Chapter 1 (multiple choice)

The increased internationalization of business requires __________ to have a basic knowledge of international business.

•  all managers
  

• managers of multinationals

• managers of transnationals

• managers of purely domestic operations

There is an emphatic need for all business people to have a basic knowledge of ____________.

•  foreign travel

• international business

• the Pacific Rim

• foreign exchange

Foreign business denotes ____________.

• a business whose activities involve crossing national borders.

• the domestic operations within a foreign country.

• an organization with multi-country affiliates.

• an organization that attempts to standardize operations worldwide.

A global company is defined as an organization that attempts to have a worldwide presence in its market, to standardize operations worldwide in one or more of the firm's functional areas, and to integrate its operations worldwide. According to this definition, a global firm's management ____________.

• looks for differences among markets

• avoids maintaining a presence in key markets

• uses domestic products, raw materials and financing whenever possible

• searches the world for market opportunities

A multidomestic company is ____________.

• an organization that attempts to standardize and integrate operations worldwide in all functional areas

• the same as a global company

• an organization with multi-country affiliates, each of which formulates its own business strategy based on perceived market differences

• an organization that standardizes and integrates operations on a domestic basis

Which of the following is not a major kind of driver leading international firms to the globalization of their operations?

• Political

• Market

• Environmental

• Technology

The most common definition of globalization is that of ____________.

• political globalization - the international integration of political laws and customs

• geographical globalization - the international integration of countries in geographical proximity to one another

• cultural globalization - the international integration of people with similar cultural characteristics

• economic globalization - the international integration of goods, technology, labor, and capital

Advances in computers and communications technology are permitting an increased flow of ideas and information across borders. This enables ____________.

• manufacturing personnel to concentrate more on domestic production

• customers to learn about foreign goods

• sellers of products to travel to more locations worldwide in search of buyers

• advertisers to focus more on specific countries where demand is the greatest

One of management's goals is utilizing economies of scale to reduce unit costs. Which of the following would not necessarily result in economics of scale being realized?

• Globalizing product lines to reduce development costs.

• Locating production in countries where the costs of the factors of production are lower.

• Locating production in countries where the labor force is the most highly educated.

• Globalizing product lines to reduce production and inventory costs.

International business differs from domestic business in that a firm operating across borders must deal with the forces of three kinds of environments. Which of the following is not one of the three kinds of environments?

• Domestic

• Foreign

• International

• Local