International Business

Context & Strategies

7/24 Review Session

Which of the following is not an advantage of large scale entry?

a) May cause rivals to rethink entry

b) Better chances to capture first mover advantage

c) Shows customers and vendors your committed to the market

d) Gives the firm time to learn about the market and reduce risk

Question 1

What is the main disadvantage of a wholly owned subsidiary?

a) Risk of losing intellectual property to a partner

b) May not realize scale economies

c) Poor quality control

d) Bear full cost and risk

Question 2

Alliances are popular for all of the following reasons except:

a) It’s a good way to secure access to foreign markets

b) It circumvents local ownership restrictions

c) Competitors get low cost access to technology and markets

d) The company may not have the resources to do it alone

Question 3

A letter of credit is issued on behalf of the:

a) Exporter

b) Importer

c) Shipping Company

d) Customs Agency

Question 4

Which of the following is not a function of the Export Import Bank?

a) Provides loan and loan-guarantee programs

b) Provides credit insurance in case importer defaults

c) Makes commercial banks more willing to lend to foreign enterprises

d) Lends money to foreign borrowers to purchase U.S. products

Question 5

Which of the following is not a benefit of the ethnocentric human resources policy?

a) Overcomes lack of qualified managers in host nation

b) Unified culture

c) Helps transfer core competencies

d) Equips executives to work in a number of cultures

Question 6

What is the greatest contributor to US multinational expatriate failures?

a) manager’s personal immaturity

b) Inability to cope with larger overseas’ responsibility

c) Inability of the spouse to adjust

d) Manager’s inability to adjust

Question 7

What is the most common method to determine expatriate compensation?

a) Porter’s Diamond

b) ExIm Bank Index of Foreign Pay

c) Balance Sheet Approach

d) Same as origin country

Question 8

Which of the following is not a disadvantage of the geocentric policy?

a) National immigration policies may limit implementation

b) Leads to cultural shortsightedness

c) Expensive to implement

d) Compensation structure can be a problem

Question 9

Which of the following is the definition of an offset?a) Direct exchange of two goods and services between two parties

without a cash transaction

b) One party agrees to purchase goods and services with a specified percentage of the proceeds from the original sale and may purchase in any of the nations involved in the transaction

c) One party agrees to purchase goods and services with a portion of the proceeds from the original sale and must purchase in a specific nation

d) When a third-party trading house buys the firms counterpurchase credits and sells them to another firm that can better use them

Question 10

Final Project Questions Questions?