Chapter 3--The Global Environment

Student: ___________________________________________________________________________
1. Which industrialized nation emerged as the only intact major power after World War II?
A. The United States
B. Japan
C. Germany
D. Canada
E. Africa

2. All EXCEPT which of the following countries are considered the leading industrial powers in today's global
economy?
A. The United States
B. Japan
C. Germany
D. India
E. All of these are considered leading industrial powers.

3. Which of the following trends is NOT true of developed nations today (such as the United States, Japan, the
United Kingdom, and so on)?
A. Population growth is slowing.
B. International trade is expanding.
C. The labor force is growing quickly.
D. Competition from foreign countries is increasing.
E. Countries are becoming increasingly interdependent.

4. Which country is NOT experiencing rapid population growth?

A. China
B. Canada
C. India
D. Indonesia
E. Mexico

5. Under a geocentric staffing model,

A. host-country nationals are used heavily because they know the local markets.
B. the organization will have a skeleton human resource department at the host-country location, while the
home-country human resource department retains all control.
C. the organization seeks to hire the best person available for a position regardless of where the individual
comes from.
D. expatriate home-country nationals are hired to fill higher-level foreign positions.
E. the home-office perspective takes precedence over local issues.

6. Which international staffing model involves staffing high-level foreign jobs with parent-country nationals?
A. Globalcentric
B. Polycentric
C. Geocentric
D. Egocentric
E. None of these

7. No outplacement firms exist in several Middle Eastern countries because the religion of Islam specifies that
individuals should not benefit financially from other people's misfortunes. This cultural factor pertains to what
type of difference?
A. Language
B. Business practices
C. Children's rights
D. Roles
E. Personal norms

8. Dietrich prefers structured circumstances instead of situations that are relatively ambiguous. Which cultural
dimension does he exhibit?
A. Individualism
B. Collectivism
C. Masculinity
D. Time orientation
E. Uncertainty Avoidance

9. What aspect of international business do NAFTA and the EU represent?

A. Tariff systems
B. Economic communities
C. Trade controls
D. Export regulations
E. Quota guidelines

10. John prefers to work by himself on projects and avoids group work that requires him to monitor the actions
of others. He would score highly on the ____ dimension of Hofstede's model of culture.
A. power distance
B. individualism
C. masculinity
D. uncertainty avoidance
E. time orientation

11. Siemens has a complex matrix organization structure. Managers who have been with the company for years
and built relationships are the most effective. Someone with a cultural dimension of ______ is more likely to
experience success there.
A. femininity
B. uncertainty avoidance
C. time orientation
D. power distance
E. collectivism

12. What is the term used when a company lets a foreign firm make and/or distribute its products in a local
market?
A. Exporting
B. Licensing
C. Direct investment
D. Joint venture
E. Strategic alliance

13. Under which two approaches to international business will the human resource function be LEAST
affected?
A. Licensing and joint ventures
B. Direct investment and strategic alliances
C. Exporting and licensing
D. Joint ventures and strategic alliances
E. Exporting and direct investment

14. What is an advantage of direct investment in another country?

A. Less risk is involved.
B. It is not expensive.
C. There is more profit potential.
D. The facility is less integrated in the foreign market.
E. Synergy between business partners is achieved.

15. Under which international strategy will several companies agree to cooperate for mutual benefit?
A. Exporting
B. Importing
C. Direct investment
D. Multinational organization
E. Strategic alliance

16. Local issues that must be dealt with by firms conducting business in foreign markets include all of the
following EXCEPT
A. recruiting.
B. compensation.
C. selection.
D. human resource technology.
E. training.

17. Locating a facility in a relatively underdeveloped area will impact all of the following human resource
activities EXCEPT
A. training needs.
B. recruitment activities.
C. selection requirements.
D. development issues.
E. production design.

18. Celebrity Cruises is based in Florida, but it hires workers from various countries to communicate with and
serve guests from around the world. Which of the following is an accurate statement?
A. Celebrity will need to provide the same training to all of its foreign workers.
B. Celebrity will need to provide the same training to all of its workers.
C. Celebrity will need to tailor training to best develop workers from various countries.
D. Celebrity will not need to train its workers.
E. Celebrity will only need to train workers who have contact with customers; other workers need no training.

19. Prakash is a human resource manager for an Indian company that is building a manufacturing plant in
Singapore. The plant will be staffed with Indian managers and local workers. Which advice would NOT be
appropriate for Prakash?
A. You must understand legal requirements for compensation in Singapore.
B. You must consider the Indian government's legal requirements for compensation.
C. Compensation for workers in Singapore will likely be the same as for workers in India.
D. Workers in Singapore will have different preferences for compensation and benefits than will Indian
workers.
E. The cost of living is different in Singapore than it is in India, so compensation policy must account for that
difference.

20. When a company hires host-country nationals to staff foreign locations in underdeveloped countries, it must
often
A. offer exercise classes.
B. provide extensive training and development.
C. hire a consultant.
D. seek permission from competitors.
E. cut the benefits package provided to employees.

21. Which of the following is NOT likely to be a part of a compensation package designed for an expatriate?
A. Housing benefits
B. Job location assistance for the spouse
C. A cost-of-living allowance
D. A hardship premium
E. Unlimited travel to and from the home country

22. Wangkyo is an electrical engineer who designs power systems for factories. His employer is sending him on
a foreign assignment for one month, to design a system for a new factory that is being built overseas. Which
skills will be MOST important to Wangkyo in his foreign assignment?
A. Technical skills
B. Language skills
C. Cultural skills
D. Financial skills
E. Leadership skills

23. Disney chose Andre Lacroix to be CEO of Euro Disney, following his success as CEO of Burger King
International. Disney chose an experienced international manager who lived in France, rather than send an
American manager overseas, in part to eliminate the risk of expatriate failure. Expatriate failure occurs when
the
A. expatriate needs extensive training before he or she is able to accept the assignment.
B. cost of sending the manager to the foreign assignment is greater than the benefit gained.
C. expatriate's coworkers report that he or she is not fitting in well.
D. business that is managed by the expatriate loses money.
E. expatriate returns early because of an inability to perform.

24. Repatriation occurs when a(n)

A. company sends a manager to a second foreign assignment.
B. expatriate manager comes home from a foreign assignment.
C. manager likes a foreign assignment so much that he or she remains in the foreign country.
D. manager is sent on a foreign assignment.
E. manager on a foreign assignment is compensated in the local currency.

25. Which of the following is an accurate statement about labor unions outside the United States?
A. In foreign countries, few workers belong to labor unions.
B. Labor unions outside the United States are regulated by U.S. laws.
C. Foreign labor unions are more likely to be involved in political and social issues.
D. Outside the United States, labor contracts are formal legal contracts and employers can be sued in court by
the unions for breaking them.
E. Foreign employers rarely negotiate with unions in their home country.

26. More than ______ the world s workforce outside the United States belongs to labor unions.
A. half
B. a third
C. a quarter
D. two thirds
E. three fourths

27. In ______ , labor contracts are not really legal contracts at all but are merely understandings that can be
broken at any time by either party with no penalty.
A. France
B. England
C. Germany
D. Japan
E. the United States

28. Labor relations in ______ tend to be cordial.

A. France
B. England
C. Japan
D. the United States
E. Germany

29. HCNs are LEAST likely to work in ______ positions.

A. clerical
B. line worker
C. maintenance
D. management
E. office worker

30. Some countries, such as ______, focus compensation on assessing an individuals performance and then
compensating that individual accordingly.
A. Japan
B. India
C. Sweden
D. France
E. the United States

31. Scenario 3.1

Mini-PC is a Houston-based maker of handheld computers. In response to high European demand, Mini-PC
purchased Marstrand Electronics, a handheld manufacturer in Stockholm, Sweden. Mini-PC allowed the
management of Marstrand to continue in their jobs rather than sending U.S. managers to oversee Swedish
operations. Mini-PC decided to purchase Marstrand because virtually all Swedes speak English, value women's
rights, and are predominantly Christian in religious beliefs. Sweden has an extremely stable political system, a
sound economy, a highly educated workforce, and it is a member of the European Union. However, Swedes do
take a different view of work time, in that they expect at least two months of vacation per year. Also, the
Swedish workforce is about 80% unionized, in comparison to Mini-PC's nonunionized workforce. Sweden has a
socialist approach to health benefits, which means higher personal taxes for workers but lower health benefits
costs for employers. When comparing average national scores on Hofstede's dimensions of culture, the United
States and Sweden are about the same in power distance and long-term orientation, but the United States is
higher than Sweden in individualism and uncertainty avoidance and much higher in masculinity.
Refer to Scenario 3.1. Which staffing model is Mini-PC using for its Swedish unit?
A. Geocentric
B. Ethnocentric
C. Polycentric
D. Egocentric
E. Multicentric

32. Scenario 3.1

Mini-PC is a Houston-based maker of handheld computers. In response to high European demand, Mini-PC
purchased Marstrand Electronics, a handheld manufacturer in Stockholm, Sweden. Mini-PC allowed the
management of Marstrand to continue in their jobs rather than sending U.S. managers to oversee Swedish
operations. Mini-PC decided to purchase Marstrand because virtually all Swedes speak English, value women's
rights, and are predominantly Christian in religious beliefs. Sweden has an extremely stable political system, a
sound economy, a highly educated workforce, and it is a member of the European Union. However, Swedes do
take a different view of work time, in that they expect at least two months of vacation per year. Also, the
Swedish workforce is about 80% unionized, in comparison to Mini-PC's nonunionized workforce. Sweden has a
socialist approach to health benefits, which means higher personal taxes for workers but lower health benefits
costs for employers. When comparing average national scores on Hofstede's dimensions of culture, the United
States and Sweden are about the same in power distance and long-term orientation, but the United States is
higher than Sweden in individualism and uncertainty avoidance and much higher in masculinity.
Refer to Scenario 3.1. Which aspect of culture will MOST likely affect Mini-PC's human resource activities at
the corporate level because of differences between its U.S. and Swedish business units?
A. Language
B. Religious differences
C. Gender roles
D. Personal norms
E. Differences in views of child labor

33. Scenario 3.1

Mini-PC is a Houston-based maker of handheld computers. In response to high European demand, Mini-PC
purchased Marstrand Electronics, a handheld manufacturer in Stockholm, Sweden. Mini-PC allowed the
management of Marstrand to continue in their jobs rather than sending U.S. managers to oversee Swedish
operations. Mini-PC decided to purchase Marstrand because virtually all Swedes speak English, value women's
rights, and are predominantly Christian in religious beliefs. Sweden has an extremely stable political system, a
sound economy, a highly educated workforce, and it is a member of the European Union. However, Swedes do
take a different view of work time, in that they expect at least two months of vacation per year. Also, the
Swedish workforce is about 80% unionized, in comparison to Mini-PC's nonunionized workforce. Sweden has a
socialist approach to health benefits, which means higher personal taxes for workers but lower health benefits
costs for employers. When comparing average national scores on Hofstede's dimensions of culture, the United
States and Sweden are about the same in power distance and long-term orientation, but the United States is
higher than Sweden in individualism and uncertainty avoidance and much higher in masculinity.
Refer to Scenario 3.1. On the basis of scores on Hofstede's dimensions of culture, which organization cultural
values will create the most discomfort and resistance among Swedish workers?
A. Swedes will resist Mini-PC's policy of calling everyone, from the CEO to the lowest worker, by his or her
first name.
B. Swedes will place a much greater value on patience and persistence than do Mini-PC's American workers.
C. Swedes will prefer to emphasize individual contributions, as opposed to Mini-PC workers in the United
States, who value team or group contributions.
D. Swedes will be much less competitive, ambitious, and driven than Mini-PC's American workers.
E. Swedes will not be comfortable when given tasks that are too structured, as opposed to American workers,
who prefer lots of structure.

34. Scenario 3.1

Mini-PC is a Houston-based maker of handheld computers. In response to high European demand, Mini-PC
purchased Marstrand Electronics, a handheld manufacturer in Stockholm, Sweden. Mini-PC allowed the
management of Marstrand to continue in their jobs rather than sending U.S. managers to oversee Swedish
operations. Mini-PC decided to purchase Marstrand because virtually all Swedes speak English, value women's
rights, and are predominantly Christian in religious beliefs. Sweden has an extremely stable political system, a
sound economy, a highly educated workforce, and it is a member of the European Union. However, Swedes do
take a different view of work time, in that they expect at least two months of vacation per year. Also, the
Swedish workforce is about 80% unionized, in comparison to Mini-PC's nonunionized workforce. Sweden has a
socialist approach to health benefits, which means higher personal taxes for workers but lower health benefits
costs for employers. When comparing average national scores on Hofstede's dimensions of culture, the United
States and Sweden are about the same in power distance and long-term orientation, but the United States is
higher than Sweden in individualism and uncertainty avoidance and much higher in masculinity.
Refer to Scenario 3.1. Which international strategy is Mini-PC using to expand its international operations?
A. Exporting
B. Licensing
C. Direct investment
D. Joint venture
E. Strategic alliance

35. Scenario 3.1

Mini-PC is a Houston-based maker of handheld computers. In response to high European demand, Mini-PC
purchased Marstrand Electronics, a handheld manufacturer in Stockholm, Sweden. Mini-PC allowed the
management of Marstrand to continue in their jobs rather than sending U.S. managers to oversee Swedish
operations. Mini-PC decided to purchase Marstrand because virtually all Swedes speak English, value women's
rights, and are predominantly Christian in religious beliefs. Sweden has an extremely stable political system, a
sound economy, a highly educated workforce, and it is a member of the European Union. However, Swedes do
take a different view of work time, in that they expect at least two months of vacation per year. Also, the
Swedish workforce is about 80% unionized, in comparison to Mini-PC's nonunionized workforce. Sweden has a
socialist approach to health benefits, which means higher personal taxes for workers but lower health benefits
costs for employers. When comparing average national scores on Hofstede's dimensions of culture, the United
States and Sweden are about the same in power distance and long-term orientation, but the United States is
higher than Sweden in individualism and uncertainty avoidance and much higher in masculinity.
Refer to Scenario 3.1. Which of the domestic human resource issues is most likely affected (i.e., different at
Marstrand than at Mini-PC) by conditions described in the scenario?
A. Local compensation issues
B. Local selection issues
C. Local training issues
D. Local recruiting issues
E. Local development issues

36. The United States and Japan have experienced slowing growth rates in employment in recent years.
True False

37. The interrelatedness of global markets was demonstrated by the recent economic downturn in the United
States that affected many other parts of the world.
True False

38. The ethnocentric staffing model utilizes host-country nationals extensively throughout the company.
True False

39. A joint venture might not involve ownership but still involves cooperation between firms.
True False

40. In a relatively underdeveloped country, training and development needs will be very extensive.
True False

41. Benefit packages are remarkably similar across most countries.

True False

42. Training is instruction directed at enhancing specific job-related skills and abilities and most often focuses
on managers.
True False

43. Most companies follow the advice of experts and complete the repatriation process successfully.
True False

44. During contract negotiations at French operations for Caterpillar, Sony, and 3M, angry labor officials took
senior managers hostage in efforts to win better employment contracts.
True False

45. Labor relations are not heavily regulated by law.

True False

46. The following chart reports the average national scores of Hofstede's five dimensions of culture for three
different countries. Using the relative differences on these dimensions as the basis of your answer, briefly
describe in words each country's national culture.

Country
China
India
Japan

Power
Distance
80
77
54

Individualism

Masculinity

15
48
46

55
56
95

Uncertainty
Avoidance
40
40
92

Long-Term
Orientation
114
61
80

47. How may an organization choose to compete in the international environment, and how does each strategy
affect its human resource function?

48. When a multinational firm hires local workers, what types of training are needed?

49. How do businesses compensate expatriates?

50. How does the area of labor relations affect international human resource management?

Chapter 3--The Global Environment Key

1. Which industrialized nation emerged as the only intact major power after World War II?
A. The United States
B. Japan
C. Germany
D. Canada
E. Africa

2. All EXCEPT which of the following countries are considered the leading industrial powers in today's global
economy?
A. The United States
B. Japan
C. Germany
D. India
E. All of these are considered leading industrial powers.

3. Which of the following trends is NOT true of developed nations today (such as the United States, Japan, the
United Kingdom, and so on)?
A. Population growth is slowing.
B. International trade is expanding.
C. The labor force is growing quickly.
D. Competition from foreign countries is increasing.
E. Countries are becoming increasingly interdependent.

4. Which country is NOT experiencing rapid population growth?

A. China
B. Canada
C. India
D. Indonesia
E. Mexico

5. Under a geocentric staffing model,

A. host-country nationals are used heavily because they know the local markets.
B. the organization will have a skeleton human resource department at the host-country location, while the
home-country human resource department retains all control.
C. the organization seeks to hire the best person available for a position regardless of where the individual
comes from.
D. expatriate home-country nationals are hired to fill higher-level foreign positions.
E. the home-office perspective takes precedence over local issues.

6. Which international staffing model involves staffing high-level foreign jobs with parent-country nationals?
A. Globalcentric
B. Polycentric
C. Geocentric
D. Egocentric
E. None of these

7. No outplacement firms exist in several Middle Eastern countries because the religion of Islam specifies that
individuals should not benefit financially from other people's misfortunes. This cultural factor pertains to what
type of difference?
A. Language
B. Business practices
C. Children's rights
D. Roles
E. Personal norms

8. Dietrich prefers structured circumstances instead of situations that are relatively ambiguous. Which cultural
dimension does he exhibit?
A. Individualism
B. Collectivism
C. Masculinity
D. Time orientation
E. Uncertainty Avoidance

9. What aspect of international business do NAFTA and the EU represent?

A. Tariff systems
B. Economic communities
C. Trade controls
D. Export regulations
E. Quota guidelines

10. John prefers to work by himself on projects and avoids group work that requires him to monitor the actions
of others. He would score highly on the ____ dimension of Hofstede's model of culture.
A. power distance
B. individualism
C. masculinity
D. uncertainty avoidance
E. time orientation

11. Siemens has a complex matrix organization structure. Managers who have been with the company for years
and built relationships are the most effective. Someone with a cultural dimension of ______ is more likely to
experience success there.
A. femininity
B. uncertainty avoidance
C. time orientation
D. power distance
E. collectivism

12. What is the term used when a company lets a foreign firm make and/or distribute its products in a local
market?
A. Exporting
B. Licensing
C. Direct investment
D. Joint venture
E. Strategic alliance

13. Under which two approaches to international business will the human resource function be LEAST
affected?
A. Licensing and joint ventures
B. Direct investment and strategic alliances
C. Exporting and licensing
D. Joint ventures and strategic alliances
E. Exporting and direct investment

14. What is an advantage of direct investment in another country?

A. Less risk is involved.
B. It is not expensive.
C. There is more profit potential.
D. The facility is less integrated in the foreign market.
E. Synergy between business partners is achieved.

15. Under which international strategy will several companies agree to cooperate for mutual benefit?
A. Exporting
B. Importing
C. Direct investment
D. Multinational organization
E. Strategic alliance

16. Local issues that must be dealt with by firms conducting business in foreign markets include all of the
following EXCEPT
A. recruiting.
B. compensation.
C. selection.
D. human resource technology.
E. training.

17. Locating a facility in a relatively underdeveloped area will impact all of the following human resource
activities EXCEPT
A. training needs.
B. recruitment activities.
C. selection requirements.
D. development issues.
E. production design.

18. Celebrity Cruises is based in Florida, but it hires workers from various countries to communicate with and
serve guests from around the world. Which of the following is an accurate statement?
A. Celebrity will need to provide the same training to all of its foreign workers.
B. Celebrity will need to provide the same training to all of its workers.
C. Celebrity will need to tailor training to best develop workers from various countries.
D. Celebrity will not need to train its workers.
E. Celebrity will only need to train workers who have contact with customers; other workers need no training.

19. Prakash is a human resource manager for an Indian company that is building a manufacturing plant in
Singapore. The plant will be staffed with Indian managers and local workers. Which advice would NOT be
appropriate for Prakash?
A. You must understand legal requirements for compensation in Singapore.
B. You must consider the Indian government's legal requirements for compensation.
C. Compensation for workers in Singapore will likely be the same as for workers in India.
D. Workers in Singapore will have different preferences for compensation and benefits than will Indian
workers.
E. The cost of living is different in Singapore than it is in India, so compensation policy must account for that
difference.

20. When a company hires host-country nationals to staff foreign locations in underdeveloped countries, it must
often
A. offer exercise classes.
B. provide extensive training and development.
C. hire a consultant.
D. seek permission from competitors.
E. cut the benefits package provided to employees.

21. Which of the following is NOT likely to be a part of a compensation package designed for an expatriate?
A. Housing benefits
B. Job location assistance for the spouse
C. A cost-of-living allowance
D. A hardship premium
E. Unlimited travel to and from the home country

22. Wangkyo is an electrical engineer who designs power systems for factories. His employer is sending him on
a foreign assignment for one month, to design a system for a new factory that is being built overseas. Which
skills will be MOST important to Wangkyo in his foreign assignment?
A. Technical skills
B. Language skills
C. Cultural skills
D. Financial skills
E. Leadership skills

23. Disney chose Andre Lacroix to be CEO of Euro Disney, following his success as CEO of Burger King
International. Disney chose an experienced international manager who lived in France, rather than send an
American manager overseas, in part to eliminate the risk of expatriate failure. Expatriate failure occurs when
the
A. expatriate needs extensive training before he or she is able to accept the assignment.
B. cost of sending the manager to the foreign assignment is greater than the benefit gained.
C. expatriate's coworkers report that he or she is not fitting in well.
D. business that is managed by the expatriate loses money.
E. expatriate returns early because of an inability to perform.

24. Repatriation occurs when a(n)

A. company sends a manager to a second foreign assignment.
B. expatriate manager comes home from a foreign assignment.
C. manager likes a foreign assignment so much that he or she remains in the foreign country.
D. manager is sent on a foreign assignment.
E. manager on a foreign assignment is compensated in the local currency.

25. Which of the following is an accurate statement about labor unions outside the United States?
A. In foreign countries, few workers belong to labor unions.
B. Labor unions outside the United States are regulated by U.S. laws.
C. Foreign labor unions are more likely to be involved in political and social issues.
D. Outside the United States, labor contracts are formal legal contracts and employers can be sued in court by
the unions for breaking them.
E. Foreign employers rarely negotiate with unions in their home country.

26. More than ______ the world s workforce outside the United States belongs to labor unions.
A. half
B. a third
C. a quarter
D. two thirds
E. three fourths

27. In ______ , labor contracts are not really legal contracts at all but are merely understandings that can be
broken at any time by either party with no penalty.
A. France
B. England
C. Germany
D. Japan
E. the United States

28. Labor relations in ______ tend to be cordial.

A. France
B. England
C. Japan
D. the United States
E. Germany

29. HCNs are LEAST likely to work in ______ positions.

A. clerical
B. line worker
C. maintenance
D. management
E. office worker

30. Some countries, such as ______, focus compensation on assessing an individuals performance and then
compensating that individual accordingly.
A. Japan
B. India
C. Sweden
D. France
E. the United States

31. Scenario 3.1

Mini-PC is a Houston-based maker of handheld computers. In response to high European demand, Mini-PC
purchased Marstrand Electronics, a handheld manufacturer in Stockholm, Sweden. Mini-PC allowed the
management of Marstrand to continue in their jobs rather than sending U.S. managers to oversee Swedish
operations. Mini-PC decided to purchase Marstrand because virtually all Swedes speak English, value women's
rights, and are predominantly Christian in religious beliefs. Sweden has an extremely stable political system, a
sound economy, a highly educated workforce, and it is a member of the European Union. However, Swedes do
take a different view of work time, in that they expect at least two months of vacation per year. Also, the
Swedish workforce is about 80% unionized, in comparison to Mini-PC's nonunionized workforce. Sweden has a
socialist approach to health benefits, which means higher personal taxes for workers but lower health benefits
costs for employers. When comparing average national scores on Hofstede's dimensions of culture, the United
States and Sweden are about the same in power distance and long-term orientation, but the United States is
higher than Sweden in individualism and uncertainty avoidance and much higher in masculinity.
Refer to Scenario 3.1. Which staffing model is Mini-PC using for its Swedish unit?
A. Geocentric
B. Ethnocentric
C. Polycentric
D. Egocentric
E. Multicentric

32. Scenario 3.1

Mini-PC is a Houston-based maker of handheld computers. In response to high European demand, Mini-PC
purchased Marstrand Electronics, a handheld manufacturer in Stockholm, Sweden. Mini-PC allowed the
management of Marstrand to continue in their jobs rather than sending U.S. managers to oversee Swedish
operations. Mini-PC decided to purchase Marstrand because virtually all Swedes speak English, value women's
rights, and are predominantly Christian in religious beliefs. Sweden has an extremely stable political system, a
sound economy, a highly educated workforce, and it is a member of the European Union. However, Swedes do
take a different view of work time, in that they expect at least two months of vacation per year. Also, the
Swedish workforce is about 80% unionized, in comparison to Mini-PC's nonunionized workforce. Sweden has a
socialist approach to health benefits, which means higher personal taxes for workers but lower health benefits
costs for employers. When comparing average national scores on Hofstede's dimensions of culture, the United
States and Sweden are about the same in power distance and long-term orientation, but the United States is
higher than Sweden in individualism and uncertainty avoidance and much higher in masculinity.
Refer to Scenario 3.1. Which aspect of culture will MOST likely affect Mini-PC's human resource activities at
the corporate level because of differences between its U.S. and Swedish business units?
A. Language
B. Religious differences
C. Gender roles
D. Personal norms
E. Differences in views of child labor

33. Scenario 3.1

Mini-PC is a Houston-based maker of handheld computers. In response to high European demand, Mini-PC
purchased Marstrand Electronics, a handheld manufacturer in Stockholm, Sweden. Mini-PC allowed the
management of Marstrand to continue in their jobs rather than sending U.S. managers to oversee Swedish
operations. Mini-PC decided to purchase Marstrand because virtually all Swedes speak English, value women's
rights, and are predominantly Christian in religious beliefs. Sweden has an extremely stable political system, a
sound economy, a highly educated workforce, and it is a member of the European Union. However, Swedes do
take a different view of work time, in that they expect at least two months of vacation per year. Also, the
Swedish workforce is about 80% unionized, in comparison to Mini-PC's nonunionized workforce. Sweden has a
socialist approach to health benefits, which means higher personal taxes for workers but lower health benefits
costs for employers. When comparing average national scores on Hofstede's dimensions of culture, the United
States and Sweden are about the same in power distance and long-term orientation, but the United States is
higher than Sweden in individualism and uncertainty avoidance and much higher in masculinity.
Refer to Scenario 3.1. On the basis of scores on Hofstede's dimensions of culture, which organization cultural
values will create the most discomfort and resistance among Swedish workers?
A. Swedes will resist Mini-PC's policy of calling everyone, from the CEO to the lowest worker, by his or her
first name.
B. Swedes will place a much greater value on patience and persistence than do Mini-PC's American workers.
C. Swedes will prefer to emphasize individual contributions, as opposed to Mini-PC workers in the United
States, who value team or group contributions.
D. Swedes will be much less competitive, ambitious, and driven than Mini-PC's American workers.
E. Swedes will not be comfortable when given tasks that are too structured, as opposed to American workers,
who prefer lots of structure.

34. Scenario 3.1

Mini-PC is a Houston-based maker of handheld computers. In response to high European demand, Mini-PC
purchased Marstrand Electronics, a handheld manufacturer in Stockholm, Sweden. Mini-PC allowed the
management of Marstrand to continue in their jobs rather than sending U.S. managers to oversee Swedish
operations. Mini-PC decided to purchase Marstrand because virtually all Swedes speak English, value women's
rights, and are predominantly Christian in religious beliefs. Sweden has an extremely stable political system, a
sound economy, a highly educated workforce, and it is a member of the European Union. However, Swedes do
take a different view of work time, in that they expect at least two months of vacation per year. Also, the
Swedish workforce is about 80% unionized, in comparison to Mini-PC's nonunionized workforce. Sweden has a
socialist approach to health benefits, which means higher personal taxes for workers but lower health benefits
costs for employers. When comparing average national scores on Hofstede's dimensions of culture, the United
States and Sweden are about the same in power distance and long-term orientation, but the United States is
higher than Sweden in individualism and uncertainty avoidance and much higher in masculinity.
Refer to Scenario 3.1. Which international strategy is Mini-PC using to expand its international operations?
A. Exporting
B. Licensing
C. Direct investment
D. Joint venture
E. Strategic alliance

35. Scenario 3.1

Mini-PC is a Houston-based maker of handheld computers. In response to high European demand, Mini-PC
purchased Marstrand Electronics, a handheld manufacturer in Stockholm, Sweden. Mini-PC allowed the
management of Marstrand to continue in their jobs rather than sending U.S. managers to oversee Swedish
operations. Mini-PC decided to purchase Marstrand because virtually all Swedes speak English, value women's
rights, and are predominantly Christian in religious beliefs. Sweden has an extremely stable political system, a
sound economy, a highly educated workforce, and it is a member of the European Union. However, Swedes do
take a different view of work time, in that they expect at least two months of vacation per year. Also, the
Swedish workforce is about 80% unionized, in comparison to Mini-PC's nonunionized workforce. Sweden has a
socialist approach to health benefits, which means higher personal taxes for workers but lower health benefits
costs for employers. When comparing average national scores on Hofstede's dimensions of culture, the United
States and Sweden are about the same in power distance and long-term orientation, but the United States is
higher than Sweden in individualism and uncertainty avoidance and much higher in masculinity.
Refer to Scenario 3.1. Which of the domestic human resource issues is most likely affected (i.e., different at
Marstrand than at Mini-PC) by conditions described in the scenario?
A. Local compensation issues
B. Local selection issues
C. Local training issues
D. Local recruiting issues
E. Local development issues

36. The United States and Japan have experienced slowing growth rates in employment in recent years.
TRUE

37. The interrelatedness of global markets was demonstrated by the recent economic downturn in the United
States that affected many other parts of the world.
TRUE

38. The ethnocentric staffing model utilizes host-country nationals extensively throughout the company.
FALSE

39. A joint venture might not involve ownership but still involves cooperation between firms.
FALSE

40. In a relatively underdeveloped country, training and development needs will be very extensive.
TRUE

41. Benefit packages are remarkably similar across most countries.

FALSE

42. Training is instruction directed at enhancing specific job-related skills and abilities and most often focuses
on managers.
FALSE

43. Most companies follow the advice of experts and complete the repatriation process successfully.
FALSE

44. During contract negotiations at French operations for Caterpillar, Sony, and 3M, angry labor officials took
senior managers hostage in efforts to win better employment contracts.
TRUE

45. Labor relations are not heavily regulated by law.

FALSE

46. The following chart reports the average national scores of Hofstede's five dimensions of culture for three
different countries. Using the relative differences on these dimensions as the basis of your answer, briefly
describe in words each country's national culture.

Country
China
India
Japan

Power
Distance
80
77
54

Individualism

Masculinity

15
48
46

55
56
95

Uncertainty
Avoidance
40
40
92

Long-Term
Orientation
114
61
80

China's culture shows a high respect for authority and status and a very high emphasis on collectivism, in which
groups are valued over individuals. China has moderate levels of assertion and competitiveness and a moderate
preference for structured situations over unstructured ones. China's most extreme cultural value is the very, very
high emphasis placed on long-term goals over short-term goals. China's score on this variable is the highest of
any nation in the world. A long-term orientation would value characteristics such as patience, persistence,
saving, and planning for the future.
India's culture, in contrast to China's, has many more values that are moderate. India has a high value for status
and authority, but values of individualism/collectivism, masculinity/femininity, uncertainty avoidance, and longterm orientation are all near 50, which would be a middle of the road score.
Japan also has moderate scores on power distance and individualism/collectivism, showing less respect for
authority than was shown in China or India and only a slight trend in favor collectivism over individualism.
However, Japan's scores on masculinity, uncertainty avoidance, and long-term orientation are all quite high,
demonstrating a focus on ambition and assertiveness, a high preference for structured tasks, and an emphasis on
long-term, not short-term, goals.

47. How may an organization choose to compete in the international environment, and how does each strategy
affect its human resource function?
A company may choose a strategy of exporting, in which a product is made in the domestic marketplace and
then sold in another country. The human resource function faces no meaningful differences in responsibilities
from a solely domestic business.
Under a licensing strategy, a company grants its permission to another company in a foreign country to
manufacture and/or market its products in the local market. The licensing firm typically pays a licensing fee to
the original firm. The human resource function faces no meaningful differences in responsibilities.
In a direct investment strategy, a firm headquartered in one country builds or purchases operating facilities or
subsidiaries in a foreign country. The human resource function changes substantively from that of a domestic
firm. Employees of the firm will be working in foreign locations, and the corporate human resource function
will need to extend and expand its scope and operations to manage employees across national boundaries, based
on the staffing strategy (ethnocentric, polycentric, geocentric) being used.
Joint ventures and strategic alliances involve two or more firms cooperating in the ownership and/or
management of an operation, often on an equity basis. Human resource managers face a complex set of issues
and challenges. The corporate human resource staff of each strategic partner will need to link and coordinate
with its counterparts. If the new venture is being operated within the context of one of the existing partners'
organization, disparate relationships among the human resource staff members will complicate this coordination
further.

48. When a multinational firm hires local workers, what types of training are needed?
The types of training that are needed to train local workers depend on the location of the facility. In many
developed nations, the labor force is highly educated and knowledgeable about business practices, so only a
small amount of firm-specific training may be needed. In other areas, the labor force may be relatively educated
but business practices may vary considerably, so more training may be needed to provide both firm-specific
skills and more generalized skills in areas such as team decision making or customer service. In some
developing countries, local workers may lack business knowledge and they may even lack basic skills, such as
literacy, math skills, and so on. Training in these regions is likely to be very comprehensive.

49. How do businesses compensate expatriates?

To remain competitive, an international business must provide prevailing compensation packages for its
managers in a given market. Packages include salary and nonsalary items and are determined by labor market
forces (i.e., supply and demand of managerial talent), professional licensing requirements, standard of living,
occupational status, and government regulations. Organizations may need to provide differential compensation
to make up for differences in currency valuation, standards of living, and life-style norms. This may include a
cost-of-living allowance, a hardship premium (for less desirable assignments), and/or a tax equalization system.
Benefits may be adjusted to include housing, education, medical treatment, travel to the home country, club
memberships, and job location assistance for spouses.

50. How does the area of labor relations affect international human resource management?
Labor relations is the process of dealing with employees who are organized into labor units. Different situations
exist in countries throughout the world. Many countries have labor parties that seek to achieve the political
goals of unions in those countries. In many countries, labor unions are much more concerned with social issues
than they are in the United States, so their political activism may extend beyond wages and conditions of
employment. In many countries, union membership is quite large and continues to grow. More than half the
world's workforce outside the United States belongs to labor unions. Different norms or expectations about the
relationships between unions and management exist in different countries. Countries may differ in the definition
of labor contracts, use of labor activities such as temporary work stoppage, the level of cordiality in
negotiations, and dispute resolution procedures. International human resource managers need to understand
such differences and may need to draw heavily on local expertise to help them address labor relations issues in
an appropriate, effective, and legal manner.