Exam Prep Chapter 5 Global Management and Cultural Diversity

Ch05: Global Management and Cultural Diversity

True/False

1. The growing interdependence among elements of the global economy is known as diversification.

Learning Objective: 5.1

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. Most global firms use a planning technique called political-risk analysis to forecast the probability of disruptive events that can threaten the security of foreign investments.

Learning Objective: 5.1

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. Cultural awareness is an important characteristic of a truly global manager.

Learning Objective: 5.1

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. Sigma Inc. conducts for-profit transactions of goods and services across national boundaries. Sigma Inc. is an example of an international business.

Learning Objective: 5.1

Difficulty: Moderate

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. A common first step into international business is global sourcing.

Learning Objective: 5.1

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. Most manufacturers today shy away from using global sourcing owing to the growing concerns over issues related to quality.

Learning Objective: 5.1

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. In exporting, local products are sold to foreign customers.

Learning Objective: 5.1

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. Franchising refers to acquiring products from abroad and selling them in domestic markets.

Learning Objective: 5.1

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. China’s foreign direct investment in the U.S. has led to the creation of many jobs in China. This is an example of insourcing.

Learning Objective: 5.1

Difficulty: Moderate

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Comprehension

1. A foreign subsidiary is a foreign operation completely owned and controlled by a local firm.

Learning Objective: 5.1

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. A foreign subsidiary represents the lowest level of involvement in international operations.

Learning Objective: 5.1

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. Tariffs are basically taxes that governments impose on imports.

Learning Objective: 5.1

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. The goal of most tariffs is to protect local firms from foreign competition.

Learning Objective: 5.1

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. NAFTA was formed by the United Kingdom, France, and Germany.

Learning Objective: 5.1

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. Executives of transnationals view the entire world as their domain for acquiring resources.

Learning Objective: 5.2

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. Extraction of excessive profits by global corporations is a potential host-country cost.

Learning Objective: 5.2

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. Long hours of work and poor working conditions are prevalent in sweatshops.

Learning Objective: 5.2

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. Nigel is very proud of his British culture and tends to view other cultures as potentially inferior to his own. This is an example of ethnocentrism.

Learning Objective: 5.3

Difficulty: Moderate

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. Knowledge about foreign cultures is known as cultural intelligence.

Learning Objective: 5.3

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. In low-context cultures, what is actually said or written may convey only part, and sometimes a very small part, of the real message.

Learning Objective: 5.3

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. Most communication in low-context cultures takes place via the written or spoken word.

Learning Objective: 5.3

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. Members of monochronic cultures are more flexible in their views of time than those of polychronic cultures.

Learning Objective: 5.3

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. Members of polychronic cultures do not approve of coming late or bringing an uninvited guest.

Learning Objective: 5.3

Difficulty: Moderate

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. Proxemics is the study of how people use space to communicate.

Learning Objective: 5.3

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. Tight cultures are characterized by clear and rigid social norms.

Learning Objective: 5.3

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. In a tight culture, deviations from norms tend to be tolerated.

Learning Objective: 5.3

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. The ecological fallacy refers to the belief that a generalized cultural value, such as individualism, does not apply equally to all members of that culture.

Learning Objective: 5.3

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. People in high-power-distance cultures tend to be tolerant of power and are prone to follow orders.

Learning Objective: 5.3

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. People in high uncertainty-avoidance cultures prefer structure in their lives.

Learning Objective: 5.3

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. Intercultural competencies are skills that help an individual to function successfully in cross-cultural situations.

Learning Objective: 5.4

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

Multiple Choice

1. Which of the following is an effect of globalization?
2. Reducing cooperation among nations in the global economy
3. Weakening economic integration across countries
4. Reducing interdependence among the components in the global economy
5. Increasing the importance of nation states
6. Creating a borderless world where economic integration becomes extreme

Learning Objective: 5.1

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. _____ involves managing business and organizations with interests in more than one country.
2. Global management
3. Territorial management
4. Reshoring
5. Insourcing
6. Economic development

Learning Objective: 5.1

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. Which of the following is a common reason for doing international business?
2. Reducing imports
3. Accessing lower-cost labor
4. Boosting domestic demand
5. Establishing market monopoly
6. Promoting ethnocentrism

Learning Objective: 5.1

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. Ronald is planning to expand his family business internationally and is currently in the process of purchasing materials, manufacturing components, and locating business services around the world. Which of the following best describes his actions?
2. Global sourcing
3. Insourcing
4. Licensing
5. Franchising
6. Outsourcing

Learning Objective: 5.1

Difficulty: Hard

AACSB: Analytical thinking

Bloom’s Taxonomy: Comprehension

1. Sasha, a wealthy industrialist, owns several coffee plantations in Brazil. Encouraged by the rising sales figures in the domestic market, Sasha decides to sell her local brand of coffee in markets around the world. Which of the following terms is applicable to this business strategy?
2. Importing
3. Insourcing
4. Franchising
5. Exporting
6. Licensing

Learning Objective: 5.1

Difficulty: Hard

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. The growth of export industries _____ the exporting country.
2. reduces imports in
3. provides low-cost labor in
4. creates local jobs in
5. increases financial resources for
6. leads to an excess supply of products in

Learning Objective: 5.1

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. When Veriol Inc., a pharmaceuticals company, bought the rights of manufacturing and selling Nocturne Pharma’s vitamin supplement, Vita Plus, in Mexico, Veriol Inc. engaged in _____.
2. exporting
3. global sourcing
4. franchising
5. insourcing
6. licensing

Learning Objective: 5.1

Difficulty: Hard

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. In _____, the foreign firm buys the rights to use another’s name and operating methods in its home country.
2. insourcing
3. franchising
4. global sourcing
5. exporting
6. offshoring

Learning Objective: 5.1

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. Which of the following terms is used to describe local job creation that results from foreign direct investment?
2. Restructuring
3. Franchising
4. Offshoring
5. Insourcing
6. Horizontal integration

Learning Objective: 5.1

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. When Miriam Inc., a handbag manufacturer headquartered in the U.S., decided to invest in Japan, it tied up with a Japanese fashion house in order to pool resources, share risks, and operate the new business together. This is an example of _____.
2. a joint venture
3. a foreign subsidiary
4. a greenfield venture
5. diversification
6. product development

Learning Objective: 5.1

Difficulty: Hard

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. A(n) _____ is a local operation completely owned and controlled by a foreign firm.
2. franchise
3. sweatshop
4. foreign subsidiary
5. global strategic alliance
6. export house

Learning Objective: 5.1

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. Cases presented before the World Trade Organization for resolution are likely to involve disputes regarding _____.
2. cultural appropriateness
3. restructures
4. cultural distance
5. ecological fallacy
6. tariffs

Learning Objective: 5.1

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. _____ are taxes governments levy on imports from abroad.
2. Excise duties
3. Tariffs
4. Pay-offs
5. Corporate taxes
6. Subsidies

Learning Objective: 5.1

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. The goal of most tariffs is to:
2. improve present working conditions.
3. protect transnational corporations from political risks.
4. diversify the existing jobs.
5. protect local firms from foreign competition.
6. create jobs for foreign workers.

Learning Objective: 5.1

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. Which of the following countries was part of NAFTA?
2. Canada
3. United Kingdom
4. Germany
5. Spain
6. France

Learning Objective: 5.1

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. Arguments against NAFTA blame the organization for:
2. lower productivity of U.S. manufacturers.
3. lower cross-border trade.
4. substantial job losses to Mexico.
5. substantial job losses to the U.S.
6. deterioration of the Mexican business environment.

Learning Objective: 5.1

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. NAFTA was renegotiated as the ____.
2. APEC
3. ASEAN
4. EU
5. SADC
6. USMCA

Learning Objective: 5.1

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. Which of the following is true with regard to the European Union (EU)?
2. There is an absence of common consensus between the member states of EU with regard to political integration.
3. All the member states of the EU have adopted the Euro as the common currency.
4. The common currency of the EU is a weak competitor of the U.S. dollar.
5. The EU members are supposed to give one another most favored nation status.
6. The EU is a regional economic and political alliance of global importance.

Learning Objective: 5.1

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. A _____ is an MNE that operates worldwide on a borderless basis.
2. franchise
3. transnational corporation
4. foreign subsidiary
5. greenfield venture
6. limited liability company

Learning Objective: 5.2

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. Which of the following is one of the potential host-country benefits?
2. Smaller tax base
3. Interference with the governments
4. Economic domination
5. Introduction of new industries
6. Exploitation of natural resources

Learning Objective: 5.2

Difficulty: Moderate

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Comprehension

1. Home-country criticisms of global firms include complaints about:
2. interference with the local government.
3. hiring the most talented local personnel away from domestic firms.
4. failure to transfer advanced technologies to the host country.
5. sending investment capital abroad and corruption.
6. poor working conditions for employees.

Learning Objective: 5.2

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. _____ involves illegal practices to further one’s business interests.
2. Corruption
3. Ethnocentrism
4. Polycentrism
5. Proxemics
6. Ecological fallacy

Learning Objective: 5.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. The Foreign Corrupt Practices Act (FCPA) makes it illegal for:
2. countries who are not members of the EU to invest in the U.S.
3. U.S. firms to invest overseas in businesses.
4. foreign firms to offer nonmonetary gifts to U.S. officials.
5. foreign firms to offer bribes to U.S. firms.
6. U.S. firms and their representatives to offer bribes overseas.

Learning Objective: 5.2

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. Which of the following is an example of child labor?
2. A 13-year-old boy accompanying his mother to the carpet factory where she works
3. A 10-year-old boy working in a chemical factory
4. A 10-year-old girl helping her younger brother with schoolwork
5. A 13-year-old boy earning $10 for helping his father pick strawberries
6. A 19-year-old girl working as a salesgirl in the local supermarket

Learning Objective: 5.2

Difficulty: Moderate

AACSB: Analytical thinking

Bloom’s Taxonomy: Comprehension

1. What are sweatshops?
2. Local business operations that expand internationally through foreign direct investment
3. Arbitrating firms that settle labor disputes between employees and employers
4. Business operations that employ workers at low wages for long hours in poor working conditions
5. Foreign firms that hire talented local personnel for training others in the host country
6. Foreign firms that are engaged in rampant corruption and bribery to gain easy access to the local resource pool

Learning Objective: 5.2

Difficulty: Moderate

AACSB: Analytical thinking

Bloom’s Taxonomy: Comprehension

1. Which of the following is a characteristic of a sweatshop?
2. Poor working conditions
3. High wages
4. Low power distance
5. High degree of foreign investment
6. Strong ethics

Learning Objective: 5.2

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. Which of the following is an example of a sweatshop?
2. Bane & Packhard, an American law firm, opened its branch in Taiwan as part of its business expansion strategy.
3. Rosenberg Inc., a pharmaceuticals company, bought the rights to manufacture and sell a fertility drug in Greenland from Kremline Pharmaceuticals.
4. Patron Wave, an electronic device manufacturing company, housed its employees in poor conditions and also overworked them.
5. Big Sell, a supermarket, sourced its canned fishes from Asia at a far lower price than most of its local competitors.
6. Mammoth InfoTech refused to increase the annual wages of its employees citing poor financial results in the last quarter.

Learning Objective: 5.2

Difficulty: Moderate

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. Why are some scarce minerals known as conflict minerals?
2. They bring in greater foreign investments.
3. They are found in abundance.
4. The money from their sales is used to fund armed violence.
5. The source of these minerals is easy to trace back.
6. They are available for a cheap price.

Learning Objective: 5.2

Difficulty: Moderate

AACSB: Analytical thinking

Bloom’s Taxonomy: Comprehension

1. _____ is a shared set of beliefs, values, and patterns of behavior common to a group of people.
2. Culture
3. Meme
4. Folklore
5. Conduct
6. Morality

Learning Objective: 5.3

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Which of the following is true about culture?
2. Culture is a set of legal codes.
3. Culture is an irrelevant factor in international business.
4. Culture is not common to a group of people.
5. Culture remains static over time.
6. Cultural miscues can be costly in international business.

Learning Objective: 5.3

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. An American executive goes to Yemen to finalize a business deal. He hands over his documents to his Yemeni host with his left hand, which Muslims in Yemen consider unclean. Moreover, he refuses to accept the dry fruits that he is offered, a behavior that deeply offends his host. As a result, the American loses the business deal to his Australian counterpart who was better versed in Yemeni ways. The lack of understanding of _____ is most likely to have resulted in the loss of business for the American executive.
2. the business trends in Yemen
3. Yemeni dress code
4. the business laws in Yemen
5. Yemeni culture
6. the banking system in Yemeni

Learning Objective: 5.3

Difficulty: Hard

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. _____ is the confusion and discomfort a person experiences when in an unfamiliar culture.
2. Cultural appropriation
3. Culture shock
4. Cultural assimilation
5. Cultural relativism
6. Culture phobia

Learning Objective: 5.3

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. Culture shock is:
2. an extreme amount of hatred and rejection of foreign cultures.
3. an individual’s failure to comply with the codes of his or her culture.
4. an assumption that one’s own culture is superior to that of others.
5. an assumption that one’s own culture is inferior to that of others.
6. a certain level of discomfort a person experiences when in an unfamiliar culture.

Learning Objective: 5.3

Difficulty: Moderate

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Comprehension

1. Ilda Bach, an elderly German woman, decides to visit her friend living in Indonesia after many decades. Having never visited the country before, she feels confused, anxious, uncomfortable, and in need of information and advice during her stay. She is most likely experiencing _____.
2. claustrophobia
3. culture shock
4. cognitive dissonance
5. acculturation
6. boredom

Learning Objective: 5.3

Difficulty: Hard

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. _____ is the tendency to consider one’s culture superior to that of others.
2. Regiocentrism
3. Isolationism
4. Geocentrism
5. Ethnocentrism
6. Polycentrism

Learning Objective: 5.3

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. Which of the following is a trait of ethnocentrism?
2. Showing no concern for the cultures of others
3. Being eager to adopt the elements of foreign cultures
4. Showing a preference for foreign cultural values to one’s own
5. Respecting ethnic minorities and their culture
6. Failing to comply with the cultural values of one’s own group

Learning Objective: 5.3

Difficulty: Moderate

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Comprehension

1. John, an American national, was sent to India as part of a cultural exchange program from his university. On his arrival in India, he did not respond to his host who greeted him by joining his hands. He also declined the tea that was offered, emphasizing a cultural preference for coffee. He felt that his ways and culture were far superior to the ones in the host country. In this scenario, John displayed _____.
2. polycentrism
3. idealism
4. ethnocentrism
5. feudalism
6. collectivism

Learning Objective: 5.3

Difficulty: Hard

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. _____ is the ability to accept and adapt to new cultures.
2. Cultural imperialism
3. Cultural intelligence
4. Ethnocentrism
5. Cultural myopia
6. Cultural appropriation

Learning Objective: 5.3

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. People with cultural intelligence:
2. are flexible in dealing with cultural differences.
3. are uncomfortable with cultural differences.
4. view one’s culture as superior to that of others.
5. view one’s culture as inferior to that of others.
6. are eager to adopt the values of foreign cultures.

Learning Objective: 5.3

Difficulty: Moderate

AACSB: Analytical thinking

Bloom’s Taxonomy: Comprehension

1. Someone high in cultural intelligence views cultural differences as _____.
2. threats
3. ethical dilemmas
4. learning opportunities
5. moral dilemmas
6. barriers to learning

Learning Objective: 5.3

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. The capacities to listen, observe, and learn are the building blocks of cultural intelligence. These skills and competencies can be developed by better understanding what the anthropologist Edward T. Hall calls the “_____” languages of culture.
2. graphic
3. silent
4. transformative
5. spectacular
6. vocal

Learning Objective: 5.3

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. _____ cultures emphasize communication via spoken or written words.
2. High-context
3. Popular
4. High femininity
5. Low-context
6. Monochronic

Learning Objective: 5.3

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. People who tend to say or write what they mean and mean what they say belong to _____ cultures.
2. high-context
3. popular
4. low-context
5. mass
6. global

Learning Objective: 5.3

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. In _____ cultures, what is actually said or written may convey only part, and sometimes a very small part, of the real message.
2. low-context
3. monochronic
4. polychronic
5. popular
6. high-context

Learning Objective: 5.3

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. Which of the following is true with regard to people in high-context cultures?
2. They rely on situational cues as well as on spoken or written words.
3. The main part of the real message is conveyed by what is actually said.
4. Body language is ignored in the communication process.
5. They emphasize the importance of doing one thing at a time.
6. They focus on using time to accomplish many different things at once.

Learning Objective: 5.3

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. Cultures where it is possible to begin making business deals only after social relationships are established are referred to as _____ cultures.
2. ethnocentric
3. high-context
4. xenocentric
5. polychronic
6. popular

Learning Objective: 5.3

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. Monochronic cultures focus on _____.
2. gestures
3. written language
4. social context
5. time
6. space

Learning Objective: 5.3

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. In _____ cultures, people tend to do one thing at a time.
2. ethnocentric
3. xenocentric
4. monochronic
5. popular
6. high-context

Learning Objective: 5.3

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. Most businesspeople in the United States schedule meetings with specific people and focus on a specific agenda for an allotted time. This is characteristic of a(n) _____ culture.
2. polychronic
3. low-context
4. ethnocentric
5. high-context
6. monochronic

Learning Objective: 5.3

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. In _____ cultures, time is used to accomplish many different things at once.
2. polychronic
3. ethnocentric
4. low-context
5. high-context
6. monochronic

Learning Objective: 5.3

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. Which of the following is true about members of polychronic cultures?
2. They are known to be punctual without exception.
3. They do only one thing at a time.
4. They are flexible in their views of time.
5. They regard time as the primary focus of business.
6. They have a pre-determined sequence of agenda.

Learning Objective: 5.3

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. Oskar Gassner, a German businessman, decided to meet one of his clients in the latter’s office in Abu Dhabi. He was frustrated to find that after an initial warm greeting, his client continued to deal with the continuous stream of visitors flowing in and out of his office. Gassner concluded that he was not being given the dedicated attention he deserved. This is because Gassner closely identifies his working style with the _____ cultural values.
2. low-context
3. monochronic
4. high-context
5. xenocentric
6. polychronic

Learning Objective: 5.3

Difficulty: Hard

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. _____ is the study of how people use space to communicate.
2. Proxemics
3. Kinesics
4. Haptics
5. Chronemics
6. Vocalics

Learning Objective: 5.3

Difficulty: Easy

AACSB: Written and oral communication

Bloom’s Taxonomy: Knowledge

1. Which of the following is true about proxemics?
2. It studies the importance of time in the context of business.
3. It emphasizes the importance of gestures in the communication process.
4. It emphasizes verbal communication.
5. It focuses on the use of space in communication.
6. It focuses on the comparative analysis of the cultural traits of different groups.

Learning Objective: 5.3

Difficulty: Easy

AACSB: Written and oral communication

Bloom’s Taxonomy: Knowledge

1. Ray is currently writing his doctoral thesis, which is a comparative study on the use and treatment of physical space in communication between people across cultures. His thesis is a study on _____.
2. haptics
3. kinesics
4. vocalics
5. chronemics
6. proxemics

Learning Objective: 5.3

Difficulty: Hard

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. Which of the following describes cultural tightness-looseness?
2. The ability to accept and adapt to new cultures
3. The strength of social norms and tolerance for deviations
4. The confusion and discomfort a person experiences when in an unfamiliar culture
5. The tendency to consider one’s culture superior to others
6. The tendency to rely on nonverbal and situational cues

Learning Objective: 5.3

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. Which of the following is one of the focuses of cultural tightness-looseness?
2. The tolerance that exists for any deviations from norms
3. The superiority of home country values over a foreign culture
4. The first interaction with a new culture and the anxieties associated with it
5. The time when a new culture becomes the subject of one’s criticism
6. The ability to interpret the real message from what is being said

Learning Objective: 5.3

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. In a _____ culture, people guide their behavior according to expectations set by prevailing social norms.
2. low-context
3. loose
4. monochronic
5. polychronic
6. tight

Learning Objective: 5.3

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. Which of the following countries has a tight culture?
2. Netherlands
3. United States
4. Malaysia
5. Australia
6. New Zealand

Learning Objective: 5.3

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. The goal set by tight cultures is to:
2. fit in.
3. stand out.
4. remain complacent.
5. attract attention.
6. disregard the social norms.

Learning Objective: 5.3

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. In a loose culture, _____.
2. people adhere to the social norms
3. people are expected to fit in
4. people are discouraged to speak out
5. deviations from norms are tolerated
6. conformity to social norms is uniform and absolute

Learning Objective: 5.3

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. Which of the following countries has a loose culture?
2. South Korea
3. Australia
4. Japan
5. Malaysia
6. Singapore

Learning Objective: 5.3

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. Which of the following is true about loose cultures?
2. A high degree of conformity to social norms is present.
3. Tolerance for deviation is absent.
4. The goal is to fit into the societal expectations.
5. Social norms are narrow and unambiguous.
6. Non-criminal deviations from norms tend to be tolerated.

Learning Objective: 5.3

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. A mix of cultural tightness and looseness in a cross-cultural team may require a team leader and team members to create an environment with_____.
2. synchronized performance
3. consistent productivity
4. chances for everyone to contribute and experience satisfaction
5. conflict avoidance
6. uniform volunteer opportunities and high inclination to volunteer

Learning Objective: 5.3

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. In a cross-cultural team, a member from the loose culture may show an inclination for which of the following?
2. Looking toward formal authority for direction
3. Criticizing others
4. Being slow to volunteer
5. Being slow to display emotion
6. Always being on time

Learning Objective: 5.3

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. Which of the following is a cultural dimension identified by Geert Hofstede?
2. Social orientation
3. Cultural intelligence
4. Social context
5. Uncertainty avoidance
6. Socialization

Learning Objective: 5.3

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. The _____ assumes that a generalized cultural value applies equally well to all members of the culture.
2. ecological fallacy
3. naturalist theory
4. etymological theory
5. definist culture
6. existential process

Learning Objective: 5.3

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. Kiera, a resident of Ukraine, decides to travel to the United States for a vacation. Her impression about Americans, who she thinks are strongly individualistic without exception, derives from Stephan. Stephan was once Kiera’s tenant and the only American she has ever met. Stephan is in the danger of falling prey to the _____.
2. regression fallacy
3. ethical dilemma
4. Samaritan’s dilemma
5. existential fallacy
6. ecological fallacy

Learning Objective: 5.3

Difficulty: Hard

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. _____ is the degree to which a society accepts unequal distribution of power.
2. Masculinity–femininity
3. Proxemics
4. Power distance
5. Individualism–collectivism
6. Power tactics

Learning Objective: 5.3

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Which of the following is true about people in high-power-distance cultures?
2. They do not accept differences in rank.
3. They tend to be tolerant of power.
4. They display a narrow perception of the mind.
5. They display egalitarian relationships.
6. They have no respect for the elderly.

Learning Objective: 5.3

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. The extensive use of words like “I” and “me” in conversations and meetings reflect a cultural tendency toward _____.
2. collectivism
3. nationalism
4. masculinity
5. individualism
6. socialism

Learning Objective: 5.3

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. _____ had the highest individualism score of any country in Hofstede’s data.
2. The United States
3. The United Kingdom
4. Canada
5. Australia
6. China

Learning Objective: 5.3

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. _____ is the degree to which a society tolerates risk and change.
2. Culture shock
3. Cultural assimilation
4. Imperialism
5. Power distance
6. Uncertainty avoidance

Learning Objective: 5.3

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. In high uncertainty-avoidance cultures, one would expect to find a preference for _____.
2. openness to change
3. innovation
4. predictability
5. openness to risk
6. ambiguity

Learning Objective: 5.3

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. Members of low uncertainty-avoidance cultures display:
2. apathy toward innovation.
3. affinity for rules.
4. preference for structure.
5. openness to change.
6. rigidity toward change.

Learning Objective: 5.3

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. Vincent Melville, a successful artist, lives and works in Paris. He does not travel much. Like many of his peers, he too has declined multiple offers to teach in famous schools of art outside Paris. He does not prefer change and likes predictability, order, and structure in his life. Vincent Melville displays traits of being a member of a _____ culture.
2. low uncertainty-avoidance
3. short-term oriented
4. long-term oriented
5. xenocentric
6. high uncertainty-avoidance

Learning Objective: 5.3

Difficulty: Hard

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. Which of the following defines masculinity–femininity?
2. It is the degree to which a society values assertiveness and materialism versus feelings, relationships, and quality of life.
3. It is the ratio of men and women in the workforce at a given point of time.
4. It is the degree to which a society values the role of men and women as the propagators of its culture.
5. It refers to the core differences of gender that are mirrored in the interaction between a man and a woman.
6. It refers to the importance of men versus women in a society.

Learning Objective: 5.3

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. _____ has the highest masculinity score in Hofstede’s research.
2. Malaysia
3. Japan
4. India
5. France
6. Germany

Learning Objective: 5.3

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Which of the following expressions points toward a high masculine score?
2. Men tend to be physically stronger than women.
3. Women tend to have very fixed ideas about what men are like.
4. Women tend to be more patient than men.
5. Men tend to have a greater tolerance for risk than women do.
6. Men tend to have a rigid notion about what women are like.

Learning Objective: 5.3

Difficulty: Moderate

AACSB: Analytical thinking

Bloom’s Taxonomy: Comprehension

1. _____ is the degree to which a society emphasizes short-term or long-term goals.
2. Uncertainty avoidance
3. Power distance
4. Time orientation
5. Time preference
6. Individualism-collectivism

Learning Objective: 5.3

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Which of the following pillars of management advocates that a person to be inquisitive and curious about cultural differences?
2. Relationship management
3. Perception management
4. Finance management
5. Self-management
6. Crisis management

Learning Objective: 5.4

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Which of the following is a characteristic of intercultural competencies?
2. It refers to acting competent when working in another culture.
3. It does not tolerate cultural diversity.
4. It involves being judgmental about a cultural norm.
5. It refers to the superiority of one culture to another.
6. It does not require a person to be open-minded about a culture.

Learning Objective: 5.4

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Foot-O, a local footwear company, has made a payment to the German footwear giant Buirick GmbH to use the foreign company’s excellent method of shoe making. Which of the following is this an example of?
2. Franchising
3. Insourcing
4. Joint venture
5. Foreign subsidiary
6. Licensing agreement

Learning Objective: 5.1

Difficulty: Hard

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. Derrick decides to shut down his steel business in Kenya and shift the production to his home country, the United States. The rising labor problems and political disruptions in the host country had led him to make this decision. This method of shifting of business to a native location is called _____.
2. joint venture
3. foreign subsidiary
4. outsourcing
5. franchising
6. reshoring

Learning Objective: 5.1

Difficulty: Hard

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. Matata, a Japanese firm that manufactures automobile parts, was running at a loss in its offshore outlet in Mexico due to the governmental and civil disruptions in the country. Thus, it withdrew its business outlets from Mexico. At this opportunity, another Japanese firm, Lui Corporation, entered into business in Mexico. With this decision, Lui Corporation has made itself liable to _____.
2. a licensing agreement
3. a regional economic alliance
4. political risk
5. insourcing
6. joint venture

Learning Objective: 5.1

Difficulty: Hard

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. Mobike, a major motorcycle manufacturer sells its motorcycles in more than 20 countries across the globe. According to this information, Mobike is an example of a _____.
2. foreign subsidiary
3. joint venture
4. transnational corporation
5. franchise
6. greenfield venture

Learning Objective: 5.2

Difficulty: Moderate

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. One of the new employees at Colleen’s firm is from Asia. She looks lost most of the time and is not interacting well with others in the office. Which of the following terms best describes her situation?
2. Ethnocentrism
3. Self-concordance
4. Proxemics
5. Culture shock
6. Ethical dilemma

Learning Objective: 5.3

Difficulty: Hard

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. Todd was send to North Korea on a project by his company. He is accompanied by his wife, Sarah. While Todd makes an effort to understand and adapt to the culture and ways of the Koreans, Sarah feels out of place. What does Todd’s behavior reflect?
2. Culture shock
3. Cultural intelligence
4. Ethnocentrism
5. Monochronic cultural identity
6. Low-context cultural ideals

Learning Objective: 5.3

Difficulty: Hard

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. Juan went to Japan on a company assignment. He often got confused because his hosts did not articulate their expectations and goals clearly. He would ask a lot of questions and would find himself talking a lot. Later, he learnt that he had to consider their gestures to get the complete picture. Which of the following terms best describes the culture of Juan’s hosts?
2. High-context culture
3. Ethnocentrism
4. Polychronic culture
5. Monochronic culture
6. Tight culture

Learning Objective: 5.3

Difficulty: Hard

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. Dom visited one of the Middle East countries to discuss strategic alliance with a client. He noticed that his hosts wouldn’t mind doing a lot of other things simultaneously during the meeting. Dom was baffled by the amount of interruptions that took place while interacting with his client. Which of the following terms best describes the culture of Dom’s client?
2. Ethnocentrism
3. Polychronic culture
4. Tight culture
5. Low-context culture
6. Transitional culture

Learning Objective: 5.3

Difficulty: Hard

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. Veronica has been recruited as a human resource manager in a firm based in China. She soon realizes that the work culture at her new office is entirely different from that of her previous firm, which was based in the U.S. In her new office, she could not question an order passed by a higher authority. What kind of a culture is Veronica facing in her new office?
2. Individualistic culture
3. Loose culture
4. Polychronic culture
5. High-power-distance culture
6. Low-context culture

Learning Objective: 5.3

Difficulty: Hard

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. Patrick, who was posted as a manager in a firm in India, was able to quickly adjust to the host country’s culture and work ethics. His self-confidence and flexible nature allowed him to accept and adapt to the cultural differences well. Which trait of Patrick is displayed in the given scenario?
2. Ethnocentrism
3. Intercultural competency
4. Xenocentrism
5. Uncertainty avoidance
6. Egocentrism

Learning Objective: 5.4

Difficulty: Hard

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

Essay

1. Name and briefly define some common market-entry strategies that help companies go global.

A common first step into international business is global sourcing—the process of purchasing materials, manufacturing components, or locating business services around the world.

A second form of international business involves exporting—selling locally made products in foreign markets. The flipside of exporting is importing—buying foreign-made products and selling them in domestic markets.

Another form of international business is the licensing agreement where foreign firms pay a fee for rights to make or sell another company’s products in a specified region. Franchising is a form of licensing in which a foreign firm buys the rights to use another’s name and operating methods in its home country.

Learning Objective: 5.1

Difficulty: Moderate

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. Define culture. Explain the importance of cultural intelligence.

Learning Objective: 5.3

Difficulty: Moderate

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. Distinguish between tight and loose cultures. Provide examples.

Learning Objective: 5.3

Difficulty: Moderate

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. What do you mean by intercultural competencies? What are the different pillars of intercultural competencies?

Learning Objective: 5.4

Difficulty: Moderate

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

Text Entry

1. ____ is the growing interdependence among elements of the global economy.

Learning Objective: 5.1

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. In global sourcing, materials or services are purchased around the world for ____ use.

Learning Objective: 5.1

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. In ____, a fee is paid to a foreign business for rights to locally operate using its name, branding, and methods.

Learning Objective: 5.1

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. A(n) ____ venture is a foreign subsidiary built from the ground up by the foreign owner.

Learning Objective: 5.1

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. Nontariff barriers to trade discourage imports in ____ ways such as quotas and government import restrictions.

Learning Objective: 5.1

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. A(n) ____ corporation is a multinational enterprise that conducts commercial transactions across national boundaries.

Learning Objective: 5.2

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. The globalization gap is where large multinational corporations and industrialized nations gain ____ from the benefits of globalization.

Learning Objective: 5.2

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. Corruption involves ____ practices to further one’s business interests.

Learning Objective: 5.2

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. Child labor is the ____ of children for work otherwise done by adults.

Learning Objective: 5.2

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. ____ minerals are ones sourced in the Democratic Republic of Congo and surrounding region and whose sale finances armed group that perpetuate violence.

Learning Objective: 5.2

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. _____ is the tendency to consider one’s culture superior to others.

Learning Objective: 5.3

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. In ____ cultures, time is used to accomplish many different things at once.

Learning Objective: 5.3

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. Proxemics is how people use _____ to communicate.

Learning Objective: 5.3

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. A tight culture has ____ social norms and expects members to conform with them.

Learning Objective: 5.3

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. The ____ fallacy assumes that a generalized cultural value applies equally well to all members of the culture.

Learning Objective: 5.3

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. Power ____ is the degree to which a society accepts unequal distribution of power.

Learning Objective: 5.3

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. Individualism-collectivism is the degree to which a society emphasizes _____ and their self-interests.

Learning Objective: 5.3

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. ______ is the degree to which a society values assertiveness and materialism.

Learning Objective: 5.3

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. _____ management studies how management practices differ among countries and cultures.

Learning Objective: 5.4

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge

1. ______ competencies are skills and personal characteristics that help us be successful in cross-cultural situations.

Learning Objective: 5.4

Difficulty: Easy

AACSB: Diverse and multicultural work environments

Bloom’s Taxonomy: Knowledge