Question: 1. The sensitivity of demand for a

> Consider the various marketing misconceptions introduced in this chapter. a. Pick any two of the misconceptions and develop a specific example of each from your own experience with firms and brands. b. How will it be beneficial for a new marketing man

> 1. What is the name of the theory that says countries produce and export goods that require resources that are abundant and import goods that require resources in short supply? 2. Factor proportions theory divides a nation’s resources into what two categ

> 1. A nation that is able to produce a good more efficiently than other nations is said to have what? 2. What does a nation have when it is unable to produce a good more efficiently than other nations but it can produce the good more efficiently than it c

> 1. What did the successful implementation of mercantilism require? 2. Mercantilist nations acquired colonies around the world to serve as sources of 3. What name is given to the belief that a nation can increase its wealth only at the expense of other n

> 1. List several benefits of international trade? 2. World merchandise exports are valued at how many times the value of worldwide service exports? 3. What portion of total world merchandise trade is accounted for by two way trade between high income econ

> 1. During what time period did China undergo its most rigorous experience with central planning? 2. What challenges might pose a threat to China’s future economic performance? 3. Over what aspects of Russia’s centrally planned economy did planners exerci

> 1. How can a company incorporate political risk into its business strategies? 2. What is a good source of information to help conduct accurate political risk forecasting? 3. What might result from unfavorable political relations among countries?

> 1. How does political abroad risk affect companies? 2. Companies fear open violence and conflict abroad because it can threaten to do what? 3. What is the name given to the forced transfer of assets from a company to the government with compensation?

> 1. What does the economic transition process involve? 2. What are the key obstacles for countries in transition? 3. Transition replaces dependence on the government with greater emphasis on what?

> 1. An increase in the economic well-being, quality of life, and general welfare of a nation’s people is called what? 2. What are the drawbacks of using national production to measure economic development? 3. The human development index measures what aspe

> 1. The essence of which philosophy is captured by the expression, “When in Rome, do as the Romans do”? 2. Possible consequences of corruption include what? 3. What are some criteria a product must meet to be Fair Trade certified? 4. The environmental imp

> You are the CEO of a multinational corporation that operates in more than 100 nations worldwide. Recent changes in the global economy are redrawing many geographical and political borders. The growing interdependence of socially, politically, economicall

> 1. What are some examples of intellectual property rights? 2. What are the different types of industrial property? 3. Laws that hold manufacturers, sellers, individuals, and others responsible for damage, injury, or death caused by defective products ar

> 1. Which legal system decides cases by interpreting the law on the basis of tradition, precedent, and usage? 2. Which legal system is based on a detailed set of written rules and statutes that constitute a legal code? 3. A legal tradition based on religi

> 1. What factors contributed to the decline of centrally planned economies? 2. Which economic system strives toward low unemployment, low poverty, steady economic growth, and an equitable distribution of wealth? 3. Laissez-faire economics calls for less g

> 1. What features characterize the political ideology called pluralism? 2. Communists believe that a violent revolution is needed to seize control over resources, wish to eliminate political opposition, and do what else? 3. What does a representative demo

> 1. People living in different cultures often have different views regarding their what? 2. What is an example of cultural imperialism? 3. The Kluckhohn-Strodtbeck framework does investigate whether people do what? 4. In the Hofstede framework, the term “

> 1. Social structure embodies a culture’s fundamental organization, including what? 2. A person and his or her immediate relatives including parents and siblings, is called what? 3. The departure of highly educated people from one profession, region, or n

> 1. What are examples of values? 2. What type of custom might a conservative group oppose in a culture? 3. The law that restricts the gift giving by U.S. firms at home and abroad is called?

> 1. It helps to think about international business as four elements that occur within a what? 2. How does managing an international firm differ from managing a purely domestic business?

> 1. People opposed to globalization say that it does what to national cultures? 2. Regarding national sovereignty, opponents of globalization say that it does what? 3. With regard to the physical environment, what do globalization supporters argue?

> 1. Every culture has a communication system that it uses to convey what? 2. A special language understood by two parties who speak different native languages is called what? 3. An interesting fact about body language is what?

> The Caribbean nations do not participate in NAFTA and CAFTA-DR. Many people in southern U.S. states complain that NAFTA and CAFTA-DR are unfair to their extended families living on the Caribbean islands. Some experts argue that the term free trade agreem

> 1. Which denomination of Christianity has a “work ethic” named after it? 2. India is home to more than 90 percent of the adherents of which religion? 3. The Dalai Lama is the spiritual and political head of what religion?

> 1. What global organizations have helped expand globalization? 2. What technological innovations are helping to propel globalization? 3. What nations rank high in terms of globalization?

> 1. Globalization causes the institutions and economies of nations to become what? 2. What benefits might a company obtain from the globalization of markets? 3. Sustainability is development that meets present needs without compromising what?

> 1. How might a subculture differ from the dominant culture? 2. What do we call the belief that one man’s culture is superior to that of others? 3. What do we call detailed knowledge about a culture that enables a person to work happily within it?

> 1. Because labor–management relations are human relations they are rooted in what? 2. German workers have a direct say in the strategies and policies of their employers under a plan called what?

> 1. A manager who goes to work in an unstable country might receive a bonus called what? 2. Some factors that contribute to the compensation of expatriate managers include what?

> 1. What constitutes the most basic level of cultural training? 2. What type of training is said to get one “into the mind” of the local people?

> 1. The process of forecasting a company’s human resource needs and supply is called what? 2. When recruiting employees, from where can employers attract qualified applicants 3. Culture shock is a psychological process that affects people who live where?

> 1. A firm that staffs its operations abroad with home-country nationals uses a staffing policy called? 2. Polycentric staffing is when a company staffs its operations with people from where? 3. Geocentric staffing is typically reserved for whom?

> 1. In general, through what source do companies obtain financial resources? 2. A common way for non-U.S. companies to access U.S. capital markets is to issue what? 3. A firm’s mix of equity, debt, and internally generated funds that it uses to finance i

> You are the U.S. senator deciding whether to vote yes or no on a new legislation. The potential new law places restrictions on the practice of outsourcing work to low-wage countries and is designed to protect U.S. workers’ jobs. These days it is increasi

> 1. Why might a company strive for quality improvement? 2. The international certification that a company gets when it meets the highest quality standards in the industry is called what? 3. Under what conditions might a company reinvest earnings in its op

> 1. Vertical integration is the process by which a company extends its control over what? 2. Why might a company make a product in-house rather than buy it? 3. Why might a firm buy a product rather than make it in-house?

> 1. Assessing a firm’s ability to produce enough output to satisfy demand is called what? 2. Location economies can arise from the optimal execution of what? 3. What typically determines the process that a firm uses to create its product?

> 1. What makes worldwide pricing difficult to achieve? 2. To apply dual pricing successfully, how must a firm treat its domestic and international buyers? 3. Parent firms and subsidiaries often transfer products among themselves as a price called what?

> 1. What type of channel grants the right to sell a product to many resellers? 2. In terms of channel length, direct marketing is known as what? 3. A product with a low value density tends to have a distribution system that is more what?

> 1. A strategy that pressures channel members to carry and promoted a product is called what 2. Firms that standardize international advertising often control campaigns from where? 3. The process of sending promotional messages about products to target ma

> 1. Deciding whether to keep a marketing strategy the same or modify it a broad is also known as what? 2. What factors influence a country’s international product strategy? 3. What product characteristic is more likely than others to offend people in anot

> 1. When selecting a partner for cooperation it is important to remember what? 3. What factors may discourage an investment entry mode? 2. What factors may encourage an investment entry mode?

> 1. What is the name of a specific type of investment entry mode? 2. A wholly owned subsidiary is a facility owned and controlled by what? 3. What is the name of a specific type of joint venture? 4. A strategic alliance is similar to a joint venture excep

> 1. What is the name of a specific type of contractual entry mode? 2. What is it called when companies use agreements to exchange intangible property? 3. A disadvantage of both management contracts and turnkey projects is what?

> The National Foreign Trade Council (NFTC), a nonprofit trade and industry group based in Washington DC, won a court battle against the state of Massachusetts. In a unanimous decision, the U.S. Supreme Court sided with the NFTC and struck down a Massachus

> 1. Export/import financing that presents the most risk for exporters is called what? 2. Export/import financing in which a bank acts as an intermediary without financial risk is called what? 3. Export/import financing in which the importer’s bank issues

> 1. What are the four steps, in order, involved in creating an export strategy? 2. When a company sells its products to intermediaries who then resell to buyers in a target market it is call what? 3. What is the name of a specific type of countertrade?

> 1. Collecting and analyzing original data and applying the results to current research needs is called what? 2. A trade show is the same thing as what? 3. A firm researching a very unfamiliar but potentially very profitable market might be best to do wha

> 1. Obtaining information that already exists within or outside the company is called what? 2. What are possible sources of secondary research data? 3. What are potential problems that can arise with the use of secondary research data?

> 1. What is the first step in the screening process for potential markets and sites? 2. What forces should a company research when assessing a nation’s business environment? 3. Evaluating a product from a certain country as superior to similar products fr

> 1. What type of organizational structure tends to concentrate all international expertise in one division? 2. An organizational structure that divides worldwide operations according to a firm’s product areas is called what? 3. What do we call a group of

> 1. How a company divides its activities among separate units and coordinates activities among units is called what? 2. What type of decision making helps coordinate the operations of international subsidiaries? 3. What is the benefit of decentralized dec

> 1. What strategy involves adapting products and their marketing strategies to national markets to suit local preferences? 2. What is the benefit of using a global strategy? 3. Deciding on a general competitive strategy in the marketplace is the key to de

> 1. A written statement of why a company exists and what it plans to accomplish is called a what? 2. A special ability of a company that competitors find extremely difficult or impossible to equal is called a what? 3. Value-chain analysis involves separat

> You are a member of a World Trade Organization task force that is reviewing the recent banana conflict between the United States and the European Union. The European Union and the United States recently ended a nine-year battle over trade in bananas. The

> 1. An exchange rate system in which currencies float against one another with governments intervening to stabilize currencies at target rates is called what? 2. What do we call the arrangement whereby a nation lets its currency float within a margin arou

> 1. The gold standard is an example of what type of international monetary system? 2. What are the main advantages of the gold standard? 3. What is the name of the international monetary system that formed in 1944 following the demise of the gold standard

> 1. The principle that an identical item must have an identical price in all countries when price is expressed in a common currency is called what? 2. A unique aspect of purchasing power parity in the context of exchange rates is that it is only useful wh

> 1. For a country with a currency that is weakening (valued low relative to other countries), what will happen to the price of its exports and the price of its imports? 2. Unfavorable movements in exchange rates can be costly for business, so managers pre

> 1. Where does more than half of all global currency trading take place? 2. A currency used as an intermediary to convert funds between two other currencies is called what? 3. What is another name for a freely convertible currency? 4. Why do governments s

> 1. The numerator in a quoted exchange rate, or the currency with which another currency is to be purchased is called what? 2. What is the name given to the risk of adverse changes in exchange rates? 3. What do we call an exchange rate requiring delivery

> 1. What is the market in which currencies are bought and sold and their prices determined? 2. Insuring against potential losses that may result from adverse changes in exchange rates is called what? 3. What do we call the instantaneous purchase and sale

> 1. What type of financial instrument is traded in the international bond market? 2. The market of all stocks bought and sold outside the issuer’s home country is called what? 3. What does the Eurocurrency market consist of?

> 1. What is the purpose of the international capital market? 2. Unbundling and repacking hard-to-trade financial assets into more marketable financial instruments is called what? 3. What is the characteristic of an offshore financial center?

> 1. What are the stated aims of the Association of Southeast Asian Nations (ASEAN)? 2. The stated aims of which organization is not to build a trading bloc but instead to strengthen the multilateral trading system? 3. What is the name of the grouping of

> You are managing director of your U.S. firm’s subsidiary in southern France. The social welfare states of Western Europe were founded in the Second World War with specific ethical considerations in mind: reduce social and economic inequality, improve liv

> 1. Canada, Mexico, and the United States belong to the regional trading bloc called what? 2. What countries belong to the regional trading bloc called CAFTA-DR? 3. What is the name of Latin America’s most powerful regional trading bloc?

> 1. What is the name of the official single currency of the European Union? 2. A country may receive membership in the European Union once it meets what is called the what? 3. Why did nations belonging to the European Free Trade Association not want to jo

> 1. What is it called when countries in a region cooperate to reduce or eliminate barriers to the international flow of products, people and capital? 2. What are the names of the lowest and highest levels of regional economic integration? 3. An increase i

> 1. What policy instruments can host countries use to promote FDI? 2. What policy instruments can home countries use to promote FDI? 3. Ownership restrictions and performance demands are policy instruments used by whom to do what? 4. Differential tax rate

> 1. The national accounting system that records all receipts coming in to a nation and all payments to entities in other countries is called what? 2. Why might a host country intervene in foreign direct investment? 3. Why might a home country intervene in

> 1. Where adequate facilities are not present in a market, a firm may decide to undertake what? 2. A system in which a product’s components are made where cost of producing a component is lowest is called what? 3. What do we call the situation in which a

> 1. What imperfections are relevant to the discussion of market imperfections theory? 2. Location, ownership, and internationalization advantages combine which FDI theory? 3. Which FDI theory depicts a firm establishing a dominant market presence in an in

> 1. The purchase of physical assets or significant ownership of a company abroad to gain a measure of management control is called what? 2. What are the main drivers of foreign direct investment flows? 3. Why might a company engage in a cross-border merge

> 1. The first system of multilateral agreements to promote free trade was called what? 2. What are the main goals of the World Trade Organization? 3. Exporting a product at a price that is lower than that normally charged domestically or one that is lower

> 1. Why might a government impose a tariff on a product? 2. Why might a government impose a quota on a product? 3. A stipulation that a portion of a product be sourced domestically is called what?

> You are the proprietor of a fledgling computer graphics company in Shanghai, China. The sophisticated business application software you need for your business normally sells for 2,900 renminbi (around $350) at computer stores in Shanghai and online. But

> 1. Financial assistance from a government to domestic producers is called what? 2. What are the hoped-for outcomes of a foreign trade zone? 3. What are some of the ways that governments provide export financing?

> 1. Free trade is the pattern of imports and exports that occurs in the what? 2. For what political reasons does a government intervene in trade? 3. What are some economic reasons why a government intervenes in trade? 4. Some people see the products of wh

> 1. Chrysler engineers helped Toyota develop its Sienna minivan. In return, Toyota provided input on automobile production techniques to Chrysler. Why do you think Chrysler was willing to share its minivan know-how with a key competitor? 2. Considering fi

> 1. If you were Stephan Loerke, of the World Federation of Advertisers, how would you argue for the EU to enact stricter advertising laws? 2. Do you personally agree with the case you made above? 3. Thinking of a specific product sold in industrialized na

> 1. What strengths did AT&T bring to its joint venture with Unisource? 2. Can you think of any potential complications that could arise in the AT&T–Unisource joint venture? 3. Assess the formation of Global One, Unisource, and other partnerships in this c

> 1. When company founder Kamprad decided to expand into China his decision was not based on market research but, rather, on his own intuition. How well is IKEA doing in China? Did Kamprad’s decision pay off? 2. Relying on topics covered in this chapter, w

> 1. Argentina’s peso was linked to the U.S. dollar through a currency board for ten years before it was cut loose. Why did Argentina peg its currency to the dollar in the first place? 2. Companies encounter many difficulties in adapting their strategies t

> 1. How do you think countries with a high volume of exports to the United States, such as Mexico, would respond to stricter food-safety rules? Do you think such measures are a good way to stem the tide of food-related illnesses? Why or why not? 2. Some p

> 1. What are the pros and cons of Mercedes’ decision to abandon the culture and some of its home country practices? 2. What do you think were the chief factors involved in Mercedes’ decision to undertake FDI in the United States rather than build the M-cl

> 1. People love finding a bargain on their favorite items while shopping. But few people would likely want those items made in the home market (and expanding employment) if it meant paying a higher price for them. Do you agree with this sentiment? Explain

> You are the vice president of operations for a U.S.-based software firm that is exploring building a software design operation in India. Typically when international firms enter the Indian market, they quickly learn how a caste system can affect business

> 1. As the first to set up an international air express business in 1969, DHL had the first-mover advantage over other companies. Is being a first mover as advantageous for a service company such as DHL, as it is for a manufacturing company such as Boeing

> 1. Why do you think the Cuban government requires non-Cuban businesses to hire and pay workers only through the government? 2. Suppose Cuba’s government collapses and the nation embarks on a path of economic transition. How might Cuba’s experience diffe

> 1-What more do you think that the international business community could do to protect intellectual property rights? 2. Are international companies simply afraid to speak out against counterfeiting in potentially lucrative emerging markets for fear of be

> 1. If you worked for an international firm doing business in Asia, is there anything you would suggest to ease the tensions these cultures are experiencing? Be specific. 2. Social ills in any country are normally born from a multitude of factors. What ro

> 1. Some people outside the United States say teens exposed to large doses of U.S. youth culture on MTV will identify less with their own societies and teens in developing countries will want Western goods they cannot afford. MTV’s response: “It’s just fu

> 1. In addition to those mentioned in the case, what are some other advantages associated with the hiring of local managers in emerging markets? 2. What steps should a company take to ensure that, if taken to court, it can demonstrate that staffing cuts h

> You are an expatriate manager at a manufacturing facility in Asia on your first assignment abroad. You are aware of increasing concern among your employees (mostly young women) about wages that barely permit them to live at subsistence level. The plant i

> You are special assistant to the governor of a southeastern U.S. state in which unemployment (especially in rural areas) is well above the national average. After nearly three years in office and elected on a pledge to attract industry and create jobs, t

> You are chief operating officer of a U.S.-based telecommunications firm considering a joint venture inside China with a Chinese firm. The consultant you hired to help you through the negotiations has just informed you that ethical concerns can arise when

> 1. In the debate over jobs and wages, opponents of globalization say that it does what? 2. In the debate over jobs and wages, supporters of globalization say that it does what?

> 1. What is the value of goods and services that all nations of the world export every year? 2. A business that has direct investments in the form of marketing or manufacturing subsidiaries abroad in multiple countries is called a what? 3. A born global f

> 1. Evidence suggests that globalization can help developing nations boost incomes for their poorest citizens in what part of the debate over inequality? 2. In the debate over inequality between nations, evidence suggests that developing nations that are