Mid Term Answers

MGMT338, International Business, Test #1 sample answers, September 11, 2012 I. (6 pts) Leslie Igles is being sent to Guatemala as the new manager of a local subsidiary of a U.S. firm. She has a participatory management style and is known for her ability to relate to the workers by occasionally stepping in and working along side of them. Answer the following True and False questions using Hofstede’s Five Dimensions.
T F 1. This management style will not work well with Guatemala’s Power Distance rating.
Answer: T
T F 2. Uncertainty Avoidance levels in Guatemala will make it difficult for Leslie to make changes.
Answer: T
T F 3. The Individualism level in Guatemala is lower than in Sweden.
Answer: T
II. (57 pts) Select the best answer.
1. The major globalization drivers include all of the following except: A) Social B) Competitive C) Technological D) Market E) None. All of the above are major kinds of globalization drivers
Answer: A 2. Foreign Direct Investment A) is the same as Portfolio Investment. B) involves management participation and Portfolio Investment does not. C) has steadily increased since 2000. D) from developing nations substantially increased from 1990 to 2009. E) (B) and (D) above.
Answer: E
3. According to the theory of comparative advantage, A) a nation should produce the goods where its disadvantage is the least. B) nations can gain from trade if they are not equally efficient in producing two goods. C) a nation needs to have an absolute advantage in at least one good to gain from trade. D) only (B) and (C) above. E) only (A) and (B) above
Answer: E
4. The international business manager can choose to: 
A. transfer a