BUSN 427 Week 8 Final Exam

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. Question :

(TCO 1) What organization was protested in Seattle in 1999?

Student Answer:

Boeing Corporation

Starbucks

World Trade Organization

APEC (Asia Pacific Economic Corporation)

Comments:

2.

Question :

(TCO 2) According to Francis Fukuyama, the collapse of communism in eastern Europe

was followed by which of the following?

Student Answer:

The new world order

The end of history

The universalization of Western democracy

None of the above

All of the above

Comments:

3.

Question :

(TCO 3) Which language is most widely spoken throughout the world?

Student Answer:

Chinese

Hindi

English

Spanish

None of the above

Comments:

4.

Question :

(TCO 3) Which theory deals with competitive advantage for countries?

Student Answer:

Herckscher-Ohlin

Adam Smiths Wealth of Nations

Product Life-Cycle Theory

The Leontief Paradox

None of the above

Comments:

5.

Question :

(TCO 4) In the last 30 years, the world economy has seen

Student Answer:

a marked increase in both the flow and stock of FDI.

a slowing of FDI overall.

FDI grow but more slowly than world trade.

a shift away from free-market economies.

Comments:

6.

Question :

(TCO 5) Chile is included in which of the following regional integrations organizations?

Student Answer:

MERCCOSUR

Andean Community

NAFTA

APEC

None of the above

Comments:

7.

Question :

(TCO 6) When a firm engages in hedging it is

Student Answer:

ensuring against a risk in the foreign exchange.

violating a law on foreign speculations.

in danger of violating the Foreign Corrupt Practices Act.

investing in a hedge fund to maximize its return to shareholders.

1.

Question :

(TCO 8) What are the three staffing policies available to a multinational corporation?

2.

Question :

(TCO 8) In distribution strategy, what are the four main differences between countries?

3.

Question :

(TCO 3) Indias caste system has been around for many years. Explain why its influence
has diminished among educated urban middle class Indians.

4.

Question :

(TCO 3) In 2006, two Chinese journalists reported that the working conditions at
Hongfujin Precision Industries where Apples iPods are produced were substandard.
According to the report, not only were workers at the plant poorly paid, but they were
also forced to work overtime. Apple immediately responded to the allegations and
audited the factory in question. However, managers at the factory filed a defamation
lawsuit against the two journalists. Despite the fact that Apples audit did indeed show
substandard working conditions at the factory, Hongfujin did not withdraw the lawsuit.
Eventually the Reporters Without Borders group took up the case for the two reporters
and the lawsuit was dropped.

The allegations against Hongfujin Precision Industries were made by two Chinese
reporters. Discuss the implications of this for other Chinese companies.

5.

Question :

(TCO 3) Exports are largely responsible for Chinas recent rapid economic growth. The
country, capitalizing on its cheap labor force, has focused on converting raw materials

into products that are exported to developed countries such as the United States. In
2008, Chinas trade surplus was a record $280 billion, and its holdings of foreign
exchange reserves were over $1.95 trillion. Some critics have suggested that China is
following a neomercantilist policy.

Are the claims that China is following a neomercantilist policy valid? Why or why not?

6.

Question :

(TCO 4) Telefonica is a Spanish telecommunications firm. For decades, Telefonica had

operated as a typical state-owned enterprise, but privatization and deregulation changed
that path in the 1990s. Telefonica began to aggressively pursue expansion opportunities
in Latin America where it quickly became the number one or two player in nearly every
country. Later, Telefonica turned its sights on Europe where its acquisitions helped
transform the company into the second biggest mobile phone operator in the world.

What changes in political and economic environment allowed Telefoncia to start

expanding globally? Why did Telefonica initially focus on Latin America? Why was it
slower to expand in Europe even though Spain is a member of the European Union?

7.

Question :

(TCO 7) Why did the world shift from a gold standard to fixed exchange rates?

1.

Question :

(TCO 5) Concerning European Unions progress toward creating a single financial

market, the quest started in 1999 was to have been completed by 2005, however,
progress has been slowed by various factors related to the tradition of each member
country operating autonomously. By 2007, significant progress had been made. Some
41 measures designed to create a single market were in place and others were in the
pipeline. The current issue facing the EU revolves around the enforcement of the rules
that have been established as law. Some experts believe that it will be at least another

decade before the benefits of the new rules become apparent. Discussion of this feature
can begin with the following questions.

What are the benefits of creating a single financial market in the European Union for
companies? Does it make sense for consumers?

Comments:

2.

Question :

(TCO 6) In the 1980s, Caterpillar was negatively affected by a strong dollar and lost
significant market share to Japanese competitor Komatsu. The situation prompted
Caterpillar to revise its global strategy and by the 2000s, the company was in a much
better position to deal with volatile currency values. More recently, a strong dollar has
actually helped boost Caterpillars bottom line.

In the 1980s, a stronger dollar hurt Caterpillars competitive position, but in 2008 a
stronger dollar did not seem to have the same effect. What had changed?

3.

Question :

(TCO 7) In May 2001, the IMF agreed to lend $8 billion to Turkey to help stabilize its
economy and halt a sharp slide in the value of its currency. Although initially the Turkish
government resisted IMF mandates on economic policy, in 2003 the government passed
an austerity budget. By 2005, significant progress had been made and today, the
country appears to be on track for recovery, with lower inflation rates, an increase in
privatization, and a budget surplus.

What led to Turkeys financial crisis? What goals did the IMF establish as part of the
loan agreement?

Comments:

4.

Question :

(TCO 8) MD International is an export intermediary for U.S. medical equipment

manufacturers. The company has been able to capitalize on falling trade barriers, as
well as expand healthcare programs in the Latin American region. MD International
currently represents more than 30 companies and sells to some 600 regional
distributors.

How does an intermediary such as MD International create value for the manufacturers
who use it to sell medical equipment in foreign markets? Why do they want to use MD
International rather than export directly themselves?

5.

Question :

(TCO 8) Boeing made the decision to outsource much of the production of the 787 in the
hopes of significantly reducing the time to get the product to market. Boeing also
anticipated that its outsourcing strategy would allow it to generate additional sales from
the countries that were partners in the process and reduce its costs and risks. Although

Boeings strategy worked for some components, for other parts the strategy was a
disaster. Suppliers were late and some produced poor-quality parts, forcing Boeing to
commit additional resources to the project.

What are the benefits to Boeing of outsourcing so much work on the 787 to foreign
suppliers? What are the potential risks? Do the benefits outweigh the risks?

Comments:

6.

Question :

(TCO 8) By 2015, Ford hopes to compete in North America, Europe, and Asia by
offering several global models including the Fiesta, the Fusion, and the Mondeo. The
company, which refers to its new strategy as One Ford, anticipates that its global models
will share the same components and looks and be positioned in a similar way in each
market in which they are sold.

What is behind Fords One Ford vision? What is the company hoping to accomplish with
this strategy?