Question 1

The crowding of a foreign market to prevent competitors' advantages is known as ________.

Accepted Answer

A)  oligopolistic reaction
B)  concentration strategy
C)  liability of foreignness
D)  a harvesting strategyE) B) and C)
F) A) and B)

Question 2

Which of the following best explains why U.S.firms typically place earlier and greater emphasis on expansion into Canada and the United Kingdom?

Accepted Answer

A)  most significant sales opportunities
B)  similarities in culture and legal systems
C)  availability of necessary natural resources
D)  government incentives for allied nationsE) C) and D)
F) All of the above

Question 3

Losses to companies from natural disasters are much less risky than losses from operating in violent areas.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following statements is NOT true about risk as it affects companies' choice of locations for foreign operations?

Accepted Answer

A)  Companies and their managers differ in their perception of what is risky.
B)  One company's risk may be another company's opportunity.
C)  There are means to reduce risk other than avoiding locations.
D)  Companies choose the cheapest location regardless of risks.E) B) and C)
F) A) and D) D

Question 5

When income inequality is high in a specific country, the per capita GDP figures are more meaningful.

Accepted Answer

A) True 
 B)False

Question 6

Risks to companies from natural disasters and communicable diseases are ________.

Accepted Answer

A)  evenly distributed around the world
B)  more complicated today because of publicity
C)  a minor issue to global firms because of insurance
D)  most prevalent in the poorest countries of the worldE) None of the above
F) C) and D)

Question 7

Profit figures for individual country operations may obscure the real impact those operations have on total global performance.

Accepted Answer

A) True 
 B)False

Question 8

The concept of liquidity preference in international operations refers to ________.

Accepted Answer

A)  a company's willingness to accept a lower rate of return on investments in countries where it can more easily sell them and convert the proceeds at a favorable rate
B)  a company's willingness to accept lower rates of return in poor countries that really need the investments
C)  management's need to maintain sufficient funds, preferably in local currency, in each country of operation to ensure meeting daily cash needs
D)  investors' preference for foreign stocks over foreign bonds because of the larger market for themE) All of the above
F) A) and B)

Question 9

Committing resources to one country usually means forgoing or delaying projects in others.

Accepted Answer

A) True 
 B)False

Question 10

Comparability of economic information among countries is hampered by countries' use of different definitions for similar terms.

Accepted Answer

A) True 
 B)False

Question 11

The origin of investment proposals differs from the origin of divestment proposals in that the divestment proposals are more likely to come from ________.

Accepted Answer

A)  subsidiary management
B)  outside the organization
C)  higher up in the organization
D)  line personnel as opposed to staff personnelE) A) and C)
F) B) and C)

Question 12

What is scanning? What opportunities and risks are most relevant to scanning?

Accepted Answer

To compare countries, managers use scann...

Question 13

Headquarters management often feels that people within an established operation are the best judge of the operation's investment needs.

Accepted Answer

A) True 
 B)False  True

Question 14

Compare the advantages of locating foreign operations to avoid where competitors have gone versus locating where competitors are.

Accepted Answer

By being the first major competitor in a...

Question 15

Grids are a useful method of comparing countries for international business expansion because they ________.

Accepted Answer

A)  generally show how countries will perform in the future
B)  show risk on one axis and opportunity on another
C)  set minimum scores for proceeding further
D)  highlight first-mover advantagesE) B) and D)
F) A) and C) C

Question 16

In which of the following situations would tax rate differences among countries be most important for deciding where to place an investment?

Accepted Answer

A)  Companies find advantages in being located near specialized private and public institutions.
B)  Companies must compare the benefits of labor- versus capital-intensive production.
C)  Companies want to serve an entire region within a regional trading bloc.
D)  Companies must deal with difficult start-up regulations.E) All of the above
F) A) and C)

Question 17

Why do most companies examine expansion proposals one at a time rather than comparing various expansion proposals? Do you think this is effective? Why or why not?

Accepted Answer

Three major factors restricting companie...

Question 18

Which of the following BEST explains why foreign subsidiary managers are often reluctant to propose divestments in the countries where they are working?

Accepted Answer

A)  They are afraid of proposing the elimination of their jobs.
B)  They are usually poorly trained in how to sell units or how to close them down.
C)  They are too nationalistic to examine political risk objectively.
D)  Many are in countries where the cultural attribute of power-distance is very high.E) A) and B)
F) A) and C)

Question 19

We now have technology to allow people to communicate globally without traveling as much.Leading researchers on urbanization and planning suggest that the most likely consequence of this is ________.

Accepted Answer

A)  a decrease in international airline travel
B)  a decreased need for immigration restrictions
C)  a smaller number of retirees living in urban areas
D)  a greater number of self-motivated workers e-mailing and teleconferencing with colleaguesE) A) and B)
F) A) and C)

Question 20

In a diversification strategy for international expansion, a company would move ________.

Accepted Answer

A)  rapidly into many foreign countries, and then gradually increase its presence in those countries
B)  rapidly into a few foreign countries with many of its products and most of its resources
C)  into one foreign country and fully expand its product lines in that country before moving to another country
D)  quickly into a regional foreign market but build up its resources in only a few of the countries in the regionE) A) and D)
F) B) and D)

Exam 13: Country Evaluation and Selection

The crowding of a foreign market to prevent competitors' advantages is known as ________.

Correct AnswerverifiedShow Answer

Which of the following best explains why U.S.firms typically place earlier and greater emphasis on expansion into Canada and the United Kingdom?

Correct AnswerverifiedShow Answer

Losses to companies from natural disasters are much less risky than losses from operating in violent areas.

Correct AnswerverifiedShow Answer

Which of the following statements is NOT true about risk as it affects companies' choice of locations for foreign operations?

Correct AnswerverifiedD

When income inequality is high in a specific country, the per capita GDP figures are more meaningful.

Correct AnswerverifiedShow Answer

Risks to companies from natural disasters and communicable diseases are ________.

Correct AnswerverifiedShow Answer

Profit figures for individual country operations may obscure the real impact those operations have on total global performance.

Correct AnswerverifiedShow Answer

The concept of liquidity preference in international operations refers to ________.

Correct AnswerverifiedShow Answer

Committing resources to one country usually means forgoing or delaying projects in others.

Correct AnswerverifiedShow Answer

Comparability of economic information among countries is hampered by countries' use of different definitions for similar terms.

Correct AnswerverifiedShow Answer

The origin of investment proposals differs from the origin of divestment proposals in that the divestment proposals are more likely to come from ________.

Correct AnswerverifiedShow Answer

What is scanning? What opportunities and risks are most relevant to scanning?

Correct AnswerverifiedTo compare countries, managers use scann...View AnswerShow Answer

Headquarters management often feels that people within an established operation are the best judge of the operation's investment needs.

Correct AnswerverifiedTrue

Compare the advantages of locating foreign operations to avoid where competitors have gone versus locating where competitors are.

Correct AnswerverifiedBy being the first major competitor in a...View AnswerShow Answer

Grids are a useful method of comparing countries for international business expansion because they ________.

Correct AnswerverifiedC

In which of the following situations would tax rate differences among countries be most important for deciding where to place an investment?

Correct AnswerverifiedShow Answer

Why do most companies examine expansion proposals one at a time rather than comparing various expansion proposals? Do you think this is effective? Why or why not?

Correct AnswerverifiedThree major factors restricting companie...View AnswerShow Answer

Which of the following BEST explains why foreign subsidiary managers are often reluctant to propose divestments in the countries where they are working?

Correct AnswerverifiedShow Answer

We now have technology to allow people to communicate globally without traveling as much.Leading researchers on urbanization and planning suggest that the most likely consequence of this is ________.

Correct AnswerverifiedShow Answer

In a diversification strategy for international expansion, a company would move ________.

Correct AnswerverifiedShow Answer

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To compare countries, managers use scann...
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True

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By being the first major competitor in a...
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C

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Three major factors restricting companie...
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