Which of the following is a major challenge often faced by focal firms that engage in global sourcing?
A) no control over the quality of outputs
B) domestic management of local distribution
C) increased costs of business travel
D) lower-than-expected cost savings
Question 2Which of the following terms refer to the application of home-country laws to persons or conduct outside national borders?
A) anti-boycott regulations
B) extraterritoriality
C) transparency
D) anti-dumping policies
Question 3Which of the following terms refers to two or more geographically connected nations in pursuit of free trade relations?
A) grey market
B) trading diaspora
C) economic bloc
D) business strategic unit
Question 4Which of the following is true with regard to the risks of global sourcing?
A) Inadequate legal systems, red tape, convoluted tax systems, and complex business regulations complicate local operations in many countries.
B) Firms that source from countries whose currencies are strengthening experience lower costs.
C) Global sourcing weakens competition leading to a considerably risk-free international business environment.
D) Environmental challenges exclude currency fluctuations, tariffs and other trade barriers, high energy and transportation costs.
Question 5Countries with weak legal environments can erode key strategic assets of firms.
Question 6Income repatriation laws affect MNEs that earn profits in foreign countries by ________.
A) enforcing strict stipulations on cross-border transactions and joint ventures
B) limiting the amount of net income or dividends that can be transferred to the home-country headquarters
C) restricting the amount of earned income being re-invested in the foreign facility
D) imposing restrictions on the distribution of products from the foreign facility
Question 7The level of integration of free trade areas is greater than that of customs unions.
Question 8MERCOSUR, an economic bloc in Latin America, is an example of an economic union.
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