materials pricing system, with direct labor marked up 100% and direct materials marked up 50%

to

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Oak Grove Inc. has a petty cash fund of $1,500. (a) Since the petty cash fund is only $1,500,
should Oak Grove Inc. implement controls over petty cash? (b) What controls, if any, could be
used for the petty cash fund?

Longfellow Company performed services in July for a specific customer, for a fee of $8,380.
Payment was received the following August. (a) Was the revenue earned in July or August? (b)
What accounts should be debited and credited in (1) July and (2) August?

The following preliminary unadjusted trial balance of Nevada-For-You Co., a sports ticket
agency, does not balance: When the ledger and other records are reviewed, you discover the
following: (1) the debits and credits in the cash account total $47,350 and $33,975, respectively;
(2) a billing of $2,500 to a customer o

(a) Why did Congress pass the Sarbanes-Oxley Act of 2002? (b) What is the purpose of the
Sarbanes-Oxley Act of 2002?

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The following selected transactions were completed during February of the current year: 1.
Billed customers for fees earned, $41,730. 2. Purchased supplies on account, $1,800. 3. Received
cash from customers on account, $39,150. 4. Paid creditors on account, $1,100. a. Journalize the
above transactions in a two-column

Identify the errors in the following bankreconciliation:

Ethics and pricing. Baker, Inc., is preparing to submit a bid for a ball-bearings order. Greg
Lazarus, controller of the Bearings Division of Baker, has asked John Decker, the cost analyst to
prepare the bid. To determine the amount of the bid, Baker’s policy is to mark up the full
costs of the order by 10%. Lazarus

Acusphere, Inc., is a specialty pharmaceutical company that develops new drugs and improved
formulations of existing drugs using its proprietary micro particle technology. Currently, the
company has three products in development in the areas of cardiology, oncology, and asthma.
Acusphere reported the following data (in

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Based upon the T accounts in Exercise 2-4, prepare the nine journal entries from which the
postings were made. Journal entry explanations may be omitted.
During the month, Racoon Co. received $319,750 in cash and paid out $269,900 in cash. a. Do
the data indicate that Racoon Co. earned $49,850 during the month? Explain. b. If the balance of
the cash account is $72,350 at the end of the month, what was the cash balance at the beginning
of the month?

First Kenmore Bank provides loans to businesses in the community through its Commercial
Lending Department. Small loans (less than $100,000) may be approved by an individual loan
officer, while larger loans (greater than $100,000) must be approved by a board of loan officers.
Once a loan is approved, the funds are made

During 2010, Bezel Inc. has monthly cash expenses of $250,000. On December 31, 2010, the
cash balance is $1,750,000. a. Compute the ratio of cash to monthly cash expenses. b. Based on
(a), what are the implications for Bezel Inc.?

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The following data were gathered to use in reconciling the bank account of East Meets West
Company: Balance per bank $19,340 Balance per company records 6,480 Bank service charges
50 Deposit in transit 2,500 Note collected by bank with $250 interest 8

Accompanying a bank statement for Euthenics Company is a credit memo for $18,270,
representing the principal ($18,000) and interest ($270) on a note that had been collected by the
bank. The company had been notified by the bank at the time of the collection, but had made no
entries. Journalize the entry that should be

A former chairman, CFO, and controller of Donnkenny, Inc., an apparel company that makes
sportswear for Pierre Cardin and Victoria Jones, pleaded guilty to financial statement fraud.
These managers used false journal entries to record fictitious sales, hid inventory in public
warehouses so that it could be recorded as

Prepare a journal entry on December 23 for the withdrawal of $6,000 by Matt Nehls for personal
use.

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Assume that Beebe Realty Co. borrowed $120,000 from City Bank and Trust. In recording the
transaction, Beebe erroneously recorded the receipt as a debit to Cash, $120,000, and a credit to
Fees Earned, $120,000. (a) How would this error affect the equality of the trial balance? (b) How
would this error affect the inco

Indicate which of the following errors, each considered individually, would cause the trial
balance totals to be unequal: a. A payment of $2,150 to a creditor was posted as a debit of $2,150
to Accounts Payable and a debit of $2,150 to Cash. b. A fee of $4,600 earned and due from a
client was not debited to Accounts Re
Journalize the entries to record the following: a. Check No. 8193 is issued to establish a petty
cash fund of $800. b. The amount of cash in the petty cash fund is now $294. Check No. 8336 is
issued to replenish the fund, based on the following summary of petty cash receipts: office
supplies, $295; miscellaneous sellin

Digital Com Company, a communications equipment manufacturer, recently fell victim to a

fraud scheme developed by one of its employees. To understand the scheme, it is necessary to
review Digital Com’s procedures for the purchase of services. The purchasing agent is
responsible for ordering services (such as repairs

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The following errors took place in journalizing and posting transactions: a. Rent of $6,000 paid
for the current month was recorded as a debit to Rent Expense and a credit to Prepaid Rent. b. A
withdrawal of $18,000 by Juanita Jacobsen, owner of the business, was recorded as a debit to
Wages Expense and a credit to Cas

First Impressions Co. records all cash receipts on the basis of its cash register tapes. First
Impressions Co. discovered during June 2010 that one of its sales clerks had stolen an
undetermined amount of cash receipts when she took the daily deposits to the bank. The
following data have been gathered for June: Cash i

Carr Company adheres to a policy of depositing all cash receipts in a bank account and making
all payments by check. The cash account as of March 31 has a credit balance of $1,250, and
there is no undeposited cash on hand. (a) Assuming no errors occurred during journalizing or
posting, what caused this unusual balance

The following accounts appeared in recent financial statements of Continental Airlines:

Accounts Payable Flight Equipment Air Traffic Liability Landing Fees Aircraft Fuel Expense
Passenger Revenue Cargo and Mail Revenue Purchase Deposits for Flight Equipment
Commissions Spare Parts and Supplies Identify each

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Victor Blackmon works at the drive-through window of Buffalo Bob’s Burgers.

Occasionally, when a drive-through customer orders, Victor fills the order and pockets the
customer’s money. He does not ring up the order on the cash register. Identify the internal
control weaknesses that exist at Buffalo Bob’s Burgers,

Identify each of the following reconciling items as: (a) An addition to the cash balance according
to the bank statement, (b) A deduction from the cash balance according to the bank statement, (c)
An addition to the cash balance according to the company’s records, or (d) A deduction from
the cash balance accordin
What is the effect (increase or decrease) of a credit to a revenue account? (a) In terms of
owner’s equity and (b) In terms of revenue?

Before a voucher for the purchase of merchandise is approved for payment, supporting
documents should be compared to verify the accuracy of the liability. Give an example of
supporting documents for the purchase of merchandise.

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For each of the following errors, considered individually, indicate whether the error would cause
the trial balance totals to be unequal. If the error would cause the trial balance totals to be
unequal, indicate whether the debit or credit total is higher and by how much. a. The payment of
cash for the purchase of offi

Assume that when a purchase of supplies of $2,650 for cash was recorded, both the debit and the
credit were journalized and posted as $2,560. (a) Would this error cause the trial balance to be
out of balance? (b) Would the trial balance be out of balance if the $2,650 entry had been
journalized correctly but the cred

In an attempt to improve operating efficiency, one employee was made responsible for all
purchasing, receiving, and storing of supplies. Is this organizational change wise from an internal
control standpoint? Explain.

Bizarro Sound Co. discovered a fraud whereby one of its front office administrative employees
used company funds to purchase goods, such as computers, digital cameras, compact disk
players, and other electronic items for her own use. The fraud was discovered when employees
noticed an increase in delivery frequency from

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The following items may appear on a bank statement: 1. Bank correction of an error from
posting another customer’s check to the company’s account 2. EFT deposit 3. Loan
proceeds 4. NSF check Using the format shown below, indicate whether each item would appear
as a debit or credit memo on the bank statement and whe

El Cordova Co. is a small merchandising company with a manual accounting system. An

investigation revealed that in spite of a sufficient bank balance, a significant amount of available
cash discounts had been lost because of failure to make timely payments. In addition, it was
discovered that the invoices for several p

Identify each of the following as relating to (a) The control environment, (b) Control procedures,
or (c) Information and communication. 1. Management’s philosophy and operating style 2.
Report of internal auditors 3. Separating related operations
Cycle Tours Co. is a travel agency. The nine transactions recorded by Cycle Tours during
February 2010, its first month of operations, are indicated in the following T accounts: Indicate
for each debit and each credit: (a) Whether an asset, liability, owner’s equity, drawing,
revenue, or expense account was affecte

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Monet School is a newly organized business that teaches people how to inspire and influence
others. The list of accounts to be opened in the general ledger is as follows: Accounts Payable
Miscellaneous Expense Accounts Receivable Prepaid Insurance Cash Rent Expense Equipment
Supplies Fees Earned Supplies

Prepare journal entries for each of the following: a. Issued a check to establish a petty cash fund
of $300. b. The amount of cash in the petty cash fund is $95. Issued a check to replenish the
fund, based on the following summary of petty cash receipts: store supplies, $120 and
miscellaneous selling expense, $75. Reco

Based upon the data presented in Exercise 2-4, prepare an unadjusted trial balance, listing the
accounts in their proper order.

What is the difference between an account and a ledger?

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The following data were gathered to use in reconciling the bank account of Crescent Moon
Company: Balance per bank $11,200 Balance per company records 9,295 Bank service charges
25 Deposit in transit 1,650 NSF check 600 Outstanding checks 4,180 a. What is the ad

Airline pricing, considerations other than cost in pricing. Air Americo is about to introduce a
daily round-trip flight from New York to Los Angeles and is determining how it should price its
round-trip tickets. The market research group at Air Americo segments the market into business
and pleasure travelers. It provid

Prepare journal entries for each of the following: a. Issued a check to establish a petty cash fund
of $500. b. The amount of cash in the petty cash fund is $140. Issued a check to replenish the
fund, based on the following summary of petty cash receipts: repair expense, $260 and
miscellaneous selling expense, $84. Rec

Identify each of the following as relating to (a) The control environment, (b) Control procedures,
or (c) Monitoring. 1. Hiring of external auditors to review the adequacy of controls 2. Personnel
policies 3. Safeguarding inventory in a locked warehouse

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The following errors took place in journalizing and posting transactions: a. The receipt of $6,480
for services rendered was recorded as a debit to Accounts Receivable and a credit to Fees
Earned. b. The purchase of supplies of $1,960 on account was recorded as a debit to Office
Equipment and a credit to Supplies. Jour

The accounting clerk pays all obligations by pre-numbered checks. What are the strengths and
weaknesses in the internal control over cash payments in this situation?

Identify the errors in the following trial balance. All accounts have normalbalances.

Why should the responsibility for a sequence of related operations be divided among different
persons? Explain.

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State for each account whether it is likely to have (a) Debit entries only, (b) Credit entries only,
or (c) Both debit and credit entries. Also, indicate its normal balance. 1. Accounts Receivable 2.
Commissions Earned 3. Notes Payable 4. Susan Wilks, Capital 5. Unearned Rent 6. Wages
Expense

The following data were adapted from the financial statements of Kmart Corporation, prior to its
filing for bankruptcy: a. Prepare a horizontal analysis for the income statement showing the
amount and percent of change in each of the following: 1. Sales 2. Cost of sales 3. Selling,
general, and administrative expenses

What is the role of the World Trade Organization?

What are the characteristics of facilitators? List and define the major types of facilitators.

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In what areas have technological advances had their greatest effect on facilitating world trade
and investment?

(a) How are cash equivalents reported in the financial statements? (b) What are some examples
of cash equivalents?

The following table summarizes the rules of debit and credit. For each of the items (a) through
(l), indicate whether the proper answer is a debit or acredit.

1. Is the sampling method adequate? Is the attitude-measuring scale sound? Explain. 2. Using the
computerized database with a statistical software package, calculate the means of the three
automotive groups for the values variables. Do any of the values variables show significant
differences between American, Japanese,

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Visit the Whirlpool Corporation (www.whirlpool.com) and click on “International Sites”.
Whirlpool has a complex value chain. Based on the information provided at the Web site,
address the following questions: What types of upstream (for example, R&D, sourcing,
manufacturing) value-chain activities does Whirlpool pe

Recently, a university sponsored a roundtable on the broader implications of international

business. The participants were an anti-international business activist, a business executive with
extensive international dealings, and a government trade official. Excerpts from the exchange
present the diverse perspectives of

Define market globalization. What are the underlying dimensions of this megatrend?

Suppose you work for a multinational firm and are posted to Bogota, Colombia. After renting a
house in a posh neighborhood, you hire a full-time maid to perform household chores, a common
practice among wealthy Colombians. A colleague at work tells you local maids are typically
poor women who live in Bogota’s slums a

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What are the pros and cons of globalization?

What are the implications of globalization for company internationalization?

Distinguish between socialization and acculturation.

What are the specific characteristics of focal firms? Distinguish the characteristics of
international MNEs, SMEs, and born global firms.

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What is intellectual property? What industries are most affected by threats to intellectual
property?

Various Web sites list cultural blunders or faux pas (false steps) people make in their
international interactions. Neglecting to develop relationships (as in “Just sign the contract,
I’m in a hurry!”) and making too-casual use of first names (as in “Just call me Bill!
”) are examples of such blunders. Researc

1. Perform the appropriate multivariate technique to identify underlying dimensions that may
exist among the emotion ratings. 2. Create scales for any underlying dimensions. 3. Use these
scales as independent variables in a regression model. 4. Interpret the results. Use the data
labeled profit for this case. The data

1. Does this grant present Dr. Ray with an ethical dilemma(s) in any way? 2. Derive at least one
hypothesis for each research question listed above. Provide a sound rationale or theoretical
explanation that leads to the hypothesis. 3. Use the data that corresponds to this case to perform
an adequate test of each hypoth

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What is the difference between a basic business research paper and an applied research report?

You have become the president of the International Business Club at your school. You are trying
to recruit new members and find that many students do not recognize the importance of
international business or the career opportunities available to them. You decide to give a
presentation on this theme. Prepare an outline

Identify and briefly define the three major categories of participants in international business.

A key characteristic of globalization is the increasingly integrated world economy. MNEs and
many nations have a vested interest in maintaining the globalization trend. If the trend were
somehow reversed, participants in international business, such as exporters, would likely suffer
big economic losses. In many ways, g

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Why should you care about international business?

What advantages do firms gain from behaving according to high ethical standards?

Focal firms, distribution channel intermediaries, and facilitators each assume a different and
critical role in the performance of international business transactions. Think about the degree of
interdependency that exists among these groups. What would happen if distribution channel
intermediaries could not provide com

The KOF Swiss Economic Institute prepares the annual KOF Index of Globalization, which
ranks the most globalized countries (enter “KOF Index of Globalization” at
globalEDGEâ„¢ or other search engine). The index uses three different dimensions to measure
globalization: economic globalization, political globalization

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What are the various types of risks that firms face when they conduct international business?

1. Develop at least three hypotheses that correspond to the research questions. 2. Test the
hypotheses using an appropriate statistical approach. 3. Suppose the researcher is curious about
how the feelings captured with the semantic differentials influence the dependent variables
SPEND and KEEP. Conduct an analysis to

1. Describe the various services provided by logistics service providers. What is the role of these
services in focal firms’ value-chain activities? 2. Supply-chain management has evolved over
time, largely due to globalization and technological advances. What does the future hold? Can
you anticipate changes to the s

Summarize the three major guidelines for success in cross-cultural settings.

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A researcher working for Hi Time prepares a bar chart comparing the number of customers
visiting two competing booths at a fashion trade show. One booth is the Hi Time booth, and the
other is for a competing company, So Cool. First, the chart is prepared as shown here: In
preparing for a presentation to the Hi Time

Use the multistep process to interpret the regression results below. This model has been run by a
researcher trying to explain customer loyalty to a restaurant. The independent variables are
customer perceptions of value, atmosphere, quality, and a location variable labeled center. This
is a dummy variable that takes t

How is the number of factors decided in most EFA programs?

In the stages of a typical international value chain, what role does each of the three categories of
participants typically play?

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1. What types of tests can be performed using the data that may at least indirectly address the
primary research question? 2. What do you think the primary conclusions of the white paper will
be based on the data provided? 3. Assuming a small college town lacked an auto dealership
(beyond Ford, GM, and Chrysler), what

’NET Go to www.census.gov and examine some of the tables for your area. Cut and paste
the table into a spreadsheet or statistical program. Run one dependence and one interdependence
technique on the data. Interpret the results.

What is unique about such focal firms as franchisors, licensors, and turnkey contractors?

What is the difference between a multinational enterprise (MNE) and a small and medium-sized
enterprise (SME)?

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What are major distribution channel intermediaries based in the home country and those based
abroad?

Why is it important to think of the research report from a communications perspective?

The Web sites for Lenovo (China; www.lenovo.com), Nokia (Finland; www.nokia.com ), and
Banco do Brasil (Brazil; www.bb.com.br, click on ‘English’) contain substantial
information about how these firms undertake corporate social responsibility (CSR). Visit each
Web site and write a report in which you compare and co

Summarize the six dimensions of globalization. Which of these do you think is the most visible
manifestation of globalization?

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Royal Dutch Shell has been doing business in Nigeria since the 1920s and has announced new
plans to develop oil and gas projects there. However, over the years Shell has experienced a
series of complex issues. Its operations are centered in Nigeria’s Ogoni region, where the
local citizens have protested Shell’s dri

Describe the five drivers of globalization.

What rules should be followed when preparing slides for computer-generated presentations?

Distinguish the three layers of culture. What are the major elements of country-level and
professional culture?

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Assume that after graduation you get a job at Kokanee Corporation, an SME that manufactures
Italian tile, granite countertops, and other high-quality building materials for residential
construction projects. Your boss, Eugenia Kimball, wants to begin exporting Kokanee’s
products to foreign markets. Prepare a memo for

Explain why culture matters in international business. In what types of contexts can cross-
cultural differences cause concerns for managers?

You have recently been hired by a smaller firm that is beginning to expand internationally. When
first starting out, most firms choose exporting as their main foreign market entry strategy.
However, no one in your firm knows how to conduct exporting. Therefore, your boss has given
you an assignment: Prepare a presentat

Interpret the managerial significance of the ANOVA and multiple discriminant analysis results.
Data came from a survey of adult residents of a large western metropolitan area. Respondents
were selected in accordance with a quota sample of the area that was based on the age and sex
characteristics reported in the most

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You can gain valuable insights into international business by examining how countries compare
to each other. Various research groups and international agencies systematically examine
economic, political, and other features of nations and provide annual rankings. Visit
globalEDGE™ Resource Desk and click on “Researc

Is globalization a recent phenomenon? Describe the phases of globalization.

What effect does globalization have on national sovereignty, employment, the poor, the natural
environment, and national culture?

Richard Bendix is the marketing manager at a firm that makes and sells high-quality
prefabricated houses. He believes that there is little difference between his home-country market
and foreign markets and that he can use the same methods for selling in Asia or Latin America as
he does in his home country. Write a memo

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Interpret the following GLM results. Following from an example in the chapter, Performance is
the performance rating for a business unit manager. Sales are a measure of the average sales for
that unit. Experience is the number of years the manager has been in the industry. The variable
dummy has been added. This variab

Your company is about to initiate export activities in a country of your choice. You will need to
identify distribution channel intermediaries and freight forwarders to facilitate the distribution
and delivery of your products to end users in this country. Visit the Resource Desk and
Diagnostic Tools directories of glo

Describe typical ethical problems that firms encounter in international business

A researcher uses multiple regression to predict a client’s sales volume based on gross
domestic product, personal income, disposable personal income, unemployment, and the
consumer price index. What problems might be anticipated with this multiple regression model?

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Transparency International (www.transparency.org) publishes information about the nature of

corruption around the world. Suppose you worked at a firm that makes computer software and
wanted to begin doing business in Brazil and Russia. Your task is to examine reports and indices
on these countries at the Transparency I

Visit the government agency or ministry in your country responsible for supporting international
business. For example, in the United States, visit the Department of Commerce (www.doc.gov).
In Canada, visit Industry Canada (www.ic.gc.ca). In Denmark, visit the Ministry of Economic
and Business Affairs. Identify and des
Northern Energy, Inc. (Northern) is a large oil company with production and marketing
operations worldwide. You are a recently hired manager at Northern’s subsidiary in Nigeria,
which provides jobs to hundreds of Nigerians and supports many local merchants and suppliers.
Suppose Northern’s drilling and refining pra

Suppose you get a job at Kismet Indemnity, a life insurance company. In its 45-year history,
Kismet has never done any international business. Now its president, Randall Fraser, wants to
expand abroad. You have noted in meetings that he seems to lack much awareness of the role of
culture. Write a memo to him in which y

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You were recently hired by ThunderCat Corporation, a major aircraft producer with a
manufacturing presence in numerous countries. ThunderCat’s sales personnel constantly
travel the world, selling fighter jets and commercial aircraft to airlines and foreign governments.
You are keenly aware that countries vary enormou

As a manager, what degree of formality would you want from your research department?

What is the difference between exporting and foreign direct investment?

What is multidimensional scaling? When might a researcher use this technique?

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What is cluster analysis? When might a researcher use this technique?

Imagine you are studying for your international business class at a local coffee shop. The
manager spies your textbook and remarks, “I don’t get all that foreign business stuff. I
don’t pay much attention to it. I’m a local guy running a small business. Thank goodness
I don’t have to worry about any of that.â

What are the two major perceptions of time, and how does each affect international business?

Globalization provides numerous advantages to businesses and consumers around the world. At
the same time, some critics believe globalization is harming various aspects of life and
commerce. In what ways is globalization good for firms and consumers? In what ways is
globalization harmful to firms and consumers?

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What role do governments play in international business? What are the characteristics of
sovereign wealth funds?

Who are the major participants in international business?

The American International Group (AIG) is the largest insurance company in the United States.
In the recent global financial crisis, AIG faced financial ruin. Thus, the U.S. government used
taxpayer money to loan AIG more than $170 billion in exchange for an 80 percent stake in the
firm. A few months later, it was reve

Distinguish between cultural metaphors and stereotypes.

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People tend to see other cultures from their own point of view. They accept their own culture and
its ways as the norm—everything else seems foreign, or even mysterious. This chapter
described a technique called critical incident analysis (CIA) that encourages an objective reaction
to cultural differences by helping

What are the five dimensions that make up Hofstede’s model of culture?

Interpret the following factor analysis results. The variables represent sample results of self-
reported emotions while viewing a film. Why are only two factors reported below? What would
you name the two summated scales which could be produced based on theseresults?

Various organizations have devised international standards for ethical corporate behavior. These
include the United Nations “Universal Declaration for Human Rights” (available at
www.un.org), the OECD’s “Guidelines for Multinational Enterprise” (www.oecd.org),
the International Labour Organization’s “Mini

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How does a manager with a deal orientation differ from a manager with a relationship
orientation?

What is the Corruption Perceptions Index, and how can a manager use it to assess international
risk?

What types of tables might be used to describe some of the statistical tests discussed in previous
chapters?

1. Most aspects of foreign culture, like language, religion, gender roles, and problem-solving
strategies, are hard for the casual observer to understand. In what ways do Hollywood movies
affect national culture outside the United States? What aspects of U.S. culture do Hollywood
films promote around the world? Can you

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1. What does the case suggest is the value of ethical behavior? What did Siemens gain by
introducing controls to minimize the likelihood of corruption? 2. Most countries lack adequate
laws or enforcement to deal with bribery and other forms of corruption. Why is this? How do
countries benefit from a strong rule of law

What role do distribution channel intermediaries fulfill?

Suppose that after graduation you get a job with Cottonwood Corporation, a small firm that does
business only in its domestic market. You have just completed coursework in international
business, are aware of various business opportunities abroad, and believe that Cottonwood
should internationalize. Write a memo to you

Distinguish between international business and globalization of markets.

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Ethnologue (www.ethnologue.com/web.asp) is a site that lists the world’s known languages.

It is an excellent resource for scholars and others with language interests and contains statistical
summaries of the number of language speakers by language size, family, and country. Using
Ethnologue, try the following: a. Vis

What are online intermediaries? How do focal firms use the Internet to carry out international
activities?

Name at least two multivariate techniques that can be useful in constructing perceptual maps.

Describe culture and cross-cultural risk.

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1. What is the nature of the international business environments Harley faces? What types of
risks does the firm face? 2. How can Harley benefit from expanding abroad? What types of
advantages can the firm obtain? What advantages acquired abroad can help Harley improve its
performance in its home market? 3. How can Har

What makes international business different from domestic business?

In this chapter, we reviewed the four major risks that firms face in international business: cross
cultural risk, country risk, currency risk, and commercial risk. Identify one or more countries that
interest you, then visit globalEDGEâ„¢ and research the countries to uncover examples of each
of the four types of risks

1. What are the key elements of the Turner Field marketing effort? 2. What aspect of the
planning of Turner Field, home of the Atlanta Braves, may have been influenced by research
using secondary data? 3. What role should business research play in a sporting organization such
as the Atlanta Braves, both in making capit

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What ethical concerns arise when you prepare (or read) a report?

You are Vice President of Manufacturing at MicroKey Company, a major producer of computer
keyboards with factories in various countries that provide jobs to thousands of local residents.
The firm imports many of the raw materials used to manufacture its keyboards abroad. At one of
its factories in Russia, MicroKey has

Distinguish between ethics and corruption in international business.

Interpret the following regression results. All of the variables are the same as in number 2. These
results are produced with a regression program instead of the GLM-univariate ANOVA program.
a. What do you notice when the results are compared to those in number 2? Comment. b. List the
independent variables in order fr

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What is a pie chart? What is a bar chart? When might one be preferable over the other?

Service sector jobs are increasingly outsourced to lower-cost locations abroad. The
globalEDGEâ„¢ Web site has various resources that detail the nature and location of jobs that
have been transferred abroad. Some experts believe the resulting foreign investment and
increased demand in lower-cost countries will cause wa

What are some of the key motivations for firms to engage in international business?

Cultural intelligence is a person’s ability to function effectively in situations characterized by

cultural diversity. globalEDGEâ„¢ and other online resources feature cultural intelligence scales.
What are the components of cultural intelligence? Answer the questions on this scale and
calculate your score on cultura

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Describe the major characteristics of the EU and NAFTA.

What is the relationship between political freedom and economic freedom?

The United States imposed a trade and investment embargo on Iran. U.S. citizens were barred
from doing business with Iran. Proponents argue the embargo is justified because Iran has
supported terrorism and is developing nuclear weapons. However, critics condemn the trade
sanctions. First, they argue the sanctions repre

Describe the various risks and challenges encountered in emerging markets.

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TelComm Corporation is a manufacturer of components for the cell phone industry.
TelComm’s founder, Mr. Alex Bell, is interested in exporting the firm’s products to
China. He heard that China has the world’s largest population of cell phone users and wants
to enter the market. But TelComm has little international

What is a regional economic integration bloc (also called an economic bloc)?

What is the role of free trade agreements in the formation of economic blocs?

There has been much opposition to the Free Trade Area of the Americas (FTAA). For a sampling
of arguments against this proposed pact, visit www.globalexchange.org, www.citizenstrade.org ,
and www.corpwatch.org . Also visit the official site of the FTAA at www.ftaa-alca.org , or
obtain information on the proposed pact

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Assume you are a manager at a firm interested in doing business in Russia. As part of your initial
analysis, top management would like to know about the level of currency and financial risks
associated with the Russian market. Using resources at globalEDGEâ„¢, write a short report on
the current status of these risks,

Explain why firms want to do business in emerging markets. What makes these markets
attractive?

Distinguish between convertible and nonconvertible currencies.

How can managers estimate the true market potential of emerging markets?

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1. China has the most comparative advantages in producing apparel. Free trade theory implies
that retailers should import clothing from the most efficient country. Given this, and potential
drawbacks of regional integration, would it be better to allow free trade to take its natural
course? That is, should DRCAFTA be r

Your firm is considering exporting to two countries: Kenya and Vietnam. However,
management’s knowledge about the trade policies of these countries is limited. Conduct a
search at globalEDGEâ„¢ to identify the current import policies, tariffs, and restrictions in these
countries. Prepare a brief report on your findin

1. Where do you stand? Do you think EU subsidies and soft loans to Airbus are fair? Why or
why not? What advantages does Airbus gain from free financial support from the EU
governments? Are complaints about EU subsidies fair in light of Europe’s history of
democratic socialism? 2. Do you believe U.S. military contrac
The three groups of countries described in this chapter can be contrasted in terms of degree of
economic freedom. Economic freedom refers to the extent to which economic activities in a
nation can take place freely and without government restrictions. The Heritage Foundation
provides an Index of Economic Freedom (www.h

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How has government intervention evolved during the global financial crisis?

What are advanced economies, developing economies, and emerging markets? What are the
major distinctions among these three country groups?

Describe the major types of legal systems. Which systems are most widely encountered?

CBKing has been trying to export its products to various emerging markets and has enjoyed little
success so far. You know a lot about emerging markets and have been anxious to share your
views with CBKing’s president, Mr. Roger Wilko. What strategies would you recommend
Roger pursue in doing business with emerging ma

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Everest Company has been exporting its line of mountain-climbing equipment to buyers
worldwide for 30 years. Top markets include France, Norway, Switzerland, India, and Japan.
Customers in these countries always pay in their local currency. Everest’s vice president for
international sales often states that the firmâ€

Describe the process for selling to foreign governments and state enterprises.

Distinguish between countervailing duties and antidumping duties.

Explain the drawbacks and ethical dilemmas of regional integration for nations. Explain the
drawbacks and ethical dilemmas for firms.

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What is an ethical dilemma? Give an example of an ethical dilemma that MNEs encounter
abroad.

What strategies should companies employ to maximize the benefits of regional integration?

When companies venture abroad, managers seek information on the legal and political
environments in each country. This information is available from various Web sources, as
illustrated in the following exercises. (I) Suppose you want to sign up distributors in the
European Union and want to learn about EU contract law.
NAFTA is a free trade area, and the EU is a common market. Visit the Web sites of these two
economic blocs, www.nafta-sec-alena.org and www.europa.eu, and explain the business strategy
implications of each type of economic bloc. Small and medium-sized enterprises (SMEs) tend to
be disadvantaged when it comes to compet

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What are the major types of nontariff trade barriers? Suggest business strategies for minimizing
the effect of nontariff trade barriers.

1. Explain the advantages and disadvantages of the globalization of finance. How did it
contribute to the global financial crisis? 2. Describe how the fall of AIG exemplifies contagion.
How did the U.S. government bailout of AIG benefit foreign as well as U.S. firms and investors?
Experts are advocating increased regul

The Office of the U.S. Trade Representative (USTR) is responsible for developing and
coordinating United States international trade and investment policies. Visit the USTR Web site
from globalEDGE™ or directly (www.ustr.gov ). Search for “National Trade Estimate
Report” for the latest year. This document summariz

How can firms show corporate social responsibility in emerging markets and developing
economies?

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Distinguish between trade creation and trade diversion.

Doing business in emerging markets involves strategies that are often distinct from those of other
international venues. What types of business approaches can firms use when doing business in
emerging markets?

Suppose you get a job at Aoki Corporation, a firm that manufactures glass for industrial and
consumer markets. Aoki is a large firm but has little international experience. Senior managers
are considering a plan to move Aoki’s manufacturing to China, Mexico, or Eastern Europe
and to begin selling its glass in Latin A

For business enterprises to thrive, some minimum conditions must be present, including
recognition of private property rights and limited government intervention. To what extent may
totalitarianism, socialism, and democracy interfere with the ideal commercial environment for
firms?

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Pharmaceutical firms engage in large-scale, intensive R&D to create and market drugs meant to
treat everything from cancer to hair loss. Thousands of pharmaceutical drugs allow people to live
longer and healthier lives. Europe and the United States are home to the major pharmaceutical
firms and to industry R&D. They be

What is corporate social responsibility (CSR)? How does it differ from general ethical behavior?