International Business The Challenge of Global Competition 13th Edition Donald Ball - Test Bank

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FALSE

Cheese and chocolates can be manufactured from dairy with low-volume imports and large amounts of value added.

TRUE

Porter’s diamond illustrates the variables affecting competitive advantage, and one of them is factor conditions (including geography and natural resources).
Refer To: Figure 5.1, Variables affecting competitive advantage: Porter’s diamond

FALSE

Porter’s diamond, especially with factor conditions differentiated into basic and advanced, explains Switzerland’s success as an exporting country.

TRUE

This is the case, and Switzerland is a good example.

FALSE

Learning location is a basic factor condition and helps to explain many of a country’s political and trade relationships.

FALSE

Austria was neutral in the Cold War, and this led to its role as a bridge between East and West.

FALSE

To the contrary, geographical proximity often explains trade relationships.

TRUE

Topography contributes to differences in economies, and mountains and flatlands are a part of that.

TRUE

These barriers include the Hindu Kush, and they provide barriers between the two countries, as well as refuge, incidentally.
<<AU: Pls reword the second hilite to avoid “barriers… provide barriers”>>

TRUE

In addition, Spain and Afghanistan are in a similar situation.

TRUE

This is directly from the text.

FALSE

Bodies of water facilitate trade; they bring people closer.

FALSE

This explanation is known as the North-South divide, and its ethnocentric reasoning is problematic. The text explains that factors such as the Industrial Revolution, amplified by feedback loops, are the cause of developmental differences. See Jared Diamond’s Guns, Germs and Steel.

FALSE

Thermal is renewable.

TRUE

This is an accurate statement.
Refer To: Figure 5.13, Marketed energy use by fuel type

TRUE

Figure 5.14 illustrates this relationship, which is mentioned in the text.
Refer To: Figure 5.14, Marketed energy use by region

FALSE

Heavy oil includes oil sands, and oil-bearing shale, natural gas, and coal.

TRUE

This statement is factual.
Refer To: Table 5.1, World oil reserves by country

TRUE

This is interesting from a business perspective. The text points out that, increasingly, oil reserves are controlled by governments that limit the access of the major oil companies.
Refer To: Figure 5.15, Worldwide proven oil reserves by investment risk

TRUE

France has invested heavily in nuclear and produces 75 percent of its electricity by nuclear power generation.

FALSE

Just the opposite. Coal consumption is projected to increase 49 percent through 2030. The United States has the largest coal reserves, and presently they are projected to last for 134 years at current consumption rates.

FALSE

Biomass is a category of fuels based on photosynthesis, using the sun’s energy to create chemical energy via plants. Weight is not a part of the issue.

FALSE

Sustainable approaches usually involve ecological, social, and economic aspects, but the notion of the mentioned trade-offs is not a part of the analysis.

TRUE

Sustainability in business involves recognizing that there are limits to environmental resources; that the economic, social, and ecological systems are interdependent; and that for the interdependence to work, there has to be greater equity in distribution than there is now in many areas.

FALSE

The stakeholder model has not failed. It is regarded as a helpful model because it forces businesses to address the underlying values and principles of their business.

FALSE

Merton’s quote links compassion and sustainability through interdependence.

FALSE

Both of these sources of energy are projected to increase.
Refer To: Figure 5.17, Coal consumption in selected world regions, 1980-2030
Refer To: Figure 5.18, Renewable power capacities, developing world, EU, and top six countries

FALSE

Stakeholder theory assumes that balancing these competing tensions among stakeholders is possible and desirable.

TRUE

Triple-bottom-line reporting is an example of sustainability’s three aspects: economic, social, and environmental.

TRUE

Interface has developed a business model that accepts responsibility for sustainability.

TRUE

The environment involves systems that are local and global at the same time. France does not produce many greenhouse gas emissions, but it is affected by emissions produced by other industrial countries.

FALSE

These are the interconnected systems in which businesses operate.

TRUE

These three characteristics are at the core of sustainable business practices.

These characteristics are at the core of sustainable business practice.

Stakeholder theory differs from the input-process-output model because it looks at these tensions, both internal and external.

Stakeholder theory forces businesses to recognize their underlying values, including what kind of relationships they want to create with their stakeholders.

Interface has a remarkable environmental record, especially since its major input is petroleum.

Patagonia recognizes that GAAP accounting does not include negative externalities that the business has impacted or contributed to, such as environmental degradation and social ills.

“A company that is taking the long view must accept that it has an obligation to minimize its impact on the natural environment.”

Examples of this are present in Afghanistan, Switzerland, China, and Colombia (dialects).

Factor conditions are divided into basic and advanced.

The existence of mountain ranges influences the Swiss export patterns.

All of these characteristics are present with geographical proximity.

This is directly from the text: Topography influences distribution.

In addition to Switzerland, Afghanistan, China, and Colombia, the text mentions Spain.

Spain is given as an extended example; the same issues are found in China, Switzerland, and Afghanistan.

This is mentioned directly in the text.
Refer To: Figure 5.8, Land use map of Australia

Population centers are closer, communication systems are better, and the labor market is richer.

This is directly from the text and supported by Figure 5.9.
Refer To: Figure 5.9, World population map

Climate sets the limits on what people can do.

Continuous heat and no cold winter temperatures offer an ideal environment for parasites, viruses, weeds, and insects, all of which contribute to factors responsible for underdevelopment.

The text describes petroleum reserves as expected to run out in 50 years and then lists mediating issues: automated equipment, refined extraction techniques, and more land open to exploration.

This material is directly from Table 5.1, its first four entries.
<<AU: add “oil” before hilite?>>
Refer To: Table 5.1 World oil reserves by country

Heavy oil is oil that is obtained from unconventional sources and usually through additional processing involving heating and pressure treatments. It does not flow easily and cannot be obtained from wells, as can conventional oil.
<<AU: Pls add a fourth answer choice here.>>

Although nuclear power as an energy source was expected to decline because of safety and security issues, especially after the Japanese nuclear disaster in 2011, it has grown substantially, especially in the developing world and in France.

Although coal does pollute heavily, its use is increasing, as illustrated in Figure 5.17.
Refer To: Figure 5.17, Coal consumption in selected world regions

They will eventually replace fossil fuels, and their growth rates are greater than nonrenewables in the United States and Europe. They are not all available everywhere, but some applications are available everywhere.
Refer To: Figure 5.19, Share of global electricity from renewable energy

Europe has made the greatest investment in renewables, as Figure 5.18 shows. European new investment in renewables in 2008 was about 66 percent greater than U.S. investment.
Refer To: Figure 5.18, Renewable power capacities, developing world, EU, and top six countries

All of these statements are accurate. China actually controls many of the nonfuel mineral markets, including the rare earth minerals.
Refer To: Table 5.2 U.S. minerals ranked by net import reliance, 2010

The text example of France illustrates this point. Here’s a national-level example: New England is a low polluter, yet suffers from acid rain caused by Midwest carbon emissions.

Limits involve a recognition that resources are exhaustible; interdependence describes the relationships among ecological, social, and economic systems; and equity in distribution suggests that for interdependence to work, there can’t be vast differences in the distribution of gains.

This is taken from a quote in the text, a recognition of the need for substantive change from one of the major leaders of a global business.

This is the basic description of stakeholder theory used in the text.

Triple-bottom-line accounting measures a company’s social and environmental performance, as well as the traditional economic performance.

Patagonia is described as an environmentally sustainable business in the text.

Porter’s diamond helps to explain differences in competitive advantage.
Refer To: Figure 5.1, Variables affecting competitive advantage: Porter’s diamond

Proximity leads to better knowledge of the neighbor and lower transportation costs.

Climate establishes limits for what humans can do, physically and economically.

Unlike other waterways, whose importance has diminished relative to roads and railroads, the Rhine waterway’s importance is increasing. It is the world’s most important inland waterway system.
Refer To: Figure 5.10, map of the Rhine-Danube Canal

Inland waterways such as major rivers and lake systems are significant in every continent except Australia.

Australia, with its inland plain and desert topography, has no inland waterways.

The North-South divide suggests incorrectly that warmer climates limit human energy and mental powers.

Weeds, birds, insects, viruses, and parasites result in destroyed crops, dead cattle, and people infected with debilitating diseases.

Refer to the margin definition: anything supplied by nature on which people depend.

Nonrenewable energy sources dominate marketed energy sources.
Refer To: Figure 5.13, World marketed energy use by fuel type

The revolution is slow but underway, according to the IEA.

These unconventional sources of oil become reasonable alternatives for sourcing oil as its price increases.

Oil-bearing shale is not yet economical, but it will become so as the price of oil increases. The largest known source is in the U.S. states of Utah, Wyoming, and Colorado.

Most of the proven oil reserves are located in high-investment-risk areas.
Refer To: Table 5.1, World oil reserves by country
Refer To: Figure 5.15, Worldwide proven oil reserves by investment risk

This process is successfully employed in Nigeria, China, Germany, India, and other places by Sasol.

Nuclear power generation has seen growth, largely because of its cleanliness. There are security and storage issues, but developing countries and France have invested heavily in its continued development. The Japanese disaster may well have an impact on this trend.

Coal use was expected to decline, but, especially in developing countries, its use has increased and is expected to continue doing so. The United States has generous coal reserves, and its use is increasing there, as well.
Refer To: Figure 5.17, Coal consumption in selected world regions

Greenhouse gases generated by coal contribute to global warming. The U.S. concern appears to be one of sovereignty, giving up the nation’s power to the UN.

Natural gas is cleaner than oil, it burns with fewer emissions, and its consumption is expected to increase 47 percent through 2030.

Wind power can be sourced on land or at sea.

Solar is the fastest-growing renewable energy source.

The United States imports many of these nonfuel minerals. Recently China has threatened export controls on its exports of rare earths and other nonfuel minerals.
Refer To: Table 5.4, U.S. minerals ranked by net import reliance

Mountainous areas of China have led to many different languages with many dialects. See Figure 5.6.

Both deserts and tropical forests separate markets.

Porter makes this distinction to make the point that factor conditions can be modified.

There are 17 rare-earth elements that are used for technology applications.

China controls this export market, which may be a liability for the United States.

Rare earths are not uncommon; they are not often found in concentrations that makes their mining commercially viable.

In Europe, the onus of proof is on the manufacturer.

Sustainability is all about ensuring that businesses continue to prosper for future generations.

Answers will vary. Switzerland is the model for this question, as treated in the text. The United States might be used to show the relationship between its coasts and its innovation centers, the coastal areas being more open to innovative thinking because they receive external stimuli.

Feedback: This question gives students an opportunity to apply concepts from the text to another environment. Critical thinking is significant here. The chapter’s example of Switzerland might serve students as a model.

Topography greatly influences many aspects of business, especially in the marketing area. Mountains, plains, deserts, and bodies of water either hinder or aid distribution. In addition, altitude, temperature, and humidity differences can require product adaptation.

Feedback: Students will be able to apply the topography-related issues presented in the text to marketing environments. Critical thinking and reasoning skills are significant here.

Sustainability in business suggests that the business recognize limits, interdependence, and equity. Limits in the environmental impact of the business would need to be recognized. The interdependence describes the relationships among social, economic, and ecological systems. Equity suggests that distribution of the gains created by the business needs to be more equitable in order to sustain the interdependence. Examples could be drawn from Interface, Patagonia, or any other business.

Feedback: The basic ideas for this topic are at the final part of the chapter.

Outlets to the ocean are critical for trade and for access to water. Landlocked nations are at a disadvantage, yet one that can be overcome, as Switzerland illustrates. Many of the poorest nations are landlocked.

Feedback: Switzerland is a counterexample, so this question is an opportunity to explore Porter’s notion that weak factor conditions spur innovation; the better essays may touch on this. Thinking about the connection between trade and geography is central here.

Friedman’s assertion is that business needs to focus first and only on the bottom line and observe the law. This approach is in some respects antithetical to sustainability, which asks businesses not to narrowly focus but, rather, to take a wide, broad perspective, that of stakeholder theory.

Feedback: This question asks students to move from the traditional model to a stakeholder model and then make comparisons about the two ways of understanding the role of business.