Title: Globalization and Business
Course: Question Banks

Q: The ________ oversees the implementation and administration of agreements between member nations.
- World Bank
- International Monetary Fund
- World Trade Organization (WTO)
A: World Trade Organization (WTO)

Q: As a result of globalization, business are able to outsource, moving manufacturing to the country with
- the lowest tariffs.
- the best roads and port infrastructure.
- the cheapest labor.
A: the cheapest labor.

Q: The North American Free Trade Agreement (NAFTA) between ________ allows for tariff reductions or eliminations. The agreement has been very good for consumers and some industries like automobile manufacturing. But it also displaced some manufacturing workers.
- the United States, Mexico, and Brazil
- the United States and Canada
- the United States, Canada, and Mexico
A: the United States, Canada, and Mexico

Q: In the United States, old t-shirts may be donated to secondhand stores. Because shipping rates are ________, the stores can make a profit shipping the t-shirts to Africa.
- low
- high
- very low
A: very low

Q: Hewlett-Packard (HP) is one of the world’s largest technology companies and has one of the industry’s most extensive supply chains. Comprising more than 1,000 production suppliers and tens of thousands of nonproduction suppliers, it spans 6 continents, more than 45 countries and territories, and many cultures. HP’s suppliers compete
- in North America.
- in the United States and Europe.
- across the globe.
A: across the globe.

Q: In 2015, Calvin Klein looked to Ethiopia to manufacture its clothing. Pay was as low as $21 a month there. The work was
- exploitation of desperate workers.
- not competitive in the world market.
- good for workers in Ethiopia.
A: good for workers in Ethiopia.

Q: Which is true about the Apple iPhone?
- The iPhone parts are made in China.
- The iPhone parts are made in 3 different countries.
- The iPhone parts are made in over 20 different countries.
A: The iPhone parts are made in over 20 different countries.

Q: In 2007, Microsoft (MS) had a dominant share of the cell phone market. MS was displaced by Research-in-Motion (RIM), maker of the BlackBerry phone, in 2010. RIM was replaced by Android phones and the Apple iPhone. For a tech company, doing the same thing is
- not a competitive advantage because consumers expect change.
- not sustainable because the technology becomes obsolete.
- not a viable option because another company is working on the next big thing.
A: not a viable option because another company is working on the next big thing.

Q: Easy communication through the Internet is changing the organization of some activities. The traditional hotel industry now competes with Airbnb. Airbnb is a platform for renting out a room in your house. Analysts suggest that hotels may partner with Airbnb by listing properties with them. To succeed, organizations must
- undercut startups before they gain market share.
- reduce prices to stay attractive to consumers.
- continually adapt and apply new strategies.
A: continually adapt and apply new strategies.

Q: A franchiser like McDonald’s risks a loss of quality control in foreign countries. The franchiser must ensure that the local owner/manager can implement the quality control measures to safeguard the corporate brand. The franchiser’s
- investment risk is higher because of quality issues.
- knowledge of the local markets can mitigate this risk.
- financial risk is lower because he need not make a direct investment.
A: financial risk is lower because he need not make a direct investment.

Q: SAIC General Motors Corporation Limited is a joint venture between General Motors Company and SAIC Motor that manufactures and sells Chevrolet, Buick, and Cadillac brand automobiles in mainland China. SAIC Motor Corporation Limited is a Chinese state-owned automotive design and manufacturing company. One advantage of this arrangement is that
- each partner bears the costs of running a business.
- General Motors and SAIC can independently measure their contributions.
- each partner carries part of the burden of costs to start and run the joint company.
A: each partner carries part of the burden of costs to start and run the joint company.

Q: An international team of scholars researching a theory of the relationship between culture and societal, organizational, and leadership effectiveness from 62 different societal cultures is known as:
- the WORLD project
- the PLANET project
- the GLOBE project
A: the GLOBE project

Q: The GLOBE project identified differences in national culture. These nine dimensions include
- assertiveness, past orientation, and humane orientation.
- assertiveness, future orientation, and human orientation.
- assertiveness, future orientation, and humane orientation.
A: assertiveness, future orientation, and humane orientation.

Q: The German car company, Daimler-Benz, merged with Chrysler in 1998. Cultural differences and organizational culture are both acknowledged to have played a role in the failure of the merger. Daimler was a German company that could be described as “conservative, efficient and safe,” while Chrysler was known as “daring, diverse, and creative.” The attitude toward hierarchy was different as well. Daimler was heavily hierarchical, with a clear chain of command and respect for authority. Chrysler, on the other hand, was more team-oriented and egalitarian in its approach. Daimler valued reliability and achieving the highest levels of quality, while Chrysler relied on catchy designs and offering cars at competitive prices. These cultural differences led to conflicting orders and goals in different departments. The difference in the two companies’ views of reliability vs. competitive pricing is an example of:
- human orientation
- gender egalitarianism
- future orientation
A: future orientation

Q: When General Motors and SAIC Motor created their joint venture in 1997, the employees noticed cultural differences influencing their planning. The employees of SAIC Motor, a Chinese company, could be described as patient investors focused on organizational success, and they had a more rigid organization. General Motors employees were said to be looking for quick wins with an eye on personal success as well as the venture's success, and more egalitarian in their treatment of colleagues. In the GLOBE analysis, the difference in quick wins vs. patient investors describes what dimension?
- assertiveness
- uncertainty avoidance
- future orientation
A: future orientation

Q: Bunge Limited supplies the world with agricultural commodities, such as grains and oilseeds. Corn grown in the USA is sent to Japan, Mexico, and South America. Bunge international activities are managed from its headquarters in White Plains, New York. Bunge’s global strategy is
- standardization.
- transnational.
- exporting.
A: exporting.

Q: An export strategy is used when a global company
- treats the whole world as one market with little meaningful variation.
- adapts to local needs and markets.
- does not intend to expand globally but does export some products.
A: does not intend to expand globally but does export some products.

Q: A ________ strategy produces efficiencies by centralizing many common activities, such as product design and technical expertise, gaining production economies of scale, simplifying the supply chain, and reducing marketing costs.
- exporting
- multidomestic
- standardization
A: standardization

Q: Today, ABB is a Swedish-Swiss multinational corporation headquartered in Zürich, Switzerland, operating in robotics and in the power and automation technology areas. ABB was created from the merger of ASEA (Swedish) and BBC (Swiss) in 1967. The joint companies made lights and generators. Although electrical outlets differed by country, customers are primarily concerned with function and efficiency. ABB’s strategy, at this time, was
- exporting.
- transnational.
- standardization.
A: standardization.

Q: Starbucks operates in 62 countries around the world. It tailors its products and services to the needs of each market. Marketing strategy is shaped by local culture. Even the taste of the coffee changes for local preferences. The company's decision to open branches in foreign markets is based on research information on customer traffic and local real estate. Starbucks uses a
- transnational strategy.
- standardization strategy.
- multidomestic strategy.
A: multidomestic strategy.

Q: A global company uses a multidomestic strategy when it
- does not intend to expand globally but does export some products.
- treats the whole world as one market with little meaningful variation.
- adapts to local needs and markets.
A: adapts to local needs and markets.

Q: Unilever sells consumer products around the world. They produce Dove soap, for example. The company thinks globally and acts locally. The nature of products requires a close relationship with local customers; yet economies of scale justify a number of head-office departments, and the need to benefit globally from everybody’s creativity and experience makes sharing information highly desirable. Unilever combines product expertise and local knowledge in a deliberate
- multidomestic strategy.
- exporting strategy.
- transnational strategy.
A: transnational strategy.

Q: Today, ABB is a Swedish-Swiss multinational corporation headquartered in Zürich, Switzerland, operating in robotics and in the power and automation technology areas. The robotics industry requires high investment costs in developing the new technology and in manufacturing facilities. ABB would like to spread these costs over as large a customer base as possible. But each customer also requires small adaptations to their way of doing things. For its robotics business, ABB needs
- a multidomestic strategy.
- a standardization strategy.
- a transnational strategy.
A: a transnational strategy.

Q: Training an employee for an overseas assignment represents a significant investment for the company. The cost of a three-year assignment averages $1 million. The first and usually least expensive step is textbook and classroom learning, also called
- cultural simulation training
- rigorous training.
- documentary training.
A: documentary training.

Q: International assignment management is one of the most challenging tasks for HR professionals to master—and one of the most costly. Yet many international organizations fail at it. Companies report a 42 percent failure rate in these assignments. That is expensive, when the average cost of a three-year assignment
- can easily exceed $3 million.
- rarely exceeds $500,000.
- averages about $1 million.
A: averages about $1 million.