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implies that the national government exerts minimal influence on the exporting and importing decisions of private firms and individuals.
controlling imports to minimize domestic job losses
holds that a country must be self-sufficient in critical raw materials, machinery, and technology or it will be vulnerable to foreign threats.
proposes that tariffs be imposed on imported manufactured goods to give U.S. firms temporary protection from foreign competition until they can fully establish themselves.
suggests that a national government can make its country better off if it adopts trade policies that improve the competitiveness of its domestic firms in oligopolistic industries.
theory specifically addresses the needs of individual industries
suggests that a country should encourage firms to compete in foreign markets by harnessing some advantage the country possesses.
encourages the growth of domestic manufacturing industries by erecting high barriers to imported goods.
suggest(s) that special interest groups will often dominate the general interest on any given issue because these groups are willing to work for the passage of laws
According to public choice analysis, domestic trade policies that affect international business have a tendency to develop from
is a tax placed on a good that is traded internationally
tariff is assessed as a percentage of the market value of the imported good
tariffs imposed by developed countries are
tariff is assessed as a specific dollar amount per unit of weight or other standard measure?
tariff includes both ad valorem components and specific components
Any government regulation, policy, or procedure other than a tariff that has the effect of impeding international trade may be labeled a
imposes a low tariff rate on a limited amount of imports of a specified good, but imposes a prohibitively high tariff on the good above that limited amount
is a promise by a country to limit its export of a good to another country to a pre-specified amount or percentage of the affected market
is an absolute ban on the exporting and importing of goods to a particular destination.
Local purchase requirements, investment controls, and product and testing standards are all forms of
make it more difficult for importers of nonessential goods to acquire foreign exchange
is/are common in key industries like broadcasting, utilities, air transportation, defense contracting, and financial services.
A(n) ________ is a geographic area where imported or exported goods receive preferential tariff treatment.
A foreign trade zone is primarily used by governments to
A(n) ________ is calculated to offset the advantage an exporter receives from a subsidy.
Which agency initially investigates complaints about unfair trade practices in the United States?
can occur when a firm sells its goods in a foreign market at a price below what it charges in its home market.
This type of alliance is usually in the high technology fields where the companies band together to research and develop new products and processes with the assistance of government funding.
What type of venture did Gulf Canada and the government of the Ivory Coast enter into when they combined to explore and develop prospective oil fields in its coastal waters?
This type of strategy alliance must have its own set of managers and board of directors to allow it a broader purpose, scope, and duration.
Which of the following is the world's largest food-processing firm?
Which of the following was not mentioned as a factor MNCs must consider when choosing a partner MNC.
the size of the firm
When 20th Century Fox and Paramount Pictures joined to produce the Movie Titanic, they formed what type of alliance?
Which of the following was not mentioned as a way a joint venture is managed?
an independent team of managers may be hired to run the new company that will be totally independent of the home office.
Which of the following was not listed as a benefit for international businesses that enter into strategy alliance?
less competition in the host country
When Mattel and Bandai joined to distribute each others products it would be considered what type of alliance?
Which of the following is the primary pitfall MNC partners experience in a strategic alliance?
When an MNC considers forming an alliance with another MNC, which of the following was not mentioned as one of the three most critical issues they will face in deciding how to manage the new business?
learning potential of the alliance
In this type of strategic alliance, the partners agree not to get involved in ongoing operations and so delegate management control to the executives of the joint venture itself.
When Intel, Micron Technology, Samsung, Hyundai, NEC, and Siemens joined to develop the next generation DRAM chips they formed what type of alliance?
Which of the following are the three arrangements that may be used to jointly managing a strategic alliance?
shared management, assigned, delegated
When General Mills and Nestle' joined to form Cereal Partners Worldwide, it was what type of alliance?
Research suggests that strategic alliances are more likely to succeed if the skills and resources of the partners are similar.
A strategy alliance is an agreement between two firms to cooperate on a venture for their mutual benefit.
Most comprehensive alliances are formed as non-joint ventures.
The agreement venture involving Kodak, Fuji, Canon,, Minolta, and Nikon for the new type of film was an example of a successful joint venture.
Governmental support plays a major role in the formation of R&D consortiums.
By signing a joint-license agreement, all the MNCs involved in an R&D alliance will be able to use what is developed in the new business.
When General Mills and Nestle' developed the Cereal Partners Worldwide company, it was an example of successful joint venture.
Economies of scope and scale in marketing and distribution confer benefits for firms that aggressively and quickly enter numerous markets.
Non-joint ventures are generally mores stable and last longer than a joint venture.
A joint venture usually takes the form of a corporation that is incorporated in one of the partners' home countries.
As a domestic firm evolves into a full-fledged MNC, which of the following is considered its final development stage?
This global organization design is particularly useful for MNCs with a polycentric or multidomestic corporate philosophy.
global area design
An MNCs organization design is used for all but which of the following?
develop the organizations mission statement
This type of global design calls for an MNC to create departments or divisions that have worldwide responsibility for the common organizational functions.
global functional design
Which of the following are considered the five most common forms of global organization design?
product, area, functional, customer, matrix
This approach to global marketing calls for the MNC to analyze the needs of all their worldwide customers and then adopt a standardized operation to serve all of them.
This type of global design helps bring together the functional, area, and product expertise of the MNC to develop new products or respond to new challenges in the global marketplace.
global matrix design
Using this approach to meet the demands of overseas business, a MNC delegates responsibility for processing the orders to individuals within existing domestic departments.
When a MNC adopts a global product design, it can separate its operating divisions into which two forms?
M-form & H-form
This global design is used when MNCs serve customers with diverse wants and needs requiring totally distinct marketing approaches.
global customer design
A MNC that has adopted a global design will need to integrate which three types of knowledge to compete effectively internationally?
area, product, functional
Which global design is not suitable for product lines undergoing rapid technological change, makes coordination across functional areas expensive, and discourages global product planning?
global area design
Which of the following is not considered a competitive advantage of the global product design?
this design is useful when the various customer groups are diverse enough to require distinct marketing approaches
This is the basic vehicle through with strategy is ultimately implemented and through which the work of the organization is actually accomplished.
MNCs typically adopt one of which three managerial philosophies?
ethnocentric, polycentric, geocentric
The global area design is particularly useful for MNCs with a geocentric or multidomestic corporate philosophy.
The organization design is the overall pattern of structural components and configurations used to manage the total organization.
Often the most critical aspect of strategic control involves the MNCs financial resources.
The global product design is useful for a firm whose strategy is marketing-driven rather than predicated on manufacturing efficiencies or technological innovation.
An export department allows a firm to concentrate resources and create specialized programs targeted on international business activity, while simultaneously keeping that activity segregated from the MNCs domestic activities.
The planning process control system calls for a MNC to concentrate its organizational control on the actual mechanics and processes the firm use to develop strategic plans.
The three levels of control are the strategic, functional, and operations.
Most MNCs create their own global hybrid design to meet their specific needs.
In the H-form of global product design, the various divisions are usually self-contained operations with interrelated activities.
The most common type of organizational control system is a centralized one called responsibility center control.
In the centralized form of decision making, the decisions may take into account the MNCs overall needs, but could hinder the ability of subsidiary managers to respond to changes.
Active subsidiary boards of directors are particularly useful in H-form organizations be a holding company's subsidiaries are typically run independently of one another.
When a MNC applies its existing domestic organization design to its international organization it is using the corollary approach to sales.
A 50:50 ownership structure is required in a joint venture.
Strategic alliances include cooperation between international firms such as cross-licensing of proprietary technology.
A joint venture is a type of strategic alliance.
Joint ventures are generally less stable than non-joint venture strategic alliances.
Countries concerned about the influence of foreign firms on their economies may require MNCs to work with a local partner to enter the market.
Firms can avoid hostile government regulations by partnering with local firms.
Strategic alliances can be used to limit risk.
Kodak's strategic alliance with its Japanese competitors reduced its risks, but perhaps negatively affected its profits.
Functional alliances are legally organized as joint ventures.
Marketing alliances are relatively uncommon in the international airline industry.
An alliance in which two or more firms each manufacture products is an R&D alliance.
Comprehensive alliances are usually organized as non-joint venture strategic alliances.
Having a partner with products that are complementary to, but not directly competitive with its own, increases a firm's chance of a successful alliance.
Research suggests that strategic alliances are more likely to be successful if the partners compete but in different geographic markets.
Mutual trust is an important component of compatibility.
Because Nestle does not make cereal, the product on which it is collaborating with General Mills, the joint venture between the two firms is likely to be more successful.
In a limited partnership, both firms assume full financial responsibility for the venture, regardless of the amount each has invested.
Firms are more likely to pursue public-private ventures when a country does not allow wholly-owned foreign operations.
Public-private ventures are typical in the oil industry.
Public-private ventures are most important in market-driven economies.
The corollary approach is the final evolution a firm takes to become a global organization.
An important characteristic of a successful firm is its ability to match its strategy with a compatible organizational design.
The global design chosen by a firm reflects the relative importance of the three types of knowledge in the firm's operations.
Since selling to foreign customers is not fundamentally different from selling to domestic ones, a firm's export department can get by knowing only a little about foreign markets.
The global product design discourages duplication of functional-area skills.
Global area design is particularly useful for firms with a transnational corporate philosophy.
The global functional design is most effective when the firm has many products.
British Airways use the global customer design because it allows the firm to standardize its maintenance and flight procedures regardless of where a flight originates.
The global matrix design is the result of superimposing one form of organizational design on top of a different, existing form.
The global matrix design does not allow for flexibility.
The global matrix design is most appropriate for firms that operate in stable environments.
Most companies use a hybrid of the various organizational designs.
The level of decentralization or centralization used in a firm is fundamental to a firm's organizational design.
Empowering a subsidiary's board promotes centralization.
A group of managers from different parts of the world who are connected to one another in some way is called an informal management structure.
Informal management networks are typically powerless when it comes to short-circuiting bureaucracy.
The higher the level of interdependence among divisions and functions in a firm, the more coordination is required.
An auditor has the role of handling financial control in an international firm.
Responsibility control centers tend to follow a centralized decision-making system.
Responsibility center control means that the firm creates unique control systems for each SBU.
Operations control systems tend to be less specific and focused than strategic and organizational control systems.
This Japanese system is based on the belief that decisions cannot be made unilaterally, since it would be too individualistic and therefore destructive of group harmony.
This personality trait measures how much an individual believes that he/she is a worthwhile and deserving person.
Which of the following are the Big Five personality traits?
This is the relatively stable set of psychological attributes that distinguishes one person from another
This personality characteristic measures the extent that an individual believes that power and status differences are appropriate within hierarchical social systems like business organizations.
This model of motivation suggests that behavior that results in a positive outcome will likely be repeated under the same circumstances in the future.
This personality trait measures the extent that people believe their behavior has a real effect on what happens to them.
locus of control
This Big Five personality trait measures whether an individual is organized, systematic, responsible, and self-disciplined or not.
emotion stability & conscientiousness
This approach to motivation attempts to identify the specific need or set of needs that result in motivated behavior.
This Big 5 personality trait measures how willing an individual is to listen to new ideas and to change their own idea, beliefs, and attitudes as a result of new information.
This personality trait indicates a person's beliefs about his/her capabilities to perform a task.
This Big 5 personality trait measures how much an individual is poised, calm, resilient, and secure.
Who is credited with the theory of hierarchy of the following needs; physiological, security, social esteem, and self-actualization.
If a work-related task is complex a homogeneous team may be more effective because of the members' diverse backgrounds, experience, knowledge, and values.
Managers in less developed countries, like Indi, place a lower priority on satisfying self-esteem and security needs than do managers from more developed countries.
Attitude is the set of processes by which an individual becomes aware of and interprets information about the environment.
Power-tolerant cultures attach more legitimacy to hierarchical rank than do power-respecting cultures.
In power-respecting cultures, employees may expect leaders to take charge, make decisions, and tell them what to do, therefore leaders may need to concentrate on performance-oriented behaviors, avoid employee-oriented behaviors, and make little attempt to foster participation.
Where leaders tend to rely on formal power and authority to focus on administration and decision making, managers rely more on personal power and focus on motivation and communication.
The reinforcement model of motivation deals with how people assess the consequences of their behavioral choices.
Cultural generalities occur when an individual makes inferences about someone, because of one or more characteristics they possess.
Self-esteem has not been found to exist as a separate personality trait among people in Africa and the Middle East.
The expectancy theory is essentially a model of individual decisions regarding individual behavioral choices targeted at individual outcomes.
People from relatively individualistic and power-tolerant cultures are more likely to have an internal locus of control.
According to the needs-based model of motivation, U.S. managers working for Japanese MNCs have difficulty with the seniority, group-performance-oriented compensation systems of their employers.
High levels of job satisfaction do not necessarily lead to higher levels of performance.
Workers in passive goal behavior cultures may be more motivated by needs and rewards that can potentially enhance the quality of their lives
Satisficing suggests that managers sometimes adopt the first minimally acceptable alternative they identify, instead of investigating further.
A U.S. MNC that owns between 10% and 50% of a foreign firm's stock must use which method to value its ownership stake?
These are accounts created in a firm's financial reports to record foreseeable future expenses that might affect its operations.
If an American MNC is exposed to transaction exposure FASB Statement 52 requires that MNC to use what type of accounting approach on their financial statements?
This organization what formed in 2001 to harmonize the national treatment of various accounting issues for its 91 member countries.
International Accounting Standards Board
Which of the following are the two principle methods for valuing inventories?
first-in, first-out & last-in, first out
Which FASB Statement details the exchange rates and accounting procedures MNCs are to use in translating and then consolidating subsidiaries' financial statements denominated in a foreign currency?
What is the term for the process of changing a foreign subsidiary's financial statement into a statement using the currency of the parent company?
In which country is upward revaluation of assets illegal?
Which of the EU's directives, designed to harmonize the accounting policies of the Union, mandates that each member require its firms to adopt certain accounting practices and to ensure that financial statements provide a "true and fair view" of operations?
Which two countries are required by law to capitalize financial leases?
USA & Canada
These kind of financial statements are used to combine the operations of a parent company and its subsidiaries in a single set of accounting statements denominated in a single currency.
consolidated financial statements
In addition to the International Accounting Standards Board and the World Trade Organization, what other organization is currently attempting to adopt international accounting standards?
International Organization of National Securities Commission
When a firm acquires a second firm and pays more than the book value of the acquired firm's stock, what is the excess payment called?
Which two countries are considered common law countries?
USA & United Kingdom
Which EU directive, designed to harmonize the various accounting practices of its member, requires firms to publish consolidated financial statements?
Consolidation of financial statements is mandatory for U.S. firms, but not for German firms.
To avoid costly and lengthy litigation, many foreign MNCs have chosen to enter into advance pricing agreements with the IRS, where both sides agree in advance to the transfer prices the company will charge for intracorporate transactions.
Translation exposure refers to the effect of exchange rate fluctuations on the economic benefits and costs of an international transaction.
The price-to-earnings ratios of Japanese firms are frequently higher than those of U.S. firms, primarily because Japanese accounting practices often substantially reduce reported profits.
In a centrally planned economy the accounting system is driven by the need to provide output information to the state planners.
U.S. MNCs often use accelerated depreciation for financial-reporting, but not for tax purposes.
According to FASB Statement 52, a U.S. MNC that has a portfolio investment in a foreign firm of less than 10% must use the cost method for translating then consolidating subsidiaries' financial statements?
In times of high inflation, first-in-first-out (FIFO) method of valuing inventories tends to lower the MNC's reported costs of goods sold.
To translate a subsidiary's financial statements into the U.S. parent's home currency, the current rate method is used if the subsidiary's functional currency is the U.S. dollar.
Where French accountants are legally compelled to report to French prosecutors any criminal acts the accountants uncover, the USA system relies, to a greater extent, on private litigation.
Because of the dominance of tax law in accounting judgements, French firms are likely to bias their reported earnings and net assets downward to reduce their tax burdens.
In a market-oriented system, managers and investors require profit- and cost-oriented information from accountants.
U.S. firms can only capitalize R&D expenses in limited circumstances.
A controlled foreign corporation is a foreign corporation in which U.S. shareholders -- each with at least 10% of the firm's shares -- together own a majority of its stock.
Since German law requires that firms that use accelerated depreciation for tax purposes must also use it for financial reporting,, managers and investors need to be aware that the reported profits of a firm are this biased upward.
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