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Chapter: 12 -Problem: 6 >> What are some of the disadvantages that can result when companies use channels of distribution to market their products overseas? Distribution The word "distribution" has several meanings in the financial world, most of them pertaining to the payment of assets from a fund, account, or individual security to an investor or beneficiary. Retirement account distributions are a
Answer Preview: Channels frequently car…

, Chapter: 1 -Problem: 2 >> What are some of the major economic reform themes that are common to the three international organizations promoting globalization?
Answer Preview: Free trade, global and multi…

, Chapter: 14 -Problem: 3 >> Briefly describe the main sources of finance for international trade and investment. Distinguish between short-term and long-term finance sources.
Answer Preview: Firms finance their international operations in a variety of wa…

, Chapter: 4 -Problem: 1 >> 1. How did Greece get into trouble with its government debt? Did joining the Eurozone help them pay rising government debts? Explain your answers. 2. Should Greece exit the euro? How would it benefit? What could go wrong? Explain your answers. In 2008 and 2009, international financial markets suffered large declines in stock, bond, and real estate prices. Due to excessive government spending and r
Answer Preview: 1. Greece got into trouble with tis government debt due to exce…

, Chapter: 6 -Problem: 5 >> What are some steps countries can take to better enforce intellectual property rights in their jurisdictions?
Answer Preview: Better polic…

, Chapter: 12 -Problem: 1 >> 1. What are the advantages and disadvantages of using licensing and exporting? 2. Will Mary need to use the services of a freight forwarder? If so, what specific services?  The Horse Place is a retailer that sells horse tack through Internet and classified ads. The retailer’s owner, Mary Jones, had recently begun sourcing from suppliers in India. She considered their products to be excellent quali
Answer Preview: 1. Exporting is difficult due to logistics conside…

, Chapter: 12 -Problem: 8 >> How can companies competitively set international prices while avoiding allegations of dumping?
Answer Preview: Companies should not set a price in the foreign market be…

, Chapter: 10 -Problem: 5 >> Which type of company often adopts hybrid structures?
Answer Preview: Companies that simultaneously face pressures to grow …

, Chapter: 9 -Problem: 5 >> In what ways did the organizational culture at Bernard Madoff Investment Services company help lead to Madoff’s success for so many years?
Answer Preview: Tremendous loyalty …

, Chapter: 8 -Problem: 4 >> Quite often, host countries have a love-hate relationship with MNEs. Why?
Answer Preview: Host countries are aware of the benefits of FDI (i e., new jobs, technologies, skills acquisitio…

, Chapter: 8 -Problem: 3 >> MNEs try to maximize profits. How could MNEs maximize profits and minimize profit volatility at the same time?
Answer Preview: Profit volatility can be minimized through diversification, which will allow MNEs t…

, Chapter: 14 -Problem: 2 >> What derivative securities can be used to hedge the effects of fluctuations in currency values on the cash flows of firms and investors?
Answer Preview: Currency futures contracts are standardized agreements to buy or sell a specified amount of cur…

, Chapter: 10 -Problem: 2 >> Organizational structures can help a company fail or succeed. Why do you think that is the case?
Answer Preview: Organizational structure allows members of the organization to perform a variety o…

, Chapter: 12 -Problem: 1 >> Why do companies need to research their international markets?
Answer Preview: Companies need to collect a wide variet…

, Chapter: 6 -Problem: 1 >> 1. Why do you think the democracy of Ghana continues to permit local towns or regions to have tribal chiefs, kings, and the like? Do you think this tradition will continue into the future?2. Would you have made the same decision as King Peggielene Bartels to accept the royal position? Would you have waited five or six years until retiring as a secretary in the United States to move to Ghana and be
Answer Preview: 1. This tradition allows parts …

, Chapter: 2 -Problem: 2 >> What trade theories support the recent rise of China and India on the global stage? Explain your views in detail.
Answer Preview: The theory of comparative advantage and H-O theory suggest that China and India possess an a…

, Chapter: 9 -Problem: 1 >> 1. How does Mr. Buffett’s age affect Berkshire Hathaway’s recent strategic moves such as buying Burlington Northern Santa Fe Railroad instead of another large insurance company? 2. What does his purchase of Burlington Northern Santa Fe Railroad say about where Buffett thinks about global energy conservation trends? (Hint: How does the energy efficiency of shipping goods via rail compare with shipp
Answer Preview: 1. He probably wants to make the company a little less depende…

, Chapter: 15 -Problem: 6 >> Before locating operations in a country, why should a MNC evaluate that country’s tax system?
Answer Preview: Part of international operations is paying taxes …

, Chapter: 10 -Problem: 4 >> Compare and contrast the following organizational structures: functional structure, product structure, market structure, and geographical region structure.
Answer Preview: A product structure is a particular kind of divisional structure that groups products into se…

, Chapter: 8 -Problem: 2 >> What is a recent development in the evolution of multinational enterprises and how does that development affect globalization?
Answer Preview: A recent development in the evolution of MNEs is th…

, Chapter: 12 -Problem: 3 >> What is the difference between standardization and adaptation?
Answer Preview: The standardization approach signifies tha…

, Chapter: 6 -Problem: 3 >> What are some arguments in favor of permitting at least some level of “corruption” in the conduct of business throughout the world?
Answer Preview: Its almost …

, Chapter: 9 -Problem: 2 >> Do you think global businesses should place more emphasis upon operational or tactical plans? Why?
Answer Preview: It depends, ob…

, Chapter: 7 -Problem: 1 >> 1. Why is ethics important to doing business? 2. If all companies established a corporate ethics code, would that eliminate company financial scandals? Why or why not?  For nearly 40 years, ExxonMobil has promoted business ethics and integrity through a 12-page booklet titled “Standards of Business Conduct.” ExxonMobil regards a well-founded reputation for scrupulous dealing as a valuable company
Answer Preview: 1. Business activity would grind to a halt without trust, fair dealings, and honest …

, Chapter: 13 -Problem: 1 >> How can global operations management be used as a source of competitive advantage?
Answer Preview: Operations management can provide companies wi…

, Chapter: 15 -Problem: 4 >> How does auditing contribute to better financial reporting?
Answer Preview: People who rely on financial statements are very concerned about the validity of the re…

, Chapter: 10 -Problem: 6 >> A matrix structure may provide the advantages of the functional and divisional structures, but it may also provide the disadvantages of these two structures. Argue in favor of or against this assertion.
Answer Preview: The goal of the matrix structure is to capitalize on …

, Chapter: 5 -Problem: 4 >> What are some important secondary sources that companies can consult to learn about the cultures of other countries?
Answer Preview: Companies considering conducting business overseas, and those …

, Chapter: 1 -Problem: 1 >> What are some underlying factors that are causing decoupling to happen as societies move from a unipolar to a multipolar world? In your opinion, in which direction is the balance of global economic power shifting? And is it good for the world economy?
Answer Preview: Robust growth, growth of the middle-class, high savings and …

, Chapter: 11 -Problem: 1 >> 1. How will the expansion of sexual harassment laws globally affect company policies and procedures? 2. How will companies handle the increase in possible lawsuits stemming from sexual harassment legislation?  Laws prohibiting sexual harassment in the workplace are relatively new in the U.S., having begun with the 1964 Civil Rights Act. The global workplace has followed; with many countries, inclu
Answer Preview: 1. Companies that conduct business in the global marketplac…

, Chapter: 12 -Problem: 9 >> How should companies deal with international customers who complain?
Answer Preview: Complaints from customer…

, Chapter: 7 -Problem: 4 >> Briefly describe the financial scandals at Enron, WorldCom, Vivendi, and Parmalat; what other scandals have happened in recent years or months?
Answer Preview: Between the early 1990s a…

, Chapter: 7 -Problem: 6 >> Why are internal controls important to successful company operations?
Answer Preview: Today the dominant form of business is the corporatio…

, Chapter: 15 -Problem: 3 >> What are the benefits of every country using the same GAAP; that is, IFRS? Why haven’t all countries adopted IFRS?
Answer Preview: Different GAAPs made it difficult for investors and other financial sta…

, Chapter: 8 -Problem: 5 >> To partially overcome its current account deficit, the United States needs to attract FDI that could spur economic growth. What policy measures should the United States take to keep attracting FDI into the country?
Answer Preview: The U S. needs to strive to improve its investment …

, Chapter: 1 -Problem: 7 >> Globalization temporarily creates “winners” and “losers.” What reform would you suggest to help those who are not benefiting from globalization? How might these reforms be implemented?
Answer Preview: Losers of globalization need help in retraining, …

, Chapter: 10 -Problem: 1 >> Why are global businesses evolving toward stateless corporations?
Answer Preview: Many major corporations have a global presence. Stateless c…

, Chapter: 7 -Problem: 1 >> What do you consider the key characteristics of a person of integrity?
Answer Preview: A persons integrity has two essentia…

, Chapter: 7 -Problem: 2 >> Why is the ethical character of people so important to business and society?
Answer Preview: Business activity w…

, Chapter: 3 -Problem: 1 >> 1. Given the security concerns of both the EU and Russia, where should the EU’s eastern border end? Do you think the buffer states should become NATO members as well? Why or why not? 2. Should non-uniformity policies in the EU (i.e., cherry picking EU policies that members may choose to follow) be tolerated or encouraged? The rapid enlargement of the EU raises some questions about the reasons for
Answer Preview: 1. The geographical borders of Europe stretch east as far as the Ural Mountains x whic…

, Chapter: 1 -Problem: 1 >> 1. What are the advantages and disadvantages of biofuels in terms of addressing the challenge of sustainable development?2. Should bioethanol production from corn be encouraged, given that corn is used as a basic cereal in many societies? Should bioethanol production be subsidized in the United States, and also be protected against competition from Brazil sugarcane-based bioethanol? Politically co
Answer Preview: 1. Advantages: Help achieve energy security Source of income for the rural pop…

, Chapter: 11 -Problem: 4 >> If you were president of the United States and trying to negotiate better labor standards for NAFTA, what new provisions might you try and negotiate (at least from the U.S. perspective)?
Answer Preview: Perhaps greater pun…

, Chapter: 6 -Problem: 2 >> Are there any places in the world, today, where “pure”, “free market” capitalism exists?
Answer Preview: With the fall …

, Chapter: 8 -Problem: 1 >> 1. Is ArcelorMittal a “stateless” corporation or a MNE? Where is its home country?2. What is Mittal Steel’s core competency, and what was its strategic motive for global business? ArcelorMittal is the world’s largest steel company. It had 232,250 employees working in 60 countries in 2013. Its registered headquarters is located in Luxembourg, its operational and financial headquarters are in London
Answer Preview: 1. ArcelorMittal can be called a stateless corporation, becaus…

, Chapter: 3 -Problem: 5 >> NAFTA has improved Mexico-U.S. trade and investment, yet bilateral trade between the United States and China is greater than with Mexico. Why is this true?
Answer Preview: Although the U S. remains Mexicos largest trade partner, lo…

, Chapter: 10 -Problem: 1 >> 1. What are some advantages and disadvantages of the Shell Matrix?2. Why do you think Shell has undergone so many organizational restructurings? 3. How would you decide what would be Shell’s best organizational structure?  Royal Dutch Shell p.l.c. is one of the six “supermajor” oil and gas companies. Shell is unique for its organizational structure and its global presence. It was characterized as
Answer Preview: 1. Advantages of the Shell Matrix include its ability to make Shell flexible without the need for …

, Chapter: 1 -Problem: 3 >> Globalization can be facilitated only if national governments are willing to participate in that process. What roles can the three major international institutions play to be a part of this facilitation process?
Answer Preview: Provide a forum for intern…

, Chapter: 11 -Problem: 3 >> Why is it often very difficult for supervisors, in any culture, to provide employees with a negative performance appraisal?
Answer Preview: It is, by i…

, Chapter: 13 -Problem: 2 >> List the factors that a firm should consider when making an outsourcing decision.
Answer Preview: Global suppliers can usually provide lower costs than domestic suppliers or the com…

, Chapter: 4 -Problem: 5 >> Assume that the one-year U.S. Treasury bond rate is 3% and the similar European government bond rate is 5%. Comparing these inflation rates, could it be expected that the dollar will appreciate or depreciate against the euro over the next year? If the spot rate is 1.50 dollars per euro, what would be the forward rate?
Answer Preview: Using the equation (i US - i E ) = (F S)/S = p, we have (0 03 …

, Chapter: 1 -Problem: 6 >> Is sustainable business and economic development the answer to the globalization controversy?
Answer Preview: Sustainable business development is part of the answer. T…

, Chapter: 8 -Problem: 1 >> It is anticipated that emerging-market multinationals will play a greater role in international business during this century. What mode of international business operations do you think they would choose? Why?
Answer Preview: MNEs from emerging markets are likely to focus on mergers and acquisi…

, Chapter: 9 -Problem: 1 >> In what ways are corporate mission statements more than just “public relations”?
Answer Preview: In part, th…

, Chapter: 10 -Problem: 3 >> What is the difference between export departments and international divisions?
Answer Preview: As the volume of exports grows, it may become feasible for the firm to manufacture and sell its …

, Chapter: 2 -Problem: 1 >> 1. Is economic nationalism justified? 2. Is the Smoot-Hawley plan better or worse than “Buy American”? “Buy Spanish”? Or “British jobs for British workers”? Explain fully. The ideology of economic nationalism seeks to implement trade policies that help to keep jobs and investment at home. Such protectionism may violate international trade rules, and retaliation from other countries may follow.
Answer Preview: 1. No. Although in the short run economic nationalism can help keep …

, Chapter: 7 -Problem: 3 >> How does corporate social responsibility contribute to successful business operations?
Answer Preview: Corporate social responsibility affe…

, Chapter: 6 -Problem: 4 >> Criminal laws vary widely throughout the world. What may be a “crime” in one country, may represent permissible conduct in another locale. Why do you think there are such vast global differences in this regard?
Answer Preview: Different cult…

, Chapter: 4 -Problem: 3 >> Briefly describe the international monetary systems implemented under the Bretton Woods, Smithsonian, and Jamaica Agreements.
Answer Preview: The Bretton Woods Agreement established a global currency system based on a …

, Chapter: 2 -Problem: 3 >> Some believe there is a disconnect between trade theory and trade policy. What rationale could the United States use to support its trade policies? Give specific examples.
Answer Preview: Employment and environmental law and employee health and safety legislation are very stringen…

, Chapter: 1 -Problem: 4 >> While domestic institutions play an important role in the globalization process, what are some of the fundamental policy measures that those countries need to promote in order to benefit from globalization? How might these policies be implemented and promoted?
Answer Preview: The countries need to promote good governance, comp…

, Chapter: 11 -Problem: 2 >> What are the pros and cons of using the Internet for the “virtual staffing” of corporate operations?
Answer Preview: It makes such staffing …

, Chapter: 1 -Problem: 5 >> Do you believe that there is a “digital divide” in the global economy? Is globalization narrowing that gap? If so, how?
Answer Preview: The digital divide in the global economy still exists, since IT infrastructure in the developed m…

, Chapter: 5 -Problem: 5 >> What are some cultural factors that U.S. companies must recognize when doing business in Latin America?
Answer Preview: When doing business in Latin America, it is important to understand …

, Chapter: 5 -Problem: 1 >> What are the four characteristics of culture that global marketers must recognize?
Answer Preview: Culture is not inherited; it is learned. Culture is rela…

, Chapter: 12 -Problem: 7 >> What are the advantages of using freight forwarders.
Answer Preview: Freight forwarders arrange for moving prod…

, Chapter: 14 -Problem: 1 >> What is the difference between foreign exchange risk arising from translation, transactions, and economic risks?
Answer Preview: Transactions risk arises from the import and export of goods and services. It affects both expor…

, Chapter: 15 -Problem: 1 >> 1. Why is it difficult to compare the financial statements of a U.S. company with those of a company in India or Germany? 2. How would McDonald’s benefit if IFRS were adopted for use in all countries worldwide?  McDonald’s Corporation operates in more than 100 countries. As a multinational business, McDonald’s must comply with the rules and regulations of the countries where it operates.  The UN
Answer Preview: 1. Financial reporting in the U S. differs from that in other countrie…

, Chapter: 15 -Problem: 2 >> Describe U.S. GAAP and why it differs from GAAP in other countries. GAAP Generally Accepted Accounting Principles (GAAP) is the accounting standard adopted by the U.S. Securities and Exchange Commission (SEC). While the SEC previously stated that it intends to move from U.S. GAAP to the International Financial Reporting Standards (IFRS), the...
Answer Preview: IFRS are different from U S. GAAP in a variety of ways. IFRS are regarde…

, Chapter: 15 -Problem: 5 >> How does financial ratio analysis enable an investor to compare two companies?
Answer Preview: A financial ratio shows the relationship of one number on a fina…

, Chapter: 4 -Problem: 2 >> What is the difference between independent floating, managed floating, and fixed exchange rate systems? Provide an example of a direct quote of an exchange rate. Exchange Rate The value of one currency for the purpose of conversion to another. Exchange Rate means on any day, for purposes of determining the Dollar Equivalent of any currency other than Dollars, the rate at
Answer Preview: In a free-market-oriented foreign exchange market, major currency …

, Chapter: 5 -Problem: 1 >> 1. What sources about Ecuador should you consult to obtain cultural information about this country that will need to be included in your cultural map? 2. What other aspects of Ecuadorian culture, other than its predominant religion and language, might affect that country’s culture?  For a person who is assigned the task of developing a cultural map of Ecuador to be included in the prospectus to po
Answer Preview: 1. Selected rankings of Ecuador on Hofstedes, Trompenaarss and GLOBEs cult…

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