Overview of International Business

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Questions and Answers

What is the fundamental characteristic of international business?

Government regulations on domestic trade.
Business transactions occurring within a single country.
Exclusively the import of goods from one country to another.
Business transactions between parties from multiple countries. (correct)

Which of the following is NOT typically considered a key difference between domestic and international business?

Boundaries
Legal Systems
Internal company hierarchy (correct)
Availability of Resources

Studying international business is essential for which of these reasons?

It eliminates all risks associated with international investments.
It guarantees a high-paying job immediately after graduation.
It provides knowledge and skills essential for navigating today's global business environment. (correct)
It is required by all business schools regardless of relevance.

Which of the following is NOT a primary driver of globalization?

Geographical isolation (D) Signup and view all the answers

According to Friedman (2000), what is the core concept of globalization?

The integration of markets, nation-states, and technologies. (D) Signup and view all the answers

Five main reasons international trade/business happen include all EXCEPT:

Similarities in consumer demand (D) Signup and view all the answers

What is a key strategic imperative driving contemporary globalization?

Leveraging a firm's core competencies in new markets. (D) Signup and view all the answers

Which activity is classified as an international business activity?

A firm engaging in international franchising. (A) Signup and view all the answers

What differentiates Foreign Direct Investment (FDI) from Foreign Portfolio Investment (FPI)?

FDI involves active control of foreign operations, while FPI is a passive investment in foreign financial assets. (C) Signup and view all the answers

In the context of international business, what does 'exporting' primarily involve?

Selling products made in one's own country for use or resale in other countries. (A) Signup and view all the answers

A company grants the rights to its trademark and operational systems to a foreign entity. This is an example of:

International Licensing (C) Signup and view all the answers

Which of the following is the best description of an emerging market in the context of the global economy?

A market characterized by rapid growth and industrialization. (A) Signup and view all the answers

What is the primary distinction between a Multinational Corporation (MNC), a Multinational Enterprise (MNE), and a Multinational Organization (MNO)?

An MNC is strictly for-profit, while an MNE can include both for-profit and non-profit activities, and an MNO is primarily non-profit. (C) Signup and view all the answers

Referring to the provided data (2011), which country had the highest percentage of exports of goods and services as a percentage of GDP?

Netherlands (B) Signup and view all the answers

Which of the following is the most subtle and potentially damaging impact of globalization on domestic markets?

The erosion of unique cultural identities due to the homogenization of consumer preferences. (C) Signup and view all the answers

What critical factor distinguishes successful international business managers from their domestic counterparts?

A deep understanding of diverse cultural, legal, and economic environments. (B) Signup and view all the answers

Assume a US-based company discovers a new, highly efficient manufacturing process. Which international business activity would BEST allow them to capitalize on this innovation quickly with minimal capital investment?

Entering into international licensing agreements with foreign manufacturers. (D) Signup and view all the answers

Consider a scenario where a multinational corporation (MNC) faces conflicting ethical standards between its home country and the host country where it operates. Which approach would BEST demonstrate a commitment to responsible international business practices?

Adopting a framework that balances respect for local customs with adherence to fundamental ethical principles, such as human rights and environmental protection. (B) Signup and view all the answers

A major international sporting event is primarily sponsored by multinational corporations (MNCs) from developed countries. This scenario BEST exemplifies which potential negative consequence of globalization for emerging markets?

The displacement of local businesses and cultural events by dominant global brands. (C) Signup and view all the answers

A luxury goods company is considering expanding into a new international market. Extensive market research reveals a significant segment of consumers who highly value exclusivity and are willing to pay a premium for it. However, the country has weak intellectual property laws and a history of counterfeiting. Which entry strategy would MOST effectively balance the company's desire to capitalize on the market opportunity with the need to protect its brand?

Employ a 'slow and steady' approach, focusing on building a strong brand image through carefully selected partnerships and distribution channels, while actively monitoring and enforcing intellectual property rights. (C) Signup and view all the answers

Signup and view all the answers

Flashcards

International Business

Business transactions between parties from more than one country.

Key Differences: Domestic vs. International Business

Differences in boundaries, currencies, cultures, legal systems, availability of resources, and skills & knowledge.

Why study International Business

Provides essential knowledge, skills, career assessments, competitive edge, techniques, tools, and cultural literacy in today's business environment.

What initiates international business

Driven by wider consumer tastes and differences in technology, resources, demand, economies of scale, and government policies.