BAM 401 UNIT 4 EXAMINATION

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BAM 401 unit4

1. in general, companies that have low levels of ownership advantages ____________.
2. enter foreign markets through franchising
3. enter foreign markets through joint ventures
4. enter foreign markets through FDI
   d. do not enter foreign markets
5. The ____________ of a rm is the share of its total output that is exported.
6. export intensity
   b. incremental export
7. intermodal export
8. freight forward
9. Which of the following is NOT one of the phases in the process of incremental export development?
10. initial exporting
11. serendipity
    c. preengagement
12. advanced
13. Which of the following explanations is commonly cited as a reason that rms do not seek export opportunities more aggressively?
14. Firms are reluctant to adjust their nancial practices.
    b. It is dif cult for foreign customers to communicate their needs to an exporter.
15. Exporting is an activity best left to large rms.
    d. Firms are unaware of foreign market opportunities.
16. An import strategy may be driven by the fact that companies ____________.
17. can tap a wide range of government subsidies to support their import strategy
    b. cannot buy goods or services needed in their production processes from local companies
18. can nd goods or services of lower quality than similar goods produced locally
    d. can buy goods or services at higher prices from foreign suppliers

Unit 4 Examination

BAM 401 International Business

162

6. As companies initiate their activities in export markets with a preference for an indirect selling strategy, they tend to ____________.
7. establish a small cadre of export professionals to handle the specialized functions of exporting
8. use external specialists to assist in the export process
   c. use freight forwarders to act as distributors in foreign markets
   d. use the International Trade Administration to handle their exports
9. The company that hires an intermediary in the belief that indirect selling has the most appeal in helping it manage the export process must accept ____________.
10. greater control over aspects of its international sales
11. lower pro t margins
    c. more responsibility for customer satisfaction
    d. the need to better understand trade regulations
12. Which of the following is a difference between export management companies (EMCs) and export trading companies (ETCs)?
13. ETCs deal with both exports and imports, while EMCs deal only with exports.
    b. ETCs operate more on the basis of demand, while EMCs operate more on the basis of

supply.
c. ETCs typically carry inventory, while EMCs typically do not.

1. ETCs are subject to antitrust laws, while EMCs are not.
2. Exporters who opt for direct selling in foreign markets most commonly do so ____________.
3. because they are usually the only ones who really understand the product characteristics
4. in order to spread the risk
   c. by working with a foreign distributor
   d. by allowing export management companies to act as agents for them
5. An American company looking to get into exporting could look to government agencies for assistance in all of the following ways EXCEPT which one?
6. providing information about market demographics and product demand
   b. understanding how to comply with domestic and foreign trade regulations
   c. organizing trade events that help potential exporters make foreign contacts and explore

export opportunities
d. acting as an export marketing department or international department for the company

Unit 4 Examination

BAM 401 International Business

163

11. Countertrade is an alternative means of structuring an international sale when ____________.
12. conventional forms of payment are dif cult, costly, or nonexistent
13. an importer is able to obtain a bank loan
    c. an importer does not belong to the World Bank
    d. an importer is able to raise the cash to settle a bill
14. Consumers may prefer domestically made products over imports for all the following reasons EXCEPT ____________.
15. a negative image associated with products from a certain country
    b. a belief that just-in-time manufacturing systems have reduced the need for imports
16. fears that parts and service will be dif cult to obtain for foreign products
    d. nationalistic sentiments
17. Internalization of foreign operations may lead to cost savings because ____________.
18. companies can avoid high start-up costs
    b. companies can avoid the costs of enforcing an agreement
    c. the elimination of the middleman reduces pro ts for that level
19. companies can avoid spreading costs with other companies
20. Risk is an important factor for companies engaged in international business. One way a collaborative arrangement helps minimize risk when operating abroad is by ____________.
21. providing more control over competitors’ entry
    b. freeing up resources so a company can diversify into more countries
22. eliminating losses from exchange rate depreciation abroad
    d. increasing the amount of compensation in case of expropriation
23. The advantages of contracting another company to handle production and sales abroad are less important when ____________.
24. the foreign country has high political risk
    b. foreign tax rates are the same as domestic taxes
    c. the company already has facilities in place within the foreign country
25. the company lacks nancial resources
26. When one rm grants another the use of a trademark and provides operational assistance on a continuing basis, the arrangement is known as ____________.
27. franchising
    b. appropriability
    c. a trademark convention
28. a management contract

Unit 4 Examination

BAM 401 International Business

164

17. When a company transfers specialized personnel abroad for a fee to work for another organization’s operation, the activity is known as ____________.
18. a management contract
19. franchising
    c. a joint venture
    d. a turnkey operation
20. What is an international joint venture?
21. an international agreement between two or more rms for the use of a trademark
    b. an agreement between two or more companies to manage a foreign business for a fee
22. the ownership of a company by two or more companies, of which at least one is a

foreign company where the venture is located
d. an agreement between two or more organizations to share management expertise

19. The degree of ____________ differentiation in a company determines where it has opted to assign decision making authority within the context of its organization structure.
20. schematic
21. vertical
    c. horizontal
22. systemic
23. A ____________ structure is the ideal way to organize work when global integration is more important than local responsiveness and the industry structure encourages cost leadership.
24. decentralized
25. functional
    c. divisional
    d. matrix
26. Which of the following organizational structures is particularly popular among companies that market a diverse portfolio of products?
27. functional division structure
    b. international division structure
28. product division structure
    d. geographic division structure
29. Which of the following statements about a matrix structure is false?
30. It speci es extensive communication channels.
    b. It slows decision making.
    c. It creates dual career ladders.
    d. It is more easily managed than a divisional structure.

Unit 4 Examination

BAM 401 International Business

165

23. Which of the following is NOT one of the three prevalent approaches to coordination?
24. adaptation
    b. mutual adjustment
25. standardization
    d. planning
26. Organizational ____________ is a system of shared values about what is important and beliefs about how the world works among the employees of an organization.
27. vision
    b. structure
28. system
29. culture
30. A company adopting a(n) ____________ strategy will likely aim to develop an organization culture that helps employees around the world unquestioningly accept common goals and practices.
31. transnational
32. multidomestic
33. global
    d. international

Unit 4 Examination