 0.5 points
●
Focal firms typically source from external suppliers for all of the
following reasons EXCEPT ________.
Answers Available at http://bit.ly/2IGAXyU
Answers:
the product can be purchased inexpensively
the supplier specializes in providing the product
or service
the supplier offers the same product to
competing firms
the product or service obtained is non-core
●
Question 9
●
0.5 out of 0.5 points
●
Global Sourcing Debate (Scenario)
Prof. Sean Peterson's class of international business has been
studying the controversies surrounding global sourcing. Prof.
Peterson divided the class into two groups, A and B. Group A
was assigned the task of defending global sourcing, whereas
Group B was assigned the task of arguing against global
sourcing.
The concept of creative destruction can be reasonably used by
Group A to support the view that ________.
Answers Available at http://bit.ly/2IGAXyU
Answers:
global sourcing creates opportunities and
stimulates innovation
outsourcing technical jobs leads to brain drain
firms that engage in offshoring are more likely than
not to fail in the long run
offshoring forces unskilled workers to seek
additional education
●
Question 10
●
0.5 out of 0.5 points
●
A(n) ________ is the purchase of an existing company or facility.
Answers:
greenfield investment
offshoring arrangement
outsourcing arrangement
acquisition Answers
Available at
http://bit.ly/2IGAXyU
●
Question 11
●
0.5 out of 0.5 points
●
Which of the following terms is used to refer to a focal firm's
partial ownership of an existing firm? Answers Available at
http://bit.ly/2IGAXyU
Answers:
equity participation
turnkey operation
direct investment
greenfield investment
●
Question 12
●
0.5 out of 0.5 points
●
________ is an arrangement in which the focal firm or a
consortium of firms plans, finances, organizes, manages, and
implements all phases of a project abroad and then hands it
over to a foreign customer after training local workers.
Answers Available at
http://bit.ly/2IGAXyU
Answers:
Home-replication strategy
Turnkey contracting
Exporting
Equity-based collaborative venture
●
Question 13
●
0.5 out of 0.5 points
●
International Business Class (Scenario)
Students in Professor Manning's international business class
have been assigned the task of explaining the different types
of FDI. Professor Manning formed groups among students.
The groups are to research their assigned topic and present
their information to the class using examples of real-world
firms for illustration. Jessica Hanson is the leader of Group A;
Manu Patel is the leader of Group B; and Mario Witherspoon
is the leader of Group C. Answers Available at http://bit.ly/2IGAXyU
During her presentation, Jessica describes how two
automakers joined forces and formed a separate firm by
pooling their assets. Which of the following topics was most
likely assigned to Group A?
Answers:
greenfield investment
equity joint venture
vertical integration
acquisition
●
Question 14
●
0.5 out of 0.5 points
●
Which of the following is true with regard to the risks of global
sourcing? Answers Available at http://bit.ly/2IGAXyU
Answers:
Environmental challenges exclude currency
fluctuations, tariffs and other trade barriers,
high energy and transportation costs.
Firms that source from countries whose currencies
are strengthening experience lower costs.
Global sourcing weakens competition leading to a
considerably risk-free international business
environment.
Inadequate legal systems, red tape, convoluted
tax systems, and complex business
regulations complicate local operations in
many countries. Answers Available at
http://bit.ly/2IGAXyU
●
Question 15
●
0.5 out of 0.5 points
●
A firm that pursues a collaborative venture to access raw
materials is demonstrating a(n) ________ motive.
Answers:
asset-seeking
efficiency-seeking
market-seeking
novelty-seeking
●
Question 16
●
0.5 out of 0.5 points
●
Fun Play Global Sourcing (Scenario)
Fun Play Inc., a company manufacturing toys for children, has
decided to outsource some of its value-chain activities.
However, the firm has no experience with global sourcing and
has hired a consulting firm to assist its managers. The
consulting firm has been assigned the task of determining
which activities should be outsourced and where the
outsourced activities should be located.
Which of the following would most likely be considered by the
consultants while deciding whether to keep each value-adding
activity in the home country or locate it in a foreign country?
Answers:
Would the HR department of Fun Play be able to
ensure smooth repatriation for managers after
they complete their assignments abroad?
Who will be responsible for training suppliers in
foreign locations?
Can different value-adding activities be effectively
configured across the world?
What are the odds in favor of Fun Play's
dominating the children's toy segment in its
home country?
●
Question 17
●
0.5 out of 0.5 points
●
________ is an arrangement in which a contractor supplies
managerial know-how to operate a hotel, hospital, airport, or
other facility in exchange for compensation.
Answers:
Build-operate-transfer
Management contract
Exporting
Leasing
●
Question 18
●
0.5 out of 0.5 points
●
Which of the following is the best example of a back-office BPO
activity?
Answers:
customer service
billing
technical support
marketing
●
Question 19
●
0.5 out of 0.5 points
●
Which of the following is a major challenge often faced by focal
firms that engage in global sourcing? Answers Available at
http://bit.ly/2IGAXyU
Answers:
no control over the quality of outputs
increased costs of business travel
lower-than-expected cost savings
domestic management of local distribution
●
Question 20
●
0.5 out of 0.5 points
●
Which of the following is a characteristic of project-based, nonequity ventures? Answers Available at http://bit.ly/2IGAXyU
Answers:
formation of a new legal entity
long-term sharing of resources
a specific agenda and timeframe
a broad scope of product development
●
Question 21
●
0.5 out of 0.5 points
●
Company-owned subsidiary is ________. Answers Available at
http://bit.ly/2IGAXyU
Answers:
a foreign intermediary that serves as an extension
of the exporter, negotiating on behalf of the
exporter and assuming such responsibilities as
local supply-chain management, pricing, and
customer service
accomplished by contracting with intermediaries
located in the firm's home market
a representative office of the focal firm that
handles marketing, physical distribution,
promotion, and customer service activities in
the foreign market
typically achieved by contracting with
intermediaries located in the foreign market
●
Question 22
●
0.5 out of 0.5 points
●
If a computer contains a microprocessor from Costa Rica and a
hard disk drive from the Philippines, the computer
manufacturer, who is based in Texas and operates across
Europe and West Asia, most likely uses ________ as an entry
strategy. Answers Available at http://bit.ly/2IGAXyU
Answers:
exporting
global sourcing
franchising
licensing
●
Question 23
●
0.5 out of 0.5 points
●
A focal firm's overreliance on suppliers can potentially lead to
________. Answers Available at http://bit.ly/2IGAXyU
Answers:
consolidation of the focal firm's network of
intermediaries
an excessive burden on home-country
suppliers
reduced control over important value-chain
tasks Answers Available at
http://bit.ly/2IGAXyU
added competitive advantage for the focal firm
●
Question 24
●
0.5 out of 0.5 points
●
The rate of inflation is a(n) ________ factor to be considered
while selecting the location for FDI.
Answers:
profit retention
human resource
market Answers
Available at
http://bit.ly/2IGAX
yU
infrastructural
●
Question 25 Answers Available at http://bit.ly/2IGAXyU
●
0.5 out of 0.5 points
●
Which of the following is true about cross-border contractual
relationships?
Answers:
A local firm allows the focal firm to blend into the
local market, attracting less attention.
They are more susceptible to volatility and risk
compared to FDI.
It is a more visible strategy than FDI and draws a
lot of criticism from the local market.
Focal firms use contractual relationships as an
advanced entry strategy in foreign markets.
●
Question 26
●
0.5 out of 0.5 points Answers Available at http://bit.ly/2IGAXyU
●
Which of the following is a key reason that a focal firm would most
likely enter a collaborative venture with a foreign firm?
Answers:
the foreign firm requires the focal firm's financial
resources to compete locally as well
the focal firm wants to duplicate a competitor's
marketing strategies abroad
the market abroad is saturated; there is no scope
for the focal firm's products or services
the foreign firm can fill an important gap in the
focal firm's value chain Answers Available at
http://bit.ly/2IGAXyU
●
Question 27
●
0.5 out of 0.5 points
●
The Agreement on Trade-Related Aspects of Intellectual Property
Rights (TRIPS) was created by the ________.
Answers:
World Bank
United Nations
IMF
WTO
●
Question 28
●
0.5 out of 0.5 points Answers Available at http://bit.ly/2IGAXyU
●
Which of the following is an example of franchising?
Answers:
A Germany automobile manufacturer opens an
office in Philippines for its customer care
operations.
An Italian clothing company opens manufacturing
factories in China and Bangladesh to reduce
manufacturing costs.
A U.S-based quick-service restaurant gives rights
to another business to use its entire business
system in exchange for compensation and
royalties.
A U.S.-based animation company allows factories
in China to use their famous cartoon character
on mugs and stationery.
●
Question 29
●
0.5 out of 0.5 points
●
Which of the following refers to a risk, stemming from
environmental factors, that is closely associated with global
sourcing?
Answers:
high energy costs
rapid turnover of skilled employees
weak intellectual property laws
overreliance on suppliers
●
Question 30
●
0.5 out of 0.5 points
●
Contract manufacturing can best be defined as ________.
Answers:
an arrangement in which the focal firm contracts
with an independent supplier to manufacture
products according to well-defined
specifications
the outsourcing to independent suppliers of
business service functions such as
accounting, payroll, human resource functions,
travel services, IT services, customer service,
or technical support
the relocation of a business process or entire
manufacturing facility to a foreign country
sourcing from the firm's own production facilities
●
Question 31
●
0.5 out of 0.5 points
●
The purchase of an existing company or facility is known as a(n)
________.
Answers Available at http://bit.ly/2IGAXyU
Answers:
greenfield investment
licensing
equity joint venture
acquisition
●
Question 32
●
0.5 out of 0.5 points
●
When a firm allows others to use an entire business system in
exchange for compensation, the arrangement is known as
________. Answers Available at http://bit.ly/2IGAXyU
Answers:
franchising
joint venture
industrial design rights
equity venture
●
Question 33
●
0.5 out of 0.5 points
●
Which of the following is a benefit of global sourcing? Answers
Available at http://bit.ly/2IGAXyU
Answers:
bridging of the rich-poor divide
elimination of competitors
minimal reliance on suppliers
access to qualified personnel abroad
●
Question 34
●
0.5 out of 0.5 points
●
A firm that builds a new manufacturing facility in a foreign market
is participating in a(n) ________.
Answers:
acquisition
merger
equity participation
greenfield investment
●
Question 35
●
0.5 out of 0.5 points
●
The Internet facilitates international trade in the service sector by
________.
Answers:
providing the means to export some types of
services to foreign markets
allowing firms to attain maximum control by
establishing ownership of key assets
eliminating the need to deal with foreign currency
exchange rates
providing the means to avoid taxes in the foreign
market Answers Available at
http://bit.ly/2IGAXyU
●
Question 36
●
0.5 out of 0.5 points
●
Organic Towel Exports (Scenario)
The Organic Towel Company (OTC) employs 400 workers at its
facility in Liverpool, England, where the firm has been
manufacturing 100% organic cotton towels for five years. OTC
sells towels in the United Kingdom primarily to boutique hotels
and specialty retail stores, as well as to individual consumers
through the company's. Recently, OTC managers attended a
trade show in London where they made contact with
numerous foreign market managers. OTC received a request
from Earth Waves, an organic clothing store in Toronto,
Canada, for a large order of towels. OTC had not been looking
into expanding, but firm managers are seriously considering
the opportunity to reach a global niche market with their
towels.
Which of the following most strongly suggests OTC should not
export its towels to Earth Waves?
Answers:
OTC's towel manufacturing at the Liverpool
facility is nearing maximum capacity.
Earth Waves has offered to guide OTC through
Canadian regulations.
Earth Waves has a large client base and
publishes a semi-annual catalog.
OTC managers are risk-takers with the
determination to expand OTC.
●
Question 37
●
0.5 out of 0.5 points
●
Focal firms that internationalize through exporting will most likely
perform ________ in the home market. Answers Available at
http://bit.ly/2IGAXyU
Answers:
sales
manufacturing
marketing
distribution
●
Question 38
●
0.5 out of 0.5 points
●
Which of the following is an essential method used by a focal firm
to protect its intellectual property in a foreign country?
Answers:
password-based security systems
lobbying foreign governments for stronger
intellectual property laws
bribing foreign government officials
avoiding trade in countries with weak intellectual
property laws
●
Question 39
●
0.5 out of 0.5 points
●
International Business Class (Scenario)
Students in Professor Manning's international business class
have been assigned the task of explaining the different types
of FDI. Professor Manning formed groups among students.
The groups are to research their assigned topic and present
their information to the class using examples of real-world
firms for illustration. Jessica Hanson is the leader of Group A;
Manu Patel is the leader of Group B; and Mario Witherspoon
is the leader of Group C.
During his presentation, Mario describes how a large
Japanese automaker built a factory in Kentucky. Which of the
following topics was most likely assigned to Group C?
Answers:
consortium
equity joint venture
horizontal integration
greenfield investment
●
Question 40
●
0.5 out of 0.5 points
●
________ is the world's leading licensing firm? Answers Available at
http://bit.ly/2IGAXyU
Answers:
Mattel
The Walt Disney Company
Nickelodeon
Major League Baseball