Chapter 1: WHAT IS INTERNATIONAL BUSINESS?

1. In a short essay, explain the four trends that provide evidence for the globalization of markets.
Provide an example to illustrate one of the trends.
2. In a short essay, explain the meaning of international trade. Describe the two major forms through
which international trade takes place.
3. In a short essay, explain the main differences between international portfolio investment and foreign
direct investment.
4. What is meant by the term “entrepôt economies?” In a short essay, explain the concept and provide
an example.
5. In a short essay, describe the major trends in the growth of foreign direct investment (FDI) since the
1980s. Explain how foreign direct investment benefits the countries involved.
6. What are the main differences between products and services? In a short essay, explain the
difference between the two and provide three examples of each. Which sector has seen the greatest
growth in international trade in recent years?
7. In a short essay, identify three sectors in the service industry that are internationalizing rapidly.
Explain the types of activities conducted within each sector, and provide examples of three
companies that operate in each.
8. In a short essay, explain the cross-cultural risk faced by internationalizing firms. What causes this
type of risk? Why might it pose a problem for internationalizing firms?
9. In a short essay, discuss how international firms manage the four types of international business risk.
Provide an example that illustrates the process of risk management.
10. What distinguishes an MNE from an SME? In a short essay, describe the major differences between
the two types of firms.
11. In a short essay, explain the concept of the “born global” firm. Provide an example of a born global.
12. In a short essay, explain why non-profit organizations might conduct cross-border activities.
13. Why might firms pursue internationalization strategies? In a short essay, identify five major
motivations for expanding overseas. Classify these motivations as strategic or reactive and provide
an example of each.
14. In a short essay, explain the relationship between international trade and national prosperity. Provide
three examples to illustrate this relationship.
15. How have successful international businesses incorporated socially responsible practices as part of
their overseas expansion? In a short essay, explain why such practices are important and provide
three examples of companies implementing such practices.
Chapter 2 Globalization of Markets and Internationalization of the Firm
40. In a short essay, describe the four phases of globalization. Explain the major triggers for each phase.
41. In a short essay, explain the main reasons why firms pursue internationalization. Which type of firm
tends to be most successful in global competition?
42. In a short essay, describe the relationship between market globalization, societal phenomena, and
firm-level internationalization. Is market globalization a driver or a consequence of societal and
firm-level outcomes?
43. How do governments help promote international economic interdependence? In a short essay,
describe three ways that government activities increase economic integration and provide an
example that illustrates one approach
44. In a short essay, explain how market globalization both responds to and promotes the convergence of
consumer lifestyles around the world. Provide examples to illustrate your answer.

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45. In a short essay, describe the methods through which prices are driven down by firms that operate
internationally. Provide examples to illustrate these methods in both the products and services
sectors.
46. How has the adoption of free markets worldwide served as a driver of market globalization? Provide
three examples to support your answer.
47. In a short essay, explain how industrialization affects emerging market economies. Provide three
examples to support your explanation.
48. How does the integration of world financial markets help to increasing market globalization? In your
answer, provide an example of this driver at work.
49. In a short essay, explain three main benefits of e-business. Provide an example that illustrates the
benefits of e-business.
50. In a short essay, identify the four areas in which technological advances had their greatest impact on
business. Describe the impact of each area on business today.
51. In a short essay, describe three societal consequences of market globalization. Provide an example to
illustrate each consequence.
52. In a short essay, explain how a government’s open and liberal economic policies can help to
minimize the threats that MNEs pose to the country’s national sovereignty.
53. Is market globalization causing nations to become more culturally similar? In a short essay, explain
the arguments both for and against the idea that national cultures are becoming “homogenized.”
54. In a short essay, identify the six stages in a firm’s value chain. Explain the types of activities
involved in each stage, and provide an example that illustrates how activities in each stage can be
internationalized.
Chapter 3 Participants in International Business
18. In a short essay, describe the three major participants in international business. Explain how the
three work together in international business activities.
19. In a short essay, describe the relationship between MNEs and modern globalization. Provide an
example of an MNE which participates in the international business arena.
20. In a short essay, explain why SMEs now comprise the majority of firms active in international
business. How have logistics specialists facilitated the success of SMEs attempting to become
internationally active?
21. In a short essay, describe the three major types of cross-border transactions. Explain the three types
of focal firms that engage in international business and provide examples of each type.
22. In a short essay, explain the differences between franchisors, licensors, and turnkey contractors.
What factors determine the type of entry strategy used?
23. In a short essay, explain the meaning of the term international collaborative venture. How do these
arrangements benefit focal firms?
24. In a short essay, identify the tasks of distribution channel intermediaries when they are employed by
focal firms. Why do exporters rely on intermediaries?
25. In a short essay, describe the intermediary functions of agents and manufacturer’s representatives.
How are the two intermediaries similar?
26. In a short essay, discuss the reason that exporting firms often use trading companies as
intermediaries.
27. What is sogo shosha? In a short essay, explain the meaning of the term and provide examples of
sogo shosha.

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28. In a short essay, analyze the effect of trading companies on exports from the United States and
explain the possible reasons for this effect.
29.In a short essay, discuss the impact of the Internet on traditional intermediaries and on retail
businesses. Provide examples of retailers who have embraced the new technology and discuss how the
Internet has affected their retail business.
29. In a short essay, discuss the challenges faced by online retailers. Provide an example to illustrate
each challenge.
30. Most exporters use freight forwarders as facilitators in international business. In a short essay,
explain the ways in which freight forwarders benefit exporting businesses.
31. In a short essay, discuss the role of commercial banks in the world of international business.
Chapter 5 The Cultural Environment of International Business
1. In a short essay, explain some of the obstacles that international firms often face when dealing with
clients, customers, and business associates from other cultures.
2. How is culture like an iceberg? In a short essay, explain the relationship between the iceberg theory
and international business relationships.
3. In a short essay, describe three ways in which cross-cultural differences complicate workplace
issues. Provide examples to illustrate your answer.
4. Japanese automobile manufacturers consistently rank high in customer satisfaction surveys. In a
short essay, explain how the Japanese culture translates to well-built cars.
5. In a short essay, explain what is meant by the term corporate culture. Provide examples of
companies that have distinctive corporate cultures.
6. In a short essay, explain the difference between a high-context culture and a low-context culture.
Provide examples of how these terms relate to business relationships at the international level.
7. In a short essay, provide an overview of Hofstede’s “Four Dimensions of National Culture.”
8. What are some of the criticisms of Hofstede’s study? In a short essay, discuss the limitations of the
study, as well as Hofstede’s response to the criticism.
9. In a short essay, explain the difference between a deal-oriented culture and a relationship-oriented
culture. Provide examples of each to further illustrate your explanation.
10. How do cultural perceptions of time relate to international business? In a short essay, provide
examples of contrasting cultural time perceptions.
11. In a short essay, explain why the perception of personal space varies from culture to culture. Provide
examples of cultures with distinct perceptions of personal space and consider how these perceptions
affect the work environment.
12. In a short essay, explain how language affects international business. Consider both communicating
to the public and communicating to business associates in your answer.
13. In a short essay, describe some of the subtleties of language. Provide examples that relate to
international business situations.
14. Some people view globalization as a destructive force on culture and others see it as having a
positive effect. Explain these two positions in a short essay.
15. In a short essay, explain three ways that managers can achieve cross-cultural success.

Chapter 6: THEORIES OF INTERNATIONAL TRADE AND INVESTMENT

THEORIES OF INTERNATIONAL TRADE AND INVESTMENT

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1. In a short essay, identify the “comparative advantage” of Dubai. How has Dubai’s “comparative
advantage” allowed the nation to enhance its “competitive advantage”? Provide examples of
“competitive advantages” in Dubai.
2. In a short essay, describe the two leading theories of international trade and investment. What do
economists and scholars hope to learn from an analysis of international trade and investment?
3. In a short essay, explain what the world would be like without international trade.
4. In a short essay, contrast the theory of mercantilism with the theory of free trade. Why is free trade
preferred by most modern nations?
5. In a short essay, explain the “Absolute Advantage principle”. Provide an example of the principle at
work.
6. How does opportunity cost relate to comparative advantage? In a short essay, explain the connection
between the two terms and provide an example for illustration.
7. In a short essay, explain the factor proportions theory and provide an example for illustration
purposes. How does the theory differ from other international trade theories?
8. What is the connection between the competitive advantage of a firm and the competitive advantage
of a nation? In a short essay, explain the nature of the relationship between firms and nations.
9. What is the key contribution of Michael Porter’s work? In a short essay, summarize the four
elements of the “Diamond model”. Provide a specific example to illustrate each element.
10. Japan, New Zealand and Vietnam are three nations which have created national comparative
advantages. In a short essay, describe the different actions taken by each nation and the results of
their national industrial strategies.
11. In a short essay, explain the reasons why in recent years many firms internationalize early in their
development? What appears to be the current trend in international business?
12. In a short essay, explain the monopolistic advantage theory and provide a real world example. What
assumptions are made by proponents of this theory?
13. Why do some MNEs enter international markets through Foreign Direct Investment (FDI) instead of
through exporting? In a short essay, explain why P&G chose FDI-based entry. How does FDI-based
entry relate to internalization theory?
14. According to Dunning’s eclectic paradigm, an MNE must meet three conditions before successfully
entering a foreign market via foreign direct investment (FDI). Explain these conditions in a short
essay.
15. While foreign direct investment (FDI) was popular as a foreign market entry strategy in the 1960s
and1970s, collaborative ventures became a popular entry strategy in the 1980s. In a short essay,
describe the two major types of international collaborative ventures and explain the benefits of this
internationalization approach.

Chapter 7 Government Intervention in International Business

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5. What is the argument against protectionism? In a short essay, describe the negative effects to the
economy when a government intervenes in international trade.
6. In a short essay, explain the negative effects of high tariffs on international trade and business. How
do high tariffs impact economic growth?
7. What are quotas? In a short essay, explain the positive and negative effects of quotas. Provide an
example of a product that has been imposed with a quota.
8. In a short essay, explain why agricultural subsidies have been implemented in Europe and the United
States. What are the criticisms to these subsidies?
9. What are investment incentives? In a short essay, explain how these incentives are beneficial and
provide an example of an investment incentive.
10. In a short essay, explain how government intervention in the form of subsidies can be utilized to help
low-income groups. Provide an example of a nation in which this has occurred.
11. In a short essay, explain how the GATT changed international trade. What four elements were
initiated by the GATT?
12. In a short essay, explain the difficulties faced by the WTO in establishing tariff standards for
international services. How has the Doha Agenda affected the international service issues?
13. How are investment-based entry strategies affected by tariffs? In a short essay, provide an example
of an industry or firm that has minimized the burden of high tariffs.
14. In a short essay, explain how foreign trade zones work. How are FTZs utilized by firms?
15. What is the importance of a product’s customs classification? In a short essay, explain how
manufacturers can minimize tariffs through re-classification. Provide an example of an industry or
firm which benefited from re-classification.
Chapter 8 Regional Economic Integration
1. In a short essay, explain the purpose of regional economic integration. Why has it been a growing
trend since World War II? What are the intended results of regional integration?
2. In a short essay, explain the criticism regarding economic blocs. Why do some nations join
economic blocs instead of working towards freer global trade?
3. In a short essay, explain how custom unions work. What is an example of a customs union? What
are some of the difficulties faced by customs unions?
4. In a short essay, explain some of the difficulties involved with the creation of common markets.
Provide a specific example to illustrate your explanation.
5. In a short essay, describe three characteristics of the European Union.
6. In a short essay, describe the effect of the euro on the EU, consumers, and national governments.
7. In a short essay, describe the four steps taken by the EU in its quest towards becoming an economic
union.
8. In a short essay, name the five EU institutions and describe their functions.
9. In a short essay, explain how NAFTA has affected Mexico.
10. In a short essay, describe four reasons that nations seek regional integration. Provide an example to
illustrate each point.
11. In a short essay, describe the four characteristics typical of successful economic blocs. Which
12. In a short essay, explain the difference between trade creation and trade diversion. Create a trade
scenario to help illustrate your answer.
13. In a short essay, explain how external trade barriers harm members of an economic bloc.
14. In a short essay, explain how economic blocs might prove detrimental to small firms. Provide an
example of an industry or firm that was harmed as a result of regional integration.

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15. How does regional integration impact the products manufactured for an economic bloc? In a short
essay, explain how economic blocs enable firms to streamline their operations.