Multiple Choice Questions

1. Becoming a world citizen includes being global in focus and learning how _____. 
 
A.  to increase workplace diversity
B.  not to be an "ugly American"
C.  to increase synergy
D.  to sing songs from other cultures and nations
E.  to speak several languages

Becoming a world citizen includes learning how not to be an "ugly American" as well as being global in
focus, but thinking local, learning what's appropriate behavior, knowing your field, and becoming at
least minimally skilled in the language. Appropriate behavior includes dressing professionally and
learning rituals of respect.

 
2. As part of becoming a world citizen, Joe, who is from Michigan and who is transferring to the Paris
office, is trying to do things to ___. 
 

A.  enhance the American global image of being a caring, wonderful person
B.  think local and keep a global focus
C.  enhance the American global image of being thrifty
D.  reinforce the American stereotype of being self-absorbed and quiet
E.  learn how not to be a "cheap American"

Becoming a world citizen includes learning how to study up on your host country's local customs and
try to meet new people who might help you in the future. You must be global in your focus, but think
local.

 
3. Last week Paul, CEO of Quality Furniture in South Carolina, traveled to Europe to visit customers.
While overseas, Paul checked his e-mail daily and visited his company's website to show to customers.
After visiting the last customer Friday morning, Paul was able to return to the corporate office to meet
with his board of directors that night. This "shrinking" of time and space with air travel and electronic
media defines ____. 
 

A.  the intranet

B.  synergy
C.  the small world philosophy
D.  e-commerce
E.  the global village

Global village refers to the "shrinking" of time and space as air travel and the electronic media have
made it easier for the people around the globe to communicate with one another.
 
4 According to Rosabeth Moss Kantor of the Harvard Business School, the events that set up conditions
for the global economy in the 1980s were when the ____. 
 

A.  Berlin Wall came down, countries worldwide opened their economies to foreign investors, and there
was a worldwide trend of governments regulating their economies
B.  Berlin Wall was built, Asian countries formed their own stock market, and NAFTA was
implemented
C.  Berlin Wall came down, Asian countries opened their economies to foreign investors, and there was
a worldwide trend of governments deregulating their economies
D.  governments of China and India considered implementing certain aspects of capitalism
E.  Berlin Wall came down, and NAFTA and CAFTA were implemented

In the late 1980s when the Berlin Wall came down, it signaled the beginning of the end of communism
in Eastern Europe. It was also when Asian countries began to open their economies to foreign investors.
Finally, the trend toward governments deregulating their economies began sweeping the globe. These
three events set up conditions by which goods, people, and money could move more freely throughout
the world, or a global economy.

 
5. Technology philosopher Nicholas Negroponte proposed that the global market driven by electronic
information "_____." 
 

A.  causes products to become more expensive

B.  increases diversity yet results in culture shock within organizations
C.  results in new laws but less synergy and ethical behavior
D.  causes increases in goods but decreases in product quality
E.  forces things to get bigger and smaller at the same time

According to technology philosopher Nicholas Negroponte, in the global market driven by electronic
information, the global market driven by electronic information "forces things to get bigger and smaller
at the same time, there will be an increasing absence of things that aren't either very local or very
global." If Negroponte is correct, it means we will see more of two opposite kinds of businesses:
mergers of huge companies into even larger companies, and small, fast-moving start-up companies.

 
6. Tom, who owns a successful business with two locations and a few international clients, was
approached by a large organization about dramatically expanding his company. Tom later told his wife
that he is happy with his success, but he wants to stay small because if he decides to add new products,
small companies ____. 
 

A.  take more time to start new endeavors

B.  typically maneuver slowly with new ideas
C.  can get started more easily and maneuver faster
D.  tend to not change due to inexperienced management
E.  can adjust more easily to capital shortages

The Internet and the World Wide Web allow almost anyone to be global, which has two important
results: (1) small companies can get started more easily, and (2) small companies can maneuver faster.
For example, a small company can be extremely responsive to tax code changes.

7. Hannah, an engineer for an oil company, is interested in working overseas at this stage of her life
because she knows that foreign work experience demonstrates ____ to potential employers. 
 

A.  independence, resourcefulness, and discipline

B.  good management skills
C.  independence and strong leadership skills
D.  independence, resourcefulness, and entrepreneurship
E.  discipline and a strong will

Foreign experience demonstrates independence, resourcefulness, and entrepreneurship, according to

management recruiters.

 
 
8. Tops Burger, based out of Texas, has locations in 25 countries. Tops is a ____. 
 

A.  multinational corporation

B.  conglomerate
C.  multinational organization
D.  foreign partner
E.  foreign firm

A multinational corporation, or multinational enterprise, is a business firm with operations in several

countries.

 
9. Shoes International is a global nonprofit organization that works with schools and various companies to
donate shoes to children in poverty throughout the world. Shoes International is an example of a ____. 
 

A.  multinational corporation

B.  conglomerate
C.  foreign firm
D.  philanthropic corporation
E.  multinational organization

A multinational organization is a nonprofit organization with operations in several countries. Examples

are the World Health Organization, the International Red Cross, and the Church of Latter-day Saints.

10. John, a construction manager, has been having problems finding quality employees in some of his
foreign offices. While speaking with his attorney, Alisha, he mentioned that "in our locations overseas,
many of our good employees have been quitting, and as you know, we have numerous lawsuits over
personnel policies." Alisha explained that historically, these types of issues are a result of ____ policies. 
 

A.  geocentric
B.  ethnocentric
C.  synergy
D.  MBO
E.  polycentric

A survey of 918 companies with home offices in the United States, Japan, and Europe found that
ethnocentric policies were linked to such problems as recruiting difficulties, high turnover rates, and
lawsuits over personnel policies.

 
11. Ethnocentrism is also known as _____. 
 

A.  geocentrism
B.  ecocentrism
C.  parochialism
D.  open-mindedness
E.  a flexible management style

Parochialism is a narrow view in which people see things solely through their own perspective.

 
12. George, a regional manager for a global corporation, is meeting with several upset managers from the
Rome plant about Steve, the Rome facility manager originally from Florida. Phillipe, the assistant
manager, tells George "We all feel that Steve only sees things his way and very seldom considers our
perspective on things." Steve's management style can be described as ____. 
 

A.  synergy-based
B.  ecocentricism
C.  geocentrism
D.  polycentrism
E.  parochialism

Parochialism is a narrow view in which people see things solely through their own perspective.

13. Maria, the vice president of sales for an international organization, believes that employees in her
foreign offices understand best how to handle the personnel and practices in their offices. So when the
corporate HR manager approached Maria about scolding Robert, the Paris, manager, for not doings
things according to corporate policy, Maria backed Robert and said, "I believe that the home office
should leave Robert alone because he best understands the local culture." Maria is an example of a(n)
___ manager. 
 

A.  ethnocentric
B.  global
C.  native
D.  polycentric
E.  paraochial

Polycentric managers take the view that native managers in the foreign offices best understand native
personnel and practices, and so the home office should leave them alone.

 
14. Roberto, the vice president of marketing, is talking to Francis, a sales manager in a foreign office, about
several local situations that Francis's reps are facing in their territory. Roberto tells Francis that he
believes there are differences and similarities between home and foreign personnel and practices, and
that Francis should use whatever techniques are most effective. Trey is an example of a(n) ____
manager. 
 

A.  parochial
B.  ethnocentric
C.  global
D.  geocentric
E.  polycentric

Geocentric managers accept that there are differences and similarities between home and foreign
personnel and practices and that they should use whatever techniques are most effective.

15. Like other international companies, Jane is interested in expanding her candle business globally
primarily to ___. 
 

A.  take advantage of supplies, new markets, and lower labor costs
B.  take advantage of supplies, new markets, and a diverse workforce
C.  implement tariffs and import quotas
D.  utilize export embargos to increase business
E.  increase synergy and diversity

Companies expand internationally to take advantage of availability of supplies, new markets, lower
labor costs, access to finance capital, or avoidance of tariffs and import quotas.

16. Mexican manufacturing plants with low labor costs and special privileges given to their American
owners in return for employing Mexican citizens are known as ____. 
 

A.  diversedoras
B.  barterists
C.  globalists
D.  internationldoras
E.  maquiladoras

American companies have found it cheaper to do their manufacturing outside the United States. For
example, the rationale for using maquiladoras, which are manufacturing plants allowed to operate in
Mexico with special privileges in return for employing Mexican citizens, is that they provide less
expensive labor for assembling many types of manufactured goods.

 
17. Dominique owns an international grocery store where customers can purchase products from other
countries. Dominique's store is an example of a company that ____. 
 
A.  exports
B.  globalizes
C.  inputs
D.  imports
E.  countertrades

When importing, a company buys goods outside the country and resells them domestically.

 
18. Alice's Pasta Kitchen makes quality pasta and sells its products to customers in other countries. This is
an example of ____. 
 

A.  bartering
B.  countermarketing
C.  exporting
D.  dumping
E.  importing

When exporting, a company produces goods domestically and sells them outside the country.

 
19. Don's Carpet installed carpet at no cost for City Office Supply, in exchange for $1,000 of office
supplies. This is an example of ____. 
 

A.  outsourcing
B.  sourcing
C.  inputting
D.  countertrading
E.  importing

Countertrading is bartering goods for goods.

 
20. Countertrading is ___ goods for goods. 
 

A.  outsourcing
B.  sourcing
C.  bartering
D.  selling
E.  licensing

Countertrading is bartering goods for goods.

 
21. Licensing is when a company ____. 
 

A.  allows another company to pay it a fee to train its employees

B.  allows a foreign company to pay it a fee to make or distribute the first company's product or service
C.  pays a competitor a fee to avoid a company's territory
D.  develops a strategic plan for another organization
E.  barters goods for goods in lieu of a monetary payment

In licensing, a company allows a foreign company to pay it a fee to make or distribute the first
company's product or service.

 
22. Luxere Hotels International, an American company, sells the rights to other hospitality companies
globally to open hotels with the Luxere name for a fee and a share of the profit, in return for using
Luxere's brand name and a package of materials and services. This defines ____. 
 

A.  franchising
B.  importing
C.  offshoring
D.  exporting
E.  countertrading

Franchising is a form of licensing in which a company allows a foreign company to pay it a fee and a
share of the profit in return for using the first company's brand name and a package of materials and
services.

 
23. Technology Experts is a U.S. company that specializes in IT research. It has formed a joint venture with
Processor Inc., a Canadian organization that has a reputation of producing quality PCs, to market laptops
in China, sharing the risks and rewards of starting the new enterprise together. This is an example of
a(n) ___. 
 

A.  strategic alliance

B.  global strategy
C.  export strategy
D.  import strategy
E.  franchising strategy

A U.S. firm may form a joint venture, also known as a strategic alliance, with a foreign company to
share the risks and rewards of starting a new enterprise together in a foreign country.

 
24. Sometimes a country's laws forbid foreigners from ownership within their nation, and the only way an
American company can have a presence in that foreign country is with a(n) ___. 
 

A.  export agreement

B.  MBO pact
C.  import agreement
D.  bartering union
E.  joint venture

A U.S. firm may form a joint venture, also known as a strategic alliance, with a foreign company to
share the risks and rewards of starting a new enterprise together in a foreign country. Sometimes a joint
venture is the only way an American company can have a presence in a certain country, whose laws may
forbid foreigners from ownership. Indeed, in China this is the only way foreign cars may be sold in that
country.

25. Donald enjoys the excitement and challenge of forming a firm in Europe that is totally owned and
controlled by his company because he knows that although the investment will be substantial, it could
result in a large return. This type of organization is an example of a ____. 
 

A.  joint venture

B.  total investment agreement
C.  strategic alliance
D.  wholly-owned subsidiary
E.  maquiladoras

A wholly owned subsidiary is a foreign subsidiary that is totally owned and controlled by an
organization. The foreign subsidiary may be an existing company that is purchased outright.

 
26. Free trade is the ____. 
 

A.  movement of customers between nations that do not have trade embargoes
B.  policy of cost-free exchange of goods
C.  bartering of goods or services locally or globally
D.  bartering or sale of goods without taxes
E.  movement of products between countries without political or economic obstruction

Free trade is the movement of goods and services among nations without political or economic
obstruction.

27. The United States uses government regulations, such as tariffs, embargoes, and import quotas, to limit
the import of goods and services and protect their U.S. industries against foreign competition. This use
of these regulations is known as ____. 
 

A.  domestic protectionism

B.  blocking
C.  trade protectionism
D.  dumping
E.  export protectionism

Countries often use trade protectionism, which is the use of government regulations to limit the import
of goods and services to protect their domestic industries against foreign competition. Tariffs,
embargoes, and import quotas are among the measures used in protectionism.

28. A tax on automobiles imported into the United States that raises prices on imported vehicles to make the
price of cars produced here more competitive is a(n) ______; a tax on all oil imported into the United
States, which is implemented to raise money for the American government, is known as a(n) ____. 
 

A.  protective tariff; revenue tariff

B.  revenue tariff; protective tariff
C.  quota tariff; revenue tariff
D.  embargo agreement; income tariff
E.  import barrier; income tariff

There are two types of tariffs: One is a protective tariff, which is intended to raise the price of imported
goods to make the prices of domestic products more competitive. The other, a revenue tariff, is designed
simply to raise money for the government, such as a tax on all oil imported into the United States.

 
29. An import quota is a(n) ____. 
 

A.  trade barrier

B.  embargo
C.  trade encouragement
D.  export fee
E.  type of dumping

An import quota is a trade barrier in the form of a limit on the numbers of a product that can be
imported.

  

30. Quotas are designed to prevent _____. 

 

A.  outsourcing
B.  tariffs
C.  exporting
D.  an embargo
E.  dumping

Quotas are designed to prevent dumping, which is the practice of a foreign company's exporting
products abroad at a lower price than the price in the home market—or even below the costs of
production—to drive down the price of the domestic product.

31. The WTO was formed to ____. 

 

A.  oversee worldwide mergers

B.  monitor business start-ups globally
C.  monitor and enforce trade agreements
D.  scrutinize multinational organizations
E.  keep an eye on working terrorists

The World Trade Organization (WTO) is designed to monitor and enforce trade agreements.

 
32. The World Bank is the principal organization that ______. 
 

A.  finances worldwide mergers

B.  provides low-interest loans for improvements in developing nations
C.  provides banking operations for multinational organizations
D.  provides loans to developed nations
E.  monitors banks and credit unions globally

Today the purpose of the World Bank is to provide low-interest loans to developing nations for
improving transportation, education, health, and telecommunications.

 
 

33 The trading bloc consisting of 28 trading partners in Europe is the ____. 

 

A.  APEC
B.  GAT
T
C.  European Union
D.  Eastern Union
E.  Atlantic-Mediterranean Union

The European Union (EU) consists of 28 trading partners in Europe.

34. ASEAN is a(n) _____. 

 

A.  trading bloc consisting of 10 countries in Asia

B.  association of American and Southeast Asian nations
C.  trading bloc consisting of 10 countries along the Atlantic Ocean
D.  worldwide banking association
E.  union of global nations that strives to bring world peace

The Association of Southeast Asian Nations (ASEAN) is a trading bloc consisting of 10 countries in
Asia: Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar (Burma), the Philippines, Singapore,
Thailand, and Vietnam.

 
35. A nation's culture is ________. 
 

A.  the shared set of beliefs, values, knowledge, and patterns of behavior common to its people
B.  a favorable trading agreement toward other nations
C.  a shared set of business traditions common to the nation
D.  its constitution and written codes of behavior
E.  the laws that are accepted as good morally by most of the citizens

A nation's culture is the shared set of beliefs, values, knowledge, and patterns of behavior common to a
group of people.

36. In a low-context culture ____. 

 

A.  e-mail is a very popular method of communicating

B.  citizens prefer to meet face-to-face rather than electronically
C.  shared meanings are primarily derived from written and spoken words
D.  meanings are primarily derived from situational cues
E.  life moves at a very slow pace

A person from North America, Great Britain, Scandinavia, Germany, or Switzerland, for example,
comes from a low-context culture in which shared meanings are primarily derived from written and
spoken words.

37. Anna, the owner of a café, attended an entrepreneurial conference where they spoke about in-group
collectivism from the GLOBE project, which expresses ____. 
 

A.  how much patriotism and loyalty people should have for their country
B.  the degree to which a society's members expect power to be unequally shared
C.  the extent that individuals are encouraged and rewarded for group loyalty versus pursuing individual
goals
D.  the extent to which a society encourages investment in the future, as by planning and saving
E.  how much pride and loyalty people should have for their family or organization

In-group collectivism is how much pride and loyalty people should have for their family or
organization. In contrast to individualism, in-group collectivism expresses the extent to which people
should take pride in being members of their family, circle of close friends, and their work organization.

 
 
 38. When communicating across cultures, the best option regarding language use is _____. 
 

A.  learn the local language

B.  assume that business is always conducted in English
C.  employ a translator
D.  rely on the goodwill and knowledge of others
E.  use a translation app or device

In communicating across cultures you have four options: (a) You can speak your own language. (The
average American believes that about half the world can speak English, when actually it's close to 18%.)
(b) You can use a translator. (Try to get one who will be loyal to you rather than to your overseas host.)
(c) You can try using a translation app, such as Google Translate, that turns a smartphone into an
interpreter, although this can be cumbersome. (d) You can learn the local language—by far the best
option.

 
39 Monochronic time is a ___. 
 

A.  preference for multitasking

B.  desire to do as little as possible for a period of time
C.  time of chronic, frequent errors
D.  time when little is accomplished
E.  preference for doing one thing at a time

Monochronic time is a preference for doing one thing at a time. In this perception, time is viewed as
being limited, precisely segmented, and schedule driven.

 
40. Tom and his fiancé Susan decided to have their wedding on a beach in Acapulco, Mexico. Some
services for the wedding, such as the limousine and the catering services, were local. Throughout the
weekend of the wedding, the couple found that workers and things for their wedding arrived late. In
response, the Mexican workers remarked, "Ustedes tiene que ser flexibles," which in English means,
you have to be flexible with time. This attitude regarding time is considered _____. 
 

A.  inflexible
B.  polychornic time
C.  cultural time
D.  monochronic time
E.  one-dimensional

Polychronic time is a preference for doing more than one thing at a time. Time is viewed as being
flexible and multidimensional. This outlook on time is the kind that prevails in Mediterranean, Latin
American, and especially Arab cultures.

 
41. A government's seizure of a domestic or foreign company's assets is known as ____. 
 

A.  expropriation
B.  diversification
C.  outsourcing
D.  embargoing
E.  globalizing

Expropriation is defined as a government's seizure of a domestic or foreign company's assets.