Exercises International Business: The New Realities Cavusgil, Knight, and Riesenberger Chapter 2 Globalization

1. Exercises by:
Kamal AL MASRI
Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall

2. Discussion ..
Globalization can cause the loss of
national sovereignty. Discuss this idea.
Globalization is not new. Discuss why.
Explain how advances in technology
helps Globalization.
Discuss the main dimensions of market
globalization.
Discuss the main societal
consequences of market
globalization.
International Business – Kamal AL MASRI - Exercises
2

3. Discussion ..
List some firm-level
consequences of market
globalization.
Explain how Globalization harms
the natural environment.
Explain what are the effects of
Globalization on National
Culture.
International Business – Kamal AL MASRI - Exercises
3

4. True or false
 () Globalization and technological advances have
altered the international business landscape more than
any other trends.
 () The first wave of Globalization was fueled by Internet
and other technologies.
 () The last wave of Globalization was characterized by
progress in ICT and rapid liberalization in emerging
markets.
 () Market liberalization and adoption of free markets are
considered drivers of Market Globalization.
 () Collectively, technological advances have greatly
reduced the costs of doing business internationally.
International Business – Kamal AL MASRI - Exercises
4

5. True or false
 () Globalization of markets refers to the ongoing
economic integration and growing
interdependency of countries worldwide.
 () Advances in technology reduces the cost of
doing business internationally by allowing firms
to interact cheaply with suppliers, distributors,
and customers worldwide.
 () Globalization allows firms to view the world as
one large marketplace for goods, services,
capital, labor, and knowledge.
 () Worldwide reduction of barriers to trade and
investment acted as a driver of Market
Globalization.
International Business – Kamal AL MASRI - Exercises
5

6. True or false
 () Advances in technology didn’t play any role in
Market Globalization.
 () Integration and interdependence of national
economies is one of the dimensions of Market
Globalization.
 () Market Globalization led to the convergence
of buyer lifestyles and preferences.
 () Market Globalization is characterized by rapid
spread of financial or monetary crises from one
country to another.
 () Globalization can lead to the loss of national
sovereignty.
International Business – Kamal AL MASRI - Exercises
6

7. True or false
 () Offshoring can cause the flight of jobs.
 () Internationalization of the Firm’s Value Chain is one of
societal consequences of Globalization.
 () Globalization means less new business opportunities
for internationalizing firms.
 () Globalization means new risks and intense rivalry from
foreign competitors.
 () Globalization transformed many developing
economies from producers of low-value goods to
higher-value goods, such as electronics and computers.
 () ICTs opened the global marketplace to firms that
historically lacked the resources to internationalize.
International Business – Kamal AL MASRI - Exercises
7

8. True or false
 () Globalization led to a rise of regional economic
integration blocs.
 () Growth of global investment and financial flows is a
sign of Globalization.
 () Nations should emphasize economic freedom and
participation in international trade and investment.
 () Economic freedom is the extent of government
interference in business, the strictness of the nation’s
regulatory environment, and the ease with which
economic activity can be carried out.
 () Economic Freedom is generally associated with
National Prosperity.
International Business – Kamal AL MASRI - Exercises
8

9. True or false
 () Value chain refers to the sequence of value-
adding activities performed by the firm in the
process of developing, producing, and
marketing a product or a service.
 () Globalization allows the firm to internationalize
its value chain, leading to various advantages.
 () Market globalization compels firms to
internationalize their value chain and access the
benefits of international business.
 () Internationalization of the Firm’s Value Chain
helps increase efficiency, productivity, and
flexibility of value chain activities.
International Business – Kamal AL MASRI - Exercises
9

10. True or false
 () The Great Depression marked the beginning
of the second phase of globalization.
 () The initial phase of globalization was
triggered in part by the introduction of the
railroad.
 () Firms that pursue internationalization as a
strategic move tend to approach global
competition more aggressively than do firms that
internationalize for reactive reasons.
 () Converging lifestyles and preferences
worldwide help to promote traditional values in
individual countries.
International Business – Kamal AL MASRI - Exercises
10

11. True or false
 () One contribution of the World Trade
Organization is to help maintain reduced trade
barriers throughout the world.
 () Industrialization implies that emerging market
countries are increasing their dependence on
low-cost labor
 () Technological advances have helped make
internationalization affordable for all sizes of
firms.
 () Globalization has led buyers to become
more demanding and to shop for the best value
worldwide.
International Business – Kamal AL MASRI - Exercises
11

12. The first phase of globalization was
characterized by which of the following?
A) the rise of steel
production
B) the growth of railroads
C) the spread of
electricity
D) the rise of SMEs
International Business – Kamal AL MASRI - Exercises
12

13. The third phase of globalization was triggered
by :
A) the end of World War II
B) the invention of
electricity
C) the end of World War I
D) economic growth in
emerging markets
International Business – Kamal AL MASRI - Exercises
13

14. Which of the following reflects the major
contribution of GATT to globalization?
A) strict controls on
international currencies
B) worldwide economic
downturn
C) reduction of barriers to
international trade
D) advent of new
communications technology
International Business – Kamal AL MASRI - Exercises
14

15. Over time, the GATT evolved into which of the
following?
A) World Bank
B) International Monetary
Fund
C) World Trade
Organization
D) NAFTA
International Business – Kamal AL MASRI - Exercises
15

16. Firms that are more successful at global
competition display each of the following
qualities except:
A) identifying foreign market
opportunities aggressively
B) approaching
internationalization from a reactive
standpoint
C) actively pursuing partnerships
with foreign firms
D) focusing intensively on building
organizational capacities
International Business – Kamal AL MASRI - Exercises
16

17. Value-chain activities are defined as which of
the following?
A) the methods through which
governments promote economic
integration
B) the aggregate activities of
internationally active firms
C) the process of designing a
product for a global market
D) the sequence of value-adding
activities performed by a firm
International Business – Kamal AL MASRI - Exercises
17

18. All of the following represent examples of
regional economic integration blocs except:
A) World Trade
Organization
B) European Union
C) Mercosur
D) NAFTA
International Business – Kamal AL MASRI - Exercises
18

19. Global firms shift their manufacturing and
procurement to foreign locations in order to:
A) avoid the pressures of
global competition
B) benefit from low labor
costs
C) reduce the impact of
regional recessions
D) avoid oversight by
international agencies
International Business – Kamal AL MASRI - Exercises
19

20. Which of the following is not a driver of market
globalization?
A) market liberalization
B) technological
advances
C) increased import tariffs
D) economic
development
International Business – Kamal AL MASRI - Exercises
20