Culture, Management Style, and Business Systems: True / False Questions

Chapter 05
Culture, Management Style, and Business Systems

True / False Questions

1. Adaptation requires business executives to forsake their ways and change to local
customs.

True False

2. We are less likely to evaluate a person’s behavior in terms of what is familiar to us
because we use our self-reference criterion (SRC).

True False

3. Cultural electives are business customs in which an outsider must not participate.

True False

4. Cultural imperatives are business customs that are generally similar across cultures.

True False

5. The majority of business customs fit into the cultural elective category.

True False

6. For most U.S. managers, judgment and intuition are the only basis for making
decisions.

True False

7. The idea of wide sharing in decision making is consistent with the views that one
controls one’s own destiny.

True False

8. The notion that competition is crucial for efficiency, improvement, and regeneration is
fundamental to Western management practices.

True False

9. High-Power Distance Index countries are more egalitarian than low-Power Distance
Index countries.

True False

10. The three typical decision-making patterns are top-level management decisions,
decentralized decisions, and committee or group decisions.

True False

5-1
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11. As businesses grow and professional management develops, there is a shift toward
centralized management decision making.

True False

12. In the committee decision setup, every committee member must be convinced of the
merits of the proposition or product in question.

True False

13. Workers in countries higher in individualism show more commitment than workers in
countries with lower individualism and higher power distance.

True False

14. High-context cultures place great importance on the verbal aspects of
communication.

True False

15. Businesspeople in low-context cultures use email more often than those in high-
context cultures.

True False

16. Most high-context cultures operate on monochronic time.

True False

17. Polychronic time is characterized by “a great involvement with people.”

True False

18. The treatment local women receive in their own cultures is a clear indicator of how a
foreign businesswoman will be treated.

True False

19. The strength of a firm's backing is the key to success for both women and men in
international business.

True False

20. In the United States, bribery is increasingly being considered a way of life because it
is necessary for business.

True False

21. The distinction between bribery and extortion depends on whether the activity
resulted from an offer or from a demand for payment.

True False

5-2
22. Subornation payments accompany requests for a person to do a job more rapidly or
more efficiently.

True False

23. Lubrication is a request for officials to turn their heads, to not do their jobs, or to
break the law.

True False

24. Utilitarian ethics is the ethical principle that focuses on the optimization of the
“common good.”

True False

25. In the less individualistic cultures, labor and management are generally hostile.

True False

26. A distinguishing characteristic of the type of capitalism common in Chinese culture is
the emphasis on guanxi as the coordinating principle among firms.

True False

27. Chinese cultures are high on Power Distance Index and low on Individualism/Collective
Index.

True False

28. High-context cultures score high on power distance and low on individualism.

True False

29. The most managerially useful aspect of the synthesis of cultural differences is that it
allows us to make predictions about unfamiliar cultures.

True False

30. It is not possible to obtain measures of linguistic distance for every country and every
person.

True False

Multiple Choice Questions

5-3
31. Which of the following is a criterion for adaptation when dealing with individuals,
firms, or authorities in foreign countries?

A. Profit
motive
B. Cultural
apathy
C. Hypersensitiv
ity
D. Flexibili
ty
E. Time-
consciousness

32. Which of the following is true of adaptation in international marketing?

A. Willingness to adapt is a crucial attitude in international

marketing.
B. Adaptation requires business executives to forsake their ways and change to
local customs.
C. Mere tolerance of alien cultures is sufficient in international
marketing.
D. Open tolerance is considered to be an unnecessary concession to
foreign cultures.
E. Empathy for foreign cultures may lead to cultural
discord.

33. Business customs can be grouped into:

A. rigid, flexible, and

negotiables.
B. internals, externals, and consensual
customs.
C. imperatives, electives, and
exclusives.
D. national, foreign, and
international.
E. unilateral, bilateral, and
multilateral.

5-4
34. _____ are the business customs and expectations that must be met and conformed to
or avoided if relationships are to be successful.

A. Cultural
exclusives
B. Business
electives
C. Global
protocols
D. Business
axioms
E. Cultural
imperatives

35. Business customs that must be recognized and accommodated are called _____.

A. imperativ
es
B. electiv
es
C. exclusiv
es
D. obligatio
ns
E. constrain
ts

36. Business customs to which adaptation is helpful but not necessary are called _____.

A. imperativ
es
B. electiv
es
C. exclusiv
es
D. non-
traditional
E. standardiz
ed

5-5
37. Business customs in which an outsider must not participate are called _____.

A. imperativ
es
B. electiv
es
C. exclusiv
es
D. absolut
es
E. statut
es

38. Which of the following would most likely be characterized as being an imperative
business custom in many cultures?

A. Establishing
friendships.
B. Speaking the local
language.
C. Understanding the native
religions.
D. Drinking the local
drinks.
E. Having knowledge of the local
sport.

39. Simon Peters, a senior manager at Celise Export Logistics, goes for a meeting in
France to negotiate a deal with the company’s French partners. He dresses casually in
a t-shirt and jeans. His French counterparts call off the meeting and accuse him of
taking a casual attitude toward negotiations. In the context of this scenario, dressing
formally during business meetings is probably a cultural _____ for the French.

A. imperati
ve
B. electiv
e
C. exclusiv
e
D. oddit
y
E. benchma
rk

5-6
40. Betty Roberts became an embarrassment to her company when she joked about the
ruling monarchy in England in front of a group of visiting English businesspeople. She
should have known that political ridicule by a foreigner is rarely accepted. Ms. Roberts
has violated what is known as a cultural _____.

A. imperati
ve
B. electiv
e
C. exclusiv
e
D. landma
rk
E. standar
d

41. Which of the following could be the least acceptable behavior in a business setting,
especially in a cross-cultural scenario?

A. Correcting someone in
public.
B. Staying away from greeting another man with a kiss (a custom in some
countries).
C. Refusing to eat foods that disagree with your
palate.
D. Refusing to drink alcoholic
beverages.
E. Opting not to dance along with the
crowd.

42. Which of the following views is consistent with normative U.S. cultural concepts?

A. Collective good outweighs the

individual gain.
B. The decision-making power lies in the hands of the highest
authority.
C. Personal relationships are more important in daily life than work and
the company.
D. Independent enterprise is an instrument for social
action.
E. A broader set of stakeholders is crucial to the
company.

5-7
43. Which philosophy of U.S. management recognizes that people influence the future to
a large extent and that they control their own fates?

A. Independent enterprise as the instrument of

social action.
B. Wide sharing in decision
making.
C. “Master of destiny”
viewpoint.
D. Never-ending quest for
improvement.
E. Competition produces
efficiency.

44. There is a very strong belief in the United States that business decisions must be
supported and based on accurate and relevant information. Which of the following
best describes this approach?

A. “Master of destiny”
viewpoint
B. Independent enterprise as the instrument of
social action
C. Objective
analysis
D. Wide sharing in decision
making
E. Never-ending quest for
improvement

45. Which of the following is consistent with the American view of the independent
enterprise?

A. A corporation should fall under the control of the state

government.
B. A corporation is an entity that has rules and continuity of
existence.
C. The largest proportion of a corporation’s profits must go to
social causes.
D. A company should be equally owned by all employees and
stakeholders.
E. Corporations do not take precedence over family and social
relationships.

5-8
46. The recognition of U.S. corporations as entities that have rules and continuity of
existence and are separate, vital social institutions can result in:

A. feelings of obligation among employees to serve the

company.
B. scientific decision making by employees and
managers.
C. superstitious beliefs playing a role in decision
making.
D. decision making being limited to upper
management.
E. a collectivist identity among
employees.

47. Adam Smith in his Wealth of Nations stated, “By pursuing his own interest he
frequently promotes that of the society more effectually than when he really intended
to promote it.” What behavior does this notion attempt to justify?

A. Collectivis
m
B. Loyalt
y
C. Gree
d
D. Competitivene
ss
E. Cooperati
on

48. The notion that _____ is crucial for efficiency, improvement, and regeneration is

A. gree
d
B. collectivis
m
C. centralizati
on
D. competiti
on
E. hierarc
hy

5-9
49. In _____ decision making, participation by middle management tends to be
deemphasized.

A. democrat
ic
B. decentraliz
ed
C. decentralized
committee
D. non-
hierarchical
E. top-level
management

50. As businesses grow and professional management develops, there is a shift toward:

A. centralized group decision

making.
B. decentralized management decision
making.
C. centralized decision
making.
D. top-level management decision
making.
E. experimental decision
making.

51. A characteristic of committee decision making is that it is:

A. found in small
businesses.
B. done to please important family
members.
C. based on rank and
hierarchy.
D. rarely employed in Asian
countries.
E. by group or
consensus.

5-10
52. Which of the following forms of business decision making is predominant in most
Asian countries?

A. Independe
nt
B. Contractu
al
C. Democrat
ic
D. Grou
p
E. Dictatori
al

53. In _____ decision making, title or position generally takes precedence over the
individual holding the job.

A. committ
ee
B. decentraliz
ed
C. top-level
management
D. consensu
s
E. dictatori
al

54. Companies in _____ countries have a strong paternalistic orientation, and assume that
individuals will work for one company for the majority of their lives.

A. more
hierarchical
B. more
egalitarian
C. high Power Distance
Index
D. low Uncertainty Avoidance
Index
E. low in
individualism

5-11
55. In the context of management objectives and aspirations, which of the following is
true of an employee’s personal life?

A. Max Weber discovered that some cultures emphasized profit over

personal life.
B. The Japanese work ethic derives from the belief of
feng shui.
C. Ancient Greek thought considered work to be a desirable factor in
one’s life.
D. To the Japanese, personal life is
company life.
E. McClelland opined that the standard of living enjoyed in the United States
originated from the hard-working Protestant ethic.

56. Research has shown that commitment of workers to their companies tended to be
higher in countries:

A. higher in individualism and lower in power

distance.
B. higher in collectivism and lower in
individualism.
C. lower in individualism and higher in power
distance.
D. higher in power distance and higher in
individualism.
E. higher in collectivism and higher in power
distance.

57. According to Max Weber, at least part of the standard of living in the United States
today can be attributed to the:

A. hard-working Protestant
ethic.
B. artificially low price of
gasoline.
C. almost complete penetration of the
Internet.
D. status equalization by the business
class.
E. slave-labor that formed the basis for early
industry.

5-12
58. Which of the following aspects of communication is more important in a low-context
culture?

A. Explicit
communication
B. Nonverbal
communication
C. Contextual
communication
D. Face-to-face
communication
E. Implicit
communication

59. According to the high-context/low-context continuum identified by Edward T. Hall,
communication in a low-context culture depends on:

A. the
context.
B. who says
it.
C. when it is
said.
D. how it is
said.
E. the verbal
expression.

60. Fredrick Keeble, an American manager, took his Swiss client out for a traditional
American dinner. The client did not seem to enjoy the food and left most of it
untouched. After dinner, he asked his client if he had enjoyed the dinner. Which of the
following responses would indicate that the client comes from a low-context culture?

A. No, I did not like the

food.
B. Yes, but it was a little too
oily.
C. No, I thought the food was
good.
D. Yes, it was lovely,
thanks.
E. Yes, unfortunately I was not very
hungry.

5-13
61. Which of the following is the best means of solving the problem of language on the
Internet?

A. Using minimal language in websites and using graphics and diagrams to convey
messages.
B. Using language translation software to translate communication in all
languages.
C. Having country-specific websites so that everyone can communicate in their
own language.
D. Using foreign language blocking software to screen international
communications.
E. Training employees to communicate in all languages used by foreign
customers.

62. France is higher on Hofstede’s Power Distance Index (PDI) than the United States and
formality still reigns in France. Which of the following American business practices
would be most unacceptable to the French?

A. Using threats during business

meetings.
B. Interacting with members lower in
rank.
C. Showing impatience at business
negotiations.
D. Using first names in business
encounters.
E. Conducting business over dinner or
lunch.

63. _____ is probably the most common mistake of North Americans attempting to trade in
the Middle East.

A. Drinkin
g
B. Informali
ty
C. Impatien
ce
D. Excessive
negotiation
E. Casual
dressing

5-14
64. Western cultures like most North Americans, Swiss, Germans, and Scandinavians tend
to concentrate on one thing at a time and are typified by _____ time.

A. polychron
ic
B. bimod
al
C. dua
l
D. monochron
ic
E. sequenc
e

65. _____ is more dominant in high-context cultures, where the completion of a human
transaction is emphasized more than holding to schedules.

A. Polychronic
time
B. Bimodal
time
C. Dual
time
D. Monochronic
time
E. Sequence
time

66. Kan is a customer relations manager with a leading multinational firm. He has
managed various operations and deals with numerous domestic and international
clients everyday. Despite his hectic schedule, Kan never cuts a meeting short with
anyone and frequently postpones subsequent meetings in order to devote ample time
to each of his clients. Which of the following countries is he most probably from?

A. Japa
n
B. Switzerla
nd
C. The United
States
D. German
y
E. Franc
e

5-15
67. People in Brazil describe themselves as late arrivers, allow greater flexibility in
defining early and late, are less concerned about being late, and are more likely to
blame external factors for their lateness. Which system of time do the Brazilian
people most likely operate on?

A. Polychronic
time
B. Bimodal
time
C. Dual
time
D. Monochronic
time
E. Sequence
time

68. When compared to people operating on P-time, people operating on M-time:

A. follow looser time

schedules.
B. are more deeply involved with
individuals.
C. have a wait-and-see-what develops
attitude.
D. are more likely to blame external factors for their
lateness.
E. tend to concentrate on one thing at
a time.

69. A firm whose marketing orientation is based on the belief that consumers and
businesses alike will not buy enough without prodding is _____ oriented.

A. distributi
on
B. proces
s
C. producti
on
D. produ
ct
E. sellin
g

5-16
70. Which of the following is true of the effect of differences in culture in business
negotiations?

A. The basic elements of business negotiations differ from country

to country.
B. The risk of misunderstanding increases when negotiating with someone from a
different culture.
C. The possibility of misinterpretation is decreased when one uses one’s self-
reference criterion.
D. A standard rule in negotiating is to know your
counterpart first.
E. The negotiator’s cultural background need not have a bearing on the
business talks.

71. Which of the following is true of P-time and M-time?

A. The American desire to get down to business is a manifestation of a P-

time culture.
B. The M-time system gives rise to looser time
schedules.
C. M-time is characterized by the simultaneous occurrence of
many things.
D. As global markets expand, more businesspeople from P-time cultures are
adapting to M-time.
E. Interruptions are routine for M-time
businesspeople.

72. Which of the following best explains the low percentage of women chosen for
international assignments in the United States?

A. The traditional role of women as homemakers and caregivers does not allow for
international assignments.
B. Women managers from the United States have a poorer track record when
compared to their male counterparts.
C. Prejudice faced by American women executives in foreign, male-dominated
societies is exaggerated.
D. There is a wide spread belief that roles of women in male-dominated societies
precludes women from being successful in these societies.
E. Expenses involved in sending a women executive abroad are far higher than the
expenses in sending a man abroad.

5-17
73. In the context of business ethics, which of the following factors kept the American
economy afloat at the turn of the century?

A. Missionaries and religious

movements
B. Cultural
homogenization
C. Rampant
consumerism
D. Intellectual property
laws
E. Currency
speculators

74. In the context of business ethics, many people in sub-Saharan Africa view Western
_____ as a kind of exploitation that prevents treatment of AIDS for millions.

A. missionaries and religious

movements
B. individualis
m
C. R-rated American
movies
D. intellectual property
laws
E. currency
speculators

75. Which organization conducts an international survey of businesspeople, political
analysts, and the general public on corruption and compiles the Corruption Perception
Index (CPI)?

A. Organization of American States

(OAS).
B. United Nations Convention against Corruption
(UNCAC).
C. Organization for Economic Cooperation and Development
(OECD).
D. Transparency International
(TI).
E. World Trade Organization
(WTO).

5-18
76. Which of the following is true of the findings of Transparency International’s
Corruption Perception Index?

A. Lower levels of bribery have been found in nations with a

communist past.
B. Higher levels of bribery have been found in low-power
distance nations.
C. Higher levels of bribery have been found in low-income
nations.
D. Lower levels of bribery have been found in collectivistic
cultures.
E. Lower levels of bribery have been found in low-income
nations.

77. Which of the following is true of the business community’s view about payoffs?

A. The decision to pay a bribe is ethical in the

business world.
B. During the 1970s, the United States had strict laws against paying bribes in
foreign countries.
C. The Securities and Exchange Commissions requires all types of corporations to
report their expenditures.
D. Payoffs are restricted to the multinational companies headquartered in the
United States.
E. Many global competitors perceive payoffs as a necessary means to accomplish
business goals.

78. Academic studies of the causes and consequences of bribery, conducted by
Transparency International (TI), indicate corruption is greater in:

A. high income
nations.
B. democratic rather than communist
countries.
C. countries with high
individualism.
D. countries with low Power Distance
Index.
E. collectivistic
nations.

5-19
79. Which aspect of Japanese culture, predicted by many to favor bribery, makes Japan's
success in reducing corruption more remarkable?

A. Relationship-
orientation
B. Mechanistic
inclination
C. Patriarchal
nature
D. Ritualistic
nature
E. Consumeris
m

80. Which of the following countries is more likely to exhibit higher levels of bribery?

A. Individualistic
cultures.
B. Countries with a strong dependence on
international trade.
C. Nations with a communist
past.
D. High-income
nations.
E. Countries with low-power
distance.

81. _____ occurs when payments are extracted under duress by someone in authority
from a person seeking only what he or she is lawfully entitled to.

A. Extortio
n
B. Subornati
on
C. Lubricati
on
D. Larcen
y
E. Briber
y

5-20
82. _____ involves a relatively small sum of cash, a gift, or a service that is intended to
facilitate or expedite the normal, lawful performance of a duty by an official.

A. Extortio
n
B. Subornati
on
C. Lubricati
on
D. Malfeasanc
e
E. Exactio
n

83. The finance minister of a developing country demands a heavy payment for approval
of a multi-million dollar contract with a foreign company. This practice would be called
_____.

A. extorti
on
B. subornati
on
C. lubricati
on
D. larcen
y
E. malfeasan
ce

84. _____ generally involves giving large sums of money—frequently not properly
accounted for—designed to entice an official to commit an illegal act on behalf of the
one offering the bribe.

A. Agent
charges
B. Lubricati
on
C. Extortio
n
D. Subornati
on
E. Ranso
m

5-21
85. A manager hires an agent to obtain a license to build a warehouse in an industrial
district. The agent was caught offering a bribe to a government official for issue of the
license. Which of the following describes the manager’s liabilities?

A. The manager is not liable since the use of an agent absolves him of any
responsibility.
B. The manager is liable since the agent used part of his fees for bribery, although the
manager was unaware of the agent’s intentions.
C. The manager is not liable if the agent can prove that extortion, rather than
bribery, took place.
D. The manager is liable if he was aware of the fact that part of the agent’s fee would
be used as a bribe.
E. The manager is liable only if the act of building the warehouse at the given
location is illegal.

86. Which of the following ethical principles tries to optimize the “common good” or
benefits of all constituencies?

A. Secularism and
philanthropy
B. Rights of the
parties
C. Justice or
fairness
D. Utilitarian
ethics
E. Self-reference
frame

87. According to Lester Thurow, a(n) _____ form of capitalism is practiced in Japan and
Germany typified by cooperation among government, management, and labor.

A. agonistic

B. individualis
tic
C. communitari
an
D. protection
ist
E. adversari
al

5-22
88. According to Lester Thurow, in the British–American “individualistic” kind of capitalism
relationships among government, management, and labor in business systems are
_____.

A. cooperati
ve
B. commensalis
tic
C. synergist
ic
D. adversari
al
E. conciliato
ry

89. A culture that is low context, individualistic, low power distance, and uses
monochromic time is _____.

A. information-
oriented
B. relationship-
oriented
C. hierarchy-
oriented
D. labor-
oriented
E. task-
oriented

90. A culture that is high context, has collectivism, high power distance, and uses
polychronic time is _____.

A. information-
oriented
B. relationship-
oriented
C. hierarchy-
oriented
D. power-
oriented
E. task-
oriented

Essay Questions

5-23
91. How important is adaptation in international marketing? What are the basic criteria to
deal with foreign firms?

92. Briefly describe the different types of business customs.

93. Discuss the American manager’s attitude toward objectivity in decision making.

94. What is the fundamental notion of Western management practices? Is it universally
acceptable?

5-24
95. In the context of authority and decision making, briefly describe the shift from
centralized to decentralized decision making.

96. Distinguish between the two time systems in the world, as defined by Edward T. Hall.

97. Describe the popularity of a marketing orientation as compared to a product
orientation.

98. Why do U.S. multinational companies hesitate to offer women international
assignments? Is this prejudice justified?

5-25
99. In the context of business ethics, distinguish between bribery and extortion with
examples.

100 Compare an information-oriented culture like America with a relationship-oriented
. culture like Japan.

5-26
Chapter 05 Culture, Management Style, and Business Systems
Answer Key
True / False Questions

1. Adaptation requires business executives to forsake their ways and change to local
customs.

FALSE
Adaptation does not require business executives to forsake their ways and change
to local customs; rather, executives must be aware of local customs and be willing
to accommodate those differences that can cause misunderstandings.

AACSB: Analytic
Blooms: Understand
Difficulty Level: 2 Medium
Learning Objective: 05-01 The necessity for adapting to cultural differences
Topic: Required Adaptation

2. We are less likely to evaluate a person’s behavior in terms of what is familiar to us
because we use our self-reference criterion (SRC).

FALSE
The self-reference criterion (SRC) is especially operative in business customs. If we

do not understand our foreign counterpart’s customs, we are more likely to
evaluate that person’s behavior in terms of what is familiar to us.

AACSB: Analytic
Blooms: Understand

3. Cultural electives are business customs in which an outsider must not participate.

FALSE
Business customs can be grouped into imperatives, customs that must be

recognized and accommodated; electives, customs to which adaptation is helpful
but not necessary; and exclusives, customs in which an outsider must not
participate.

AACSB: Analytic
Blooms: Understand
5-27

4. Cultural imperatives are business customs that are generally similar across
cultures.

FALSE
A complicating factor in cultural awareness is that what may be an imperative to

avoid in one culture is an imperative to do in another.

AACSB: Analytic
Blooms: Understand

5. The majority of business customs fit into the cultural elective category.

TRUE
Cultural electives relate to areas of behavior or to customs that cultural aliens may
wish to conform to or participate in but that are not required. The majority of
customs fit into this category.

AACSB: Analytic
Blooms: Understand

6. For most U.S. managers, judgment and intuition are the only basis for making
decisions.

FALSE
Although judgment and intuition are important tools for making decisions, most
U.S. managers believe decisions must be supported and based on accurate and
relevant information.

AACSB: Analytic
Blooms: Understand
Topic: The Impact of American Culture on Management Style

5-28
7. The idea of wide sharing in decision making is consistent with the views that one
controls one’s own destiny.

TRUE
Compatible with the views that one controls one's own destiny and that
advancement is based on merit is the prevailing idea of wide sharing in decision
making.

AACSB: Analytic
Blooms: Understand

8. The notion that competition is crucial for efficiency, improvement, and
regeneration is fundamental to Western management practices.

TRUE
Perhaps most fundamental to Western management practices is the notion that

competition is crucial for efficiency, improvement, and regeneration.

AACSB: Analytic
Blooms: Understand

9. High-Power Distance Index countries are more egalitarian than low-Power Distance
Index countries.

FALSE
In high-Power Distance Index (PDI) countries such as Mexico and Malaysia,

understanding the rank and status of clients and business partners is much more
important than in more egalitarian (low-PDI) societies such as Denmark and Israel.

AACSB: Reflective Thinking
Blooms: Understand
Learning Objective: 05-02 How and why management styles vary around the world
Topic: Management Styles around the World

5-29
10. The three typical decision-making patterns are top-level management decisions,

TRUE
Although the international businessperson is confronted with a variety of authority

patterns that can complicate decision making in the global environment, most are
a variation of three typical patterns: top-level management decisions,

AACSB: Analytic
Blooms: Understand

11. As businesses grow and professional management develops, there is a shift toward
centralized management decision making.

FALSE
As businesses grow and professional management develops, there is a shift toward

decentralized management decision making.

AACSB: Analytic
Blooms: Understand

12. In the committee decision setup, every committee member must be convinced of
the merits of the proposition or product in question.

TRUE
Committee decision making is by group or consensus. In the committee decision

setup, every committee member must be convinced of the merits of the
proposition or product in question.

AACSB: Analytic
Blooms: Understand

13. Workers in countries higher in individualism show more commitment than workers
in countries with lower individualism and higher power distance.

TRUE
Research has shown that commitment of workers to their companies tended to be

higher in countries higher in individualism (IDV) and lower in power distance.

AACSB: Analytic
5-30
Blooms: Understand

14. High-context cultures place great importance on the verbal aspects of
communication.

FALSE
Communication in a high-context culture depends heavily on the contextual (who

says it, when it is said, how it is said) or nonverbal aspects of communication,
whereas the low-context culture depends more on explicit, verbally expressed
communications.

AACSB: Analytic
Blooms: Understand

15. Businesspeople in low-context cultures use email more often than those in high-
context cultures.

TRUE
E-mail use and usage rates by managers are also affected by culture. That is,
businesspeople in high-context cultures do not use the medium to the same extent
as those in low-context cultures.

AACSB: Analytic
Blooms: Understand

16. Most high-context cultures operate on monochronic time.

FALSE
M-time, or monochronic time, typifies most North Americans, Swiss, Germans, and
Scandinavians. Most low-context cultures operate on M-time.

AACSB: Analytic
Blooms: Understand

5-31
17. Polychronic time is characterized by “a great involvement with people.”

TRUE
P-time, or polychronic time, is more dominant in high-context cultures, where the

completion of a human transaction is emphasized more than holding to schedules.
P-time is characterized by the simultaneous occurrence of many things and by "a
great involvement with people." P-time allows for relationships to build and context
to be absorbed as parts of high-context cultures.

AACSB: Analytic
Blooms: Understand

18. The treatment local women receive in their own cultures is a clear indicator of how
a foreign businesswoman will be treated.

FALSE
Despite the substantial prejudices toward women in foreign countries, evidence

suggests that prejudice toward foreign women executives may be exaggerated and
that the treatment local women receive in their own cultures is not necessarily an
indicator of how a foreign businesswoman is treated.

AACSB: Analytic
Blooms: Understand
Learning Objective: 05-03 The extent and implications of gender bias in other countries
Topic: Gender Bias in International Business

19. The strength of a firm's backing is the key to success for both women and men in
international business.

FALSE
A key to success for both men and women in international business often hinges on
the strength of a firm's backing. When a female manager receives training and the
strong backing of her firm, she usually receives the respect commensurate with the
position she holds and the firm she represents.

AACSB: Analytic
Blooms: Understand
Topic: Business Ethics

5-32
20. In the United States, bribery is increasingly being considered a way of life because
it is necessary for business.

TRUE
The U.S. advocacy of global antibribery laws has led to a series of accords by the
member nations of the Organization for Economic Cooperation and Development
(OECD), the Organization of American States (OAS), and the United Nations
Convention against Corruption (UNCAC). Long considered almost a way of business
life, bribery and other forms of corruption are now being increasingly criminalized.

AACSB: Analytic
Blooms: Understand
Learning Objective: 05-04 The importance of cultural differences in business ethics

21. The distinction between bribery and extortion depends on whether the activity
resulted from an offer or from a demand for payment.

TRUE
The distinction between bribery and extortion depends on whether the activity
resulted from an offer or from a demand for payment. Voluntarily offered payment
by someone seeking unlawful advantage is bribery. It is extortion if payments are
extracted under duress by someone in authority from a person seeking only what
he or she is lawfully entitled to.

AACSB: Analytic
Blooms: Understand

22. Subornation payments accompany requests for a person to do a job more rapidly or
more efficiently.

FALSE
Lubrication payments accompany requests for a person to do a job more rapidly or

more efficiently; subornation is a request for officials to turn their heads, to not do
their jobs, or to break the law.

AACSB: Analytic
Blooms: Understand

5-33
23. Lubrication is a request for officials to turn their heads, to not do their jobs, or to
break the law.

TRUE
Lubrication payments accompany requests for a person to do a job more rapidly or

more efficiently; subornation is a request for officials to turn their heads, to not do
their jobs, or to break the law.

AACSB: Analytic
Blooms: Understand

24. Utilitarian ethics is the ethical principle that focuses on the optimization of the
“common good.”

TRUE
Three ethical principles also provide a framework to help the marketer distinguish
between right and wrong, determine what ought to be done, and properly justify
his or her actions. They are as follows: Utilitarian ethics: Does the action optimize
the “common good” or benefits of all constituencies? And who are the pertinent
constituencies? Rights of the parties: Does the action respect the rights of the
individuals involved? Justice or fairness: Does the action respect the canons of
justice or fairness to all parties involved?

AACSB: Analytic
Blooms: Understand

25. In the less individualistic cultures, labor and management are generally hostile.

FALSE
In the less individualistic cultures, labor and management cooperate—in Germany

labor is represented on corporate boards, and in Japan, management takes
responsibility for the welfare of the labor force. The individualistic American
approach to labor–management relations is adversarial—each side takes care of
itself.

AACSB: Analytic
Blooms: Understand

5-34
26. A distinguishing characteristic of the type of capitalism common in Chinese culture
is the emphasis on guanxi as the coordinating principle among firms.

TRUE
A fourth kind of capitalism is common in Chinese cultures. Its distinguishing

characteristics are a more entrepreneurial approach and an emphasis on guanxi
(one’s network of personal connections) as the coordinating principle among firms.

AACSB: Analytic
Blooms: Remember

27. Chinese cultures are high on Power Distance Index and low on
Individualism/Collective Index.

TRUE
Chinese cultures are high on Power Distance Index (PDI) and low on
Individualism/Collective Index (IDV), and the strong reciprocity implied by the
notion of guanxi fits the available data well.

AACSB: Analytic
Blooms: Remember
Difficulty Level: 1 Easy

28. High-context cultures score high on power distance and low on individualism.

TRUE
Low-context American culture scores relatively low on power distance and high on
individualism, whereas high-context Arab cultures score high on power distance
and low on individualism.

AACSB: Analytic
Blooms: Understand
Learning Objective: 05-05 The differences between relationship-oriented and information-oriented cultures
Topic: Synthesis: Relationship-Oriented versus Information-Oriented Cultures

5-35
29. The most managerially useful aspect of the synthesis of cultural differences is that
it allows us to make predictions about unfamiliar cultures.

TRUE
The most managerially useful aspect of this synthesis of cultural differences is that
it allows us to make predictions about unfamiliar cultures. Reference to the three
metrics available gives us some clues about how consumers and/or business
partners will behave and think.

AACSB: Analytic
Blooms: Understand

30. It is not possible to obtain measures of linguistic distance for every country and
every person.

FALSE
Measures of linguistic distance (any language can be used as the focal one, not just
English) are available for every country and, indeed, every person. Thus, we would
expect that someone who speaks Javanese as a first language to be relationship
oriented.

AACSB: Analytic
Blooms: Understand

Multiple Choice Questions

5-36
31. Which of the following is a criterion for adaptation when dealing with individuals,
firms, or authorities in foreign countries?

A. Profit
motive
B. Cultural
apathy
C. Hypersensitiv
ity
D. Flexibili
ty
E. Time-
consciousness
As a guide to adaptation, all who wish to deal with individuals, firms, or authorities
in foreign countries should be able to meet 10 basic criteria: (1) open tolerance, (2)
flexibility, (3) humility, (4) justice/fairness, (5) ability to adjust to varying tempos,
(6) curiosity/ interest, (7) knowledge of the country, (8) liking for others, (9) ability
to command respect, and (10) ability to integrate oneself into the environment.

AACSB: Analytic
Blooms: Remember

32. Which of the following is true of adaptation in international marketing?

A. Willingness to adapt is a crucial attitude in international

marketing.
B. Adaptation requires business executives to forsake their ways and change to
local customs.
C. Mere tolerance of alien cultures is sufficient in international
marketing.
D. Open tolerance is considered to be an unnecessary concession to
foreign cultures.
E. Empathy for foreign cultures may lead to cultural
discord.
Adaptation is a key concept in international marketing, and willingness to adapt is

a crucial attitude.

AACSB: Analytic
Blooms: Understand

5-37
33. Business customs can be grouped into:

A. rigid, flexible, and

negotiables.
B. internals, externals, and consensual
customs.
C. imperatives, electives, and
exclusives.
D. national, foreign, and
international.
E. unilateral, bilateral, and
multilateral.
Business customs can be grouped into imperatives, electives, and exclusives.

AACSB: Analytic
Blooms: Understand

34. _____ are the business customs and expectations that must be met and conformed
to or avoided if relationships are to be successful.

A. Cultural
exclusives
B. Business
electives
C. Global
protocols
D. Business
axioms
E. Cultural
imperatives
Cultural imperatives are the business customs and expectations that must be met
and conformed to or avoided if relationships are to be successful.

AACSB: Analytic
Blooms: Remember

5-38
35. Business customs that must be recognized and accommodated are called _____.

A. imperativ
es
B. electiv
es
C. exclusiv
es
D. obligatio
ns
E. constrain
ts

participate.

AACSB: Analytic
Blooms: Remember

36. Business customs to which adaptation is helpful but not necessary are called _____.
A. imperativ
es
B. electiv
es
C. exclusiv
es
D. non-
traditional
E. standardiz
ed

participate.

AACSB: Analytic
Blooms: Remember

5-39
37. Business customs in which an outsider must not participate are called _____.

A. imperativ
es
B. electiv
es
C. exclusiv
es
D. absolut
es
E. statut
es

participate.

AACSB: Analytic
Blooms: Remember

38. Which of the following would most likely be characterized as being an imperative
business custom in many cultures?

A. Establishing
friendships.
B. Speaking the local
language.
C. Understanding the native
religions.
D. Drinking the local
drinks.
E. Having knowledge of the local
sport.
Establishing friendship is an imperative in many cultures. If friendship is not

established, the marketer risks not earning trust and acceptance, the basic cultural
prerequisites for developing and retaining effective business relationships.

Blooms: Apply

5-40
39. Simon Peters, a senior manager at Celise Export Logistics, goes for a meeting in
France to negotiate a deal with the company’s French partners. He dresses
casually in a t-shirt and jeans. His French counterparts call off the meeting and
accuse him of taking a casual attitude toward negotiations. In the context of this
scenario, dressing formally during business meetings is probably a cultural _____ for
the French.

A. imperati
ve
B. electiv
e
C. exclusiv
e
D. oddit
y
E. benchma
rk
Cultural imperatives are the business customs and expectations that must be met
and conformed to or avoided if relationships are to be successful.

Blooms: Apply

40. Betty Roberts became an embarrassment to her company when she joked about
the ruling monarchy in England in front of a group of visiting English
businesspeople. She should have known that political ridicule by a foreigner is
rarely accepted. Ms. Roberts has violated what is known as a cultural _____.

A. imperati
ve
B. electiv
e
C. exclusiv
e
D. landma
rk
E. standar
d
Cultural exclusives are those customs or behavior patterns reserved exclusively for
the locals and from which the foreigner is barred.

Blooms: Apply

5-41
41. Which of the following could be the least acceptable behavior in a business setting,
especially in a cross-cultural scenario?

A. Correcting someone in
public.
B. Staying away from greeting another man with a kiss (a custom in some
countries).
C. Refusing to eat foods that disagree with your
palate.
D. Refusing to drink alcoholic
beverages.
E. Opting not to dance along with the
crowd.
In some cultures, a person’s demeanor is more critical than in other cultures. For
example, it is probably never acceptable to lose your patience, raise your voice, or
correct someone in public, no matter how frustrating the situation. In some cultures
such behavior would only cast you as boorish, but in others, it could end a business
deal.

Blooms: Understand
Difficulty Level: 3 Hard

42. Which of the following views is consistent with normative U.S. cultural concepts?

A. Collective good outweighs the

individual gain.
B. The decision-making power lies in the hands of the highest
authority.
C. Personal relationships are more important in daily life than work and
the company.
D. Independent enterprise is an instrument for social
action.
E. A broader set of stakeholders is crucial to the
company.
The most important ideas on which normative U.S. cultural concepts are based are
the following: 1) "Master of destiny" viewpoint, 2) Independent enterprise as the
instrument of social action, 3) Personnel selection and reward based on merit, 4)
Decisions based on objective analysis, 5) Wide sharing in decision making, 6)
Never-ending quest for improvement, and 7) Competition producing efficiency.

AACSB: Analytic
Blooms: Remember

5-42
43. Which philosophy of U.S. management recognizes that people influence the future
to a large extent and that they control their own fates?

A. Independent enterprise as the instrument of

social action.
B. Wide sharing in decision
making.
C. “Master of destiny”
viewpoint.
D. Never-ending quest for
improvement.
E. Competition produces
efficiency.
The “master of destiny” philosophy is fundamental to U.S. management thought.

Simply stated, people can substantially influence the future; they are in control of
their own destinies. This viewpoint also reflects the attitude that though luck may
influence an individual’s future, on balance, persistence, hard work, a commitment
to fulfill expectations, and effective use of time give people control of their
destinies.

AACSB: Analytic
Blooms: Understand

44. There is a very strong belief in the United States that business decisions must be
supported and based on accurate and relevant information. Which of the following
best describes this approach?

A. “Master of destiny”

viewpoint
B. Independent enterprise as the instrument of
social action
C. Objective
analysis
D. Wide sharing in decision
making
E. Never-ending quest for
improvement
The very strong belief in the United States that business decisions are based on
objective analysis and that managers strive to be scientific has a profound effect
on the U.S. manager’s attitudes toward objectivity in decision making and accuracy
of data. Although judgment and intuition are important tools for making decisions,
most U.S. managers believe decisions must be supported and based on accurate
and relevant information.

AACSB: Analytic
Blooms: Understand
5-43

45. Which of the following is consistent with the American view of the independent
enterprise?

A. A corporation should fall under the control of the state

government.
B. A corporation is an entity that has rules and continuity of
existence.
C. The largest proportion of a corporation’s profits must go to
social causes.
D. A company should be equally owned by all employees and
stakeholders.
E. Corporations do not take precedence over family and social
relationships.
The acceptance of the idea that independent enterprise is an instrument for social
action is the fundamental concept of U.S. corporations. A corporation is recognized
as an entity that has rules and continuity of existence and is a separate and vital
social institution.

AACSB: Analytic
Blooms: Understand

46. The recognition of U.S. corporations as entities that have rules and continuity of
existence and are separate, vital social institutions can result in:

A. feelings of obligation among employees to serve the

company.
B. scientific decision making by employees and
managers.
C. superstitious beliefs playing a role in decision
making.
D. decision making being limited to upper
management.
E. a collectivist identity among
employees.
The acceptance of the idea that independent enterprise is an instrument for social
action is the fundamental concept of U.S. corporations. A corporation is recognized
as an entity that has rules and continuity of existence and is a separate and vital
social institution.

AACSB: Analytic
Blooms: Understand
Difficulty Level: 3 Hard
5-44

47. Adam Smith in his Wealth of Nations stated, “By pursuing his own interest he
frequently promotes that of the society more effectually than when he really
intended to promote it.” What behavior does this notion attempt to justify?

A. Collectivis
m
B. Loyalt
y
C. Gree
d
D. Competitivene
ss
E. Cooperati
on
Adam Smith in his The Wealth of Nations wrote one of the most important
sentences in the English language: “By pursuing his own interests he frequently
promotes that of the society more effectually than when he really intended to
promote it.” This “invisible hand” notion justifies competitive behavior because it
improves society and its organizations.

AACSB: Analytic
Blooms: Understand

48. The notion that _____ is crucial for efficiency, improvement, and regeneration is

A. gree
d
B. collectivis
m
C. centralizati
on
D. competiti
on
E. hierarc
hy
Fundamental to Western management practices is the notion that competition is

crucial for efficiency, improvement, and regeneration.

AACSB: Analytic
Blooms: Remember

5-45
49. In _____ decision making, participation by middle management tends to be
deemphasized.

A. democrat
ic
B. decentraliz
ed
C. decentralized
committee
D. non-
hierarchical
E. top-level
management
Top-level management decision making is generally found in situations in which

family or close ownership gives absolute control to owners and businesses are
small enough to allow such centralized decision making. Decision-making
participation by middle management tends to be deemphasized; dominant family
members make decisions that tend to please the family members more than to
increase productivity.

AACSB: Analytic
Blooms: Remember

50. As businesses grow and professional management develops, there is a shift
toward:

A. centralized group decision

making.
B. decentralized management decision
making.
C. centralized decision
making.
D. top-level management decision
making.
E. experimental decision
making.

decentralized management decision making. Decentralized decision making allows
executives at different levels of management to exercise authority over their own
functions.

AACSB: Analytic
Blooms: Remember

5-46
51. A characteristic of committee decision making is that it is:

A. found in small

businesses.
B. done to please important family
members.
C. based on rank and
hierarchy.
D. rarely employed in Asian
countries.
E. by group or
consensus.
Committee decision making is by group or consensus. Committees may operate on

a centralized or decentralized basis, but the concept of committee management
implies something quite different from the individualized functioning of the top
management and decentralized decision-making arrangements.

AACSB: Analytic
Blooms: Remember

52. Which of the following forms of business decision making is predominant in most
Asian countries?

A. Independe
nt
B. Contractu
al
C. Democrat
ic
D. Grou
p
E. Dictatori
al
Because Asian cultures and religions tend to emphasize harmony and collectivism,
group decision making predominates there.

AACSB: Analytic
Blooms: Remember

5-47
53. In _____ decision making, title or position generally takes precedence over the
individual holding the job.

A. committ
ee
B. decentraliz
ed
C. top-level
management
D. consensu
s
E. dictatori
al
Decentralized decision making allows executives at different levels of management

to exercise authority over their own functions, and title or position generally takes
precedence over the individual holding the job.

AACSB: Analytic
Blooms: Remember

54. Companies in _____ countries have a strong paternalistic orientation, and assume
that individuals will work for one company for the majority of their lives.

A. more
hierarchical
B. more
egalitarian
C. high Power Distance
Index
D. low Uncertainty Avoidance
Index
E. low in
individualism
European companies, particularly in the more hierarchical (Power Distance Index)

countries, such as France and Italy, have a strong paternalistic orientation, and it is
assumed that individuals will work for one company for the majority of their lives.

AACSB: Analytic
Blooms: Remember

5-48
55. In the context of management objectives and aspirations, which of the following is
true of an employee’s personal life?

A. Max Weber discovered that some cultures emphasized profit over
personal life.
B. The Japanese work ethic derives from the belief of
feng shui.
C. Ancient Greek thought considered work to be a desirable factor in
one’s life.
D. To the Japanese, personal life is
company life.
E. McClelland opined that the standard of living enjoyed in the United States
originated from the hard-working Protestant ethic.
To the Japanese, personal life is company life. Many Japanese workers regard their
work as the most important part of their overall lives.

AACSB: Analytic
Blooms: Remember

56. Research has shown that commitment of workers to their companies tended to be
higher in countries:

A. higher in individualism and lower in power

distance.
B. higher in collectivism and lower in
individualism.
C. lower in individualism and higher in power
distance.
D. higher in power distance and higher in
individualism.
E. higher in collectivism and higher in power
distance.
Research has shown that commitment of workers to their companies tended to be

higher in countries higher in individualism (IDV) and lower in power distance (PDI).

AACSB: Analytic
Blooms: Remember

5-49
57. According to Max Weber, at least part of the standard of living in the United States
today can be attributed to the:

A. hard-working Protestant
ethic.
B. artificially low price of
gasoline.
C. almost complete penetration of the
Internet.
D. status equalization by the business
class.
E. slave-labor that formed the basis for early
industry.
According to Max Weber, at least part of the standard of living that we enjoy in the
United States today can be attributed to the hard-working Protestant ethic from
which we derive much of our business heritage.

AACSB: Analytic
Blooms: Remember

58. Which of the following aspects of communication is more important in a low-
context culture?

A. Explicit
communication
B. Nonverbal
communication
C. Contextual
communication
D. Face-to-face
communication
E. Implicit
communication

communications.

AACSB: Communication
Blooms: Understand

5-50
59. According to the high-context/low-context continuum identified by Edward T. Hall,
communication in a low-context culture depends on:

A. the
context.
B. who says
it.
C. when it is
said.
D. how it is
said.
E. the verbal
expression.

communications.

Blooms: Understand

60. Fredrick Keeble, an American manager, took his Swiss client out for a traditional
American dinner. The client did not seem to enjoy the food and left most of it
untouched. After dinner, he asked his client if he had enjoyed the dinner. Which of
the following responses would indicate that the client comes from a low-context
culture?

A. No, I did not like the

food.
B. Yes, but it was a little too
oily.
C. No, I thought the food was
good.
D. Yes, it was lovely,
thanks.
E. Yes, unfortunately I was not very
hungry.
Low-context cultures deliver their opinion without much social padding.

Blooms: Apply

5-51
61. Which of the following is the best means of solving the problem of language on the
Internet?

A. Using minimal language in websites and using graphics and diagrams to convey
messages.
B. Using language translation software to translate communication in all
languages.
C. Having country-specific websites so that everyone can communicate in their
own language.
D. Using foreign language blocking software to screen international
communications.
E. Training employees to communicate in all languages used by foreign
customers.
Estimates are that 78 percent of today’s website content is written in English, but
an English e-mail message cannot be understood by 35 percent of all Internet
users. The solution to the problem is to have country-specific websites, like those of
IBM and Marriott.

Blooms: Remember

62. France is higher on Hofstede’s Power Distance Index (PDI) than the United States
and formality still reigns in France. Which of the following American business
practices would be most unacceptable to the French?

A. Using threats during business

meetings.
B. Interacting with members lower in
rank.
C. Showing impatience at business
negotiations.
D. Using first names in business
encounters.
E. Conducting business over dinner or
lunch.
While using first names in business encounters is regarded as an American vice in

many countries, nowhere is it found more offensive than in France. France is higher
on Hofstede’s Power Distance Index (PDI) than the United States, and such
differences can lead to cultural misunderstandings.

Blooms: Remember

5-52
63. _____ is probably the most common mistake of North Americans attempting to
trade in the Middle East.

A. Drinkin
g
B. Informali
ty
C. Impatien
ce
D. Excessive
negotiation
E. Casual
dressing
Haste and impatience are probably the most common mistakes of North Americans
attempting to trade in the Middle East. Most Arabs do not like to embark on serious
business discussions until after two or three opportunities to meet the individual
they are dealing with.

Blooms: Remember

64. Western cultures like most North Americans, Swiss, Germans, and Scandinavians
tend to concentrate on one thing at a time and are typified by _____ time.

A. polychron
ic
B. bimod
al
C. dua
l
D. monochron
ic
E. sequenc
e
Scandinavians. These Western cultures tend to concentrate on one thing at a time.
They divide time into small units and are concerned with promptness. M-time is
used in a linear way, and it is experienced as almost tangible, in that one saves
time, wastes time, bides time, spends time, and loses time.

AACSB: Analytic
Blooms: Remember

5-53
65. _____ is more dominant in high-context cultures, where the completion of a human
transaction is emphasized more than holding to schedules.

A. Polychronic
time
B. Bimodal
time
C. Dual
time
D. Monochronic
time
E. Sequence
time
Estimates are that 78 percent of today's Web site content is written in English, but
an English e-mail message cannot be understood by 35 percent of all Internet
users. The solution to the problem is to have country-specific Web sites, like those
of IBM and Marriott.

AACSB: Analytic
Blooms: Remember

66. Kan is a customer relations manager with a leading multinational firm. He has
managed various operations and deals with numerous domestic and international
clients everyday. Despite his hectic schedule, Kan never cuts a meeting short with
anyone and frequently postpones subsequent meetings in order to devote ample
time to each of his clients. Which of the following countries is he most probably
from?

A. Japa
n
B. Switzerla
nd
C. The United
States
D. German
y
E. Franc
e
P-time, or polychronic time, is more dominant in high-context cultures, where the

completion of a human transaction is emphasized more than holding to schedules.
P-time allows for relationships to build and context to be absorbed as parts of high-
context cultures.

AACSB: Analytic
Blooms: Remember
5-54

67. People in Brazil describe themselves as late arrivers, allow greater flexibility in
defining early and late, are less concerned about being late, and are more likely to
blame external factors for their lateness. Which system of time do the Brazilian
people most likely operate on?

A. Polychronic
time
B. Bimodal
time
C. Dual
time
D. Monochronic
time
E. Sequence
time
The P-time system gives rise to looser time schedules, deeper involvement with
individuals, and a wait-and-see-what develops attitude.

AACSB: Analytic
Blooms: Apply

68. When compared to people operating on P-time, people operating on M-time:

A. follow looser time

schedules.
B. are more deeply involved with
individuals.
C. have a wait-and-see-what develops
attitude.
D. are more likely to blame external factors for their
lateness.
E. tend to concentrate on one thing at
a time.
Scandinavians. These Western cultures tend to concentrate on one thing at a time.

AACSB: Analytic
Blooms: Understand

5-55
69. A firm whose marketing orientation is based on the belief that consumers and
businesses alike will not buy enough without prodding is _____ oriented.

A. distributi
on
B. proces
s
C. producti
on
D. produ
ct
E. sellin
g
A firm whose marketing orientation is based on the belief that consumers and
businesses alike will not buy enough without prodding is selling oriented.

AACSB: Analytic
Blooms: Understand

70. Which of the following is true of the effect of differences in culture in business
negotiations?

A. The basic elements of business negotiations differ from country

to country.
B. The risk of misunderstanding increases when negotiating with someone from a
different culture.
C. The possibility of misinterpretation is decreased when one uses one’s self-
reference criterion.
D. A standard rule in negotiating is to know your
counterpart first.
E. The negotiator’s cultural background need not have a bearing on the
business talks.
It is important to remember that the negotiating process is complicated, and the

risk of misunderstanding increases when negotiating with someone from another
culture.

AACSB: Analytic
Blooms: Understand

5-56
71. Which of the following is true of P-time and M-time?

A. The American desire to get down to business is a manifestation of a P-

time culture.
B. The M-time system gives rise to looser time
schedules.
C. M-time is characterized by the simultaneous occurrence of
many things.
D. As global markets expand, more businesspeople from P-time cultures are
adapting to M-time.
E. Interruptions are routine for M-time
businesspeople.
The important thing for the U.S. manager to learn is adjustment to P-time in order
to avoid the anxiety and frustration that comes from being out of synchronization
with local time. As global markets expand, however, more businesspeople from P-
time cultures are adapting to M-time.

AACSB: Analytic
Blooms: Understand

72. Which of the following best explains the low percentage of women chosen for
international assignments in the United States?

A. The traditional role of women as homemakers and caregivers does not allow for
international assignments.
B. Women managers from the United States have a poorer track record when
compared to their male counterparts.
C. Prejudice faced by American women executives in foreign, male-dominated
societies is exaggerated.
D. There is a wide spread belief that roles of women in male-dominated societies
precludes women from being successful in these societies.
E. Expenses involved in sending a women executive abroad are far higher than the
expenses in sending a man abroad.
The gender bias against female managers that exists in some countries, coupled
with myths harbored by male managers, creates hesitancy among U.S.
multinational companies to offer women international assignments. The most
frequently cited reason is the inability for women to succeed abroad. Unfortunately,
such attitudes are shared by many and probably stem from the belief that the
traditional roles of women in male-dominated societies preclude women from
establishing successful relationships with host-country associates.

AACSB: Analytic
Blooms: Understand

5-57
73. In the context of business ethics, which of the following factors kept the American
economy afloat at the turn of the century?

A. Missionaries and religious

movements
B. Cultural
homogenization
C. Rampant
consumerism
D. Intellectual property
laws
E. Currency
speculators
The individualism so important to Americans can also be seen as a kind of

corruption. In India many attribute the decline in the society there to the rampant
consumerism, such as that promoted on MTV. Such rampant consumerism is what
kept the American economy afloat right after the turn of the century.

AACSB: Analytic
Blooms: Understand

74. In the context of business ethics, many people in sub-Saharan Africa view Western
_____ as a kind of exploitation that prevents treatment of AIDS for millions.

A. missionaries and religious

movements
B. individualis
m
C. R-rated American
movies
D. intellectual property
laws
E. currency
speculators
Many in sub-Saharan Africa view Western intellectual property laws as a kind of

exploitation that prevents treatment of AIDS for millions.

AACSB: Analytic
Blooms: Understand

5-58
75. Which organization conducts an international survey of businesspeople, political
analysts, and the general public on corruption and compiles the Corruption
Perception Index (CPI)?

A. Organization of American States

(OAS).
B. United Nations Convention against Corruption
(UNCAC).
C. Organization for Economic Cooperation and Development
(OECD).
D. Transparency International
(TI).
E. World Trade Organization
(WTO).
Among its various activities, TI conducts an international survey of businesspeople,

political analysts, and the general public to determine their perceptions of
corruption in 182 countries in the Corruption Perception Index (CPI).

AACSB: Analytic
Blooms: Remember

76. Which of the following is true of the findings of Transparency International’s
Corruption Perception Index?

A. Lower levels of bribery have been found in nations with a

communist past.
B. Higher levels of bribery have been found in low-power
distance nations.
C. Higher levels of bribery have been found in low-income
nations.
D. Lower levels of bribery have been found in collectivistic
cultures.
E. Lower levels of bribery have been found in low-income
nations.
Transparency International’s CPI is also proving useful in academic studies of the

causes and consequences of bribery. Higher levels of bribery have been found in
low-income nations and nations with a communist past, both aspects of the
political economy.

AACSB: Analytic
Blooms: Remember

5-59
77. Which of the following is true of the business community’s view about payoffs?

A. The decision to pay a bribe is ethical in the

business world.
B. During the 1970s, the United States had strict laws against paying bribes in
foreign countries.
C. The Securities and Exchange Commissions requires all types of corporations to
report their expenditures.
D. Payoffs are restricted to the multinational companies headquartered in the
United States.
E. Many global competitors perceive payoffs as a necessary means to accomplish
business goals.
The decision to pay a bribe creates a major conflict between what is ethical and
proper and what appears to be profitable and sometimes necessary for business.
Many global competitors perceive payoffs as a necessary means to accomplish
business goals.

AACSB: Analytic
Blooms: Remember

78. Academic studies of the causes and consequences of bribery, conducted by
Transparency International (TI), indicate corruption is greater in:

A. high income

nations.
B. democratic rather than communist
countries.
C. countries with high
individualism.
D. countries with low Power Distance
Index.
E. collectivistic
nations.
According to studies conducted by Transparency International, higher levels of

bribery have been found in low-income nations and nations with a communist past,
both aspects of the political economy. Additionally, higher levels of bribery have
been found in collectivistic (IDV) and high power distance (PDI) countries.

AACSB: Analytic
Blooms: Understand

5-60
79. Which aspect of Japanese culture, predicted by many to favor bribery, makes
Japan's success in reducing corruption more remarkable?

A. Relationship-
orientation
B. Mechanistic
inclination
C. Patriarchal
nature
D. Ritualistic
nature
E. Consumeris
m
Japan’s successes in reducing corruption in its business system are all the more
remarkable because of its relationship-oriented culture, which would be predicted
by many to favor bribery.

AACSB: Analytic
Blooms: Understand

80. Which of the following countries is more likely to exhibit higher levels of bribery?

A. Individualistic
cultures.
B. Countries with a strong dependence on
international trade.
C. Nations with a communist
past.
D. High-income
nations.
E. Countries with low-power
distance.
Higher levels of bribery have been found in low-income nations and nations with a
communist past, both aspects of the political economy. Additionally, higher levels
of bribery have been found in collectivistic (IDV) and high power distance (PDI)
countries.

AACSB: Analytic
Blooms: Understand

5-61
81. _____ occurs when payments are extracted under duress by someone in authority
from a person seeking only what he or she is lawfully entitled to.

A. Extortio
n
B. Subornati
on
C. Lubricati
on
D. Larcen
y
E. Briber
y
Extortion occurs when payments are extracted under duress by someone in

authority from a person seeking only what he or she is lawfully entitled to.

AACSB: Analytic
Blooms: Understand

82. _____ involves a relatively small sum of cash, a gift, or a service that is intended to
facilitate or expedite the normal, lawful performance of a duty by an official.

A. Extortio
n
B. Subornati
on
C. Lubricati
on
D. Malfeasanc
e
E. Exactio
n
Lubrication involves a relatively small sum of cash, a gift, or a service given to a

low-ranking official in a country where such offerings are not prohibited by law. The
purpose of such a gift is to facilitate or expedite the normal, lawful performance of
a duty by that official.

AACSB: Analytic
Blooms: Understand

5-62
83. The finance minister of a developing country demands a heavy payment for
approval of a multi-million dollar contract with a foreign company. This practice
would be called _____.

A. extorti
on
B. subornati
on
C. lubricati
on
D. larcen
y
E. malfeasan
ce
resulted from an offer or from a demand for payment. It is extortion if payments
are extracted under duress by someone in authority from a person seeking only
what he or she is lawfully entitled to.

AACSB: Analytic
Blooms: Apply

84. _____ generally involves giving large sums of money—frequently not properly
accounted for—designed to entice an official to commit an illegal act on behalf of
the one offering the bribe.

A. Agent
charges
B. Lubricati
on
C. Extortio
n
D. Subornati
on
E. Ranso
m
Subornation generally involves giving large sums of money—frequently not

properly accounted for—designed to entice an official to commit an illegal act on
behalf of the one offering the bribe.

AACSB: Analytic
Blooms: Remember

5-63
85. A manager hires an agent to obtain a license to build a warehouse in an industrial
district. The agent was caught offering a bribe to a government official for issue of
the license. Which of the following describes the manager’s liabilities?

A. The manager is not liable since the use of an agent absolves him of any
responsibility.
B. The manager is liable since the agent used part of his fees for bribery, although
the manager was unaware of the agent’s intentions.
C. The manager is not liable if the agent can prove that extortion, rather than
bribery, took place.
D. The manager is liable if he was aware of the fact that part of the agent’s fee
would be used as a bribe.
E. The manager is liable only if the act of building the warehouse at the given
location is illegal.
The Foreign Corrupt Practices Act (FCPA) prohibits U.S. businesses from paying
bribes openly or using intermediaries as conduits for a bribe when the U.S.
manager knows that part of the intermediary’s payment will be used as a bribe.

AACSB: Analytic
Blooms: Remember

86. Which of the following ethical principles tries to optimize the “common good” or
benefits of all constituencies?

A. Secularism and

philanthropy
B. Rights of the
parties
C. Justice or
fairness
D. Utilitarian
ethics
E. Self-reference
frame
Three ethical principles provide a framework to help the marketer distinguish

between right and wrong, determine what ought to be done, and properly justify
his or her actions. Simply stated, they are as follows: • Utilitarian ethics: Does the
action optimize the “common good” or benefits of all constituencies? And who are
the pertinent constituencies? • Rights of the parties: Does the action respect the
rights of the individuals involved? • Justice or fairness: Does the action respect the
canons of justice or fairness to all parties involved?

AACSB: Analytic
Blooms: Remember
5-64

87. According to Lester Thurow, a(n) _____ form of capitalism is practiced in Japan and
Germany typified by cooperation among government, management, and labor.

A. agonistic

B. individualis
tic
C. communitari
an
D. protection
ist
E. adversari
al
Thurow distinguished between the British–American “individualistic” kind of

capitalism and the “communitarian” form of capitalism in Japan and Germany. The
business systems in the latter two countries are typified by cooperation among
government, management, and labor, particularly in Japan. Contrarily, adversarial
relationships among labor, management, and government are more the norm in
the United Kingdom, and particularly in the United States.

AACSB: Analytic
Blooms: Understand

88. According to Lester Thurow, in the British–American “individualistic” kind of
capitalism relationships among government, management, and labor in business
systems are _____.

A. cooperati
ve
B. commensalis
tic
C. synergist
ic
D. adversari
al
E. conciliato
ry
Thurow distinguished between the British–American “individualistic” kind of

capitalism and the “communitarian” form of capitalism in Japan and Germany. The
business systems in the latter two countries are typified by cooperation among
government, management, and labor, particularly in Japan. Contrarily, adversarial
relationships among labor, management, and government are more the norm in
the United Kingdom, and particularly in the United States.

AACSB: Analytic
5-65
Blooms: Understand

89. A culture that is low context, individualistic, low power distance, and uses
monochromic time is _____.

A. information-
oriented
B. relationship-
oriented
C. hierarchy-
oriented
D. labor-
oriented
E. task-
oriented
American culture is low context, individualistic (IDV), low power distance (PDI),
obviously close to English, monochronic time–oriented, linguistically direct, and
foreground focused, and it achieves efficiency through competition; therefore, it is
categorized as an information-oriented culture.

AACSB: Analytic
Blooms: Understand

90. A culture that is high context, has collectivism, high power distance, and uses
polychronic time is _____.

A. information-
oriented
B. relationship-
oriented
C. hierarchy-
oriented
D. power-
oriented
E. task-
oriented
Japanese culture is high context, collectivistic, high power distance, far from
English, polychronic (in part), linguistically indirect, and background focused, and it
achieves efficiency through reduction of transaction costs; therefore, it is properly
categorized as a relationship-oriented culture.

AACSB: Analytic
Blooms: Understand
5-66

Essay Questions

91. How important is adaptation in international marketing? What are the basic criteria
to deal with foreign firms?

Adaptation is a key concept in international marketing, and willingness to adapt is

a crucial attitude. Adaptation, or at least accommodation, is required on small
matters as well as large ones. In fact, small, seemingly insignificant situations are
often the most crucial. More than tolerance of an alien culture is required.
Affirmative acceptance, that is, open tolerance may be needed as well. Through
such affirmative acceptance, adaptation becomes easier because empathy for
another’s point of view naturally leads to ideas for meeting cultural differences. As
a guide to adaptation, all who wish to deal with individuals, firms, or authorities in
foreign countries should be able to meet ten basic criteria:
• open tolerance,
• flexibility,
• humility,
• justice/fairness,
• ability to adjust to varying tempos,
• curiosity/interest,
• knowledge of the country,
• liking for others,
• ability to command respect, and
• ability to integrate oneself into the environment.

AACSB: Analytic
Blooms: Remember

5-67
92. Briefly describe the different types of business customs.

Business customs can be grouped into cultural imperatives, cultural electives, and
cultural exclusives.
• Cultural imperatives are the business customs and expectations that must be
met and conformed to or avoided if relationships are to be successful. A
complicating factor in cultural awareness is that what may be an imperative to
avoid in one culture is an imperative to do in another.
• Cultural electives relate to areas of behavior or to customs that cultural aliens

may wish to conform to or participate in but that are not required. In other
words, following the custom in question is not particularly important but is
permissible. The majority of customs fit into this category. A cultural elective in
one county may be an imperative in another. Cultural electives are the most
visibly different customs and thus more obvious. Often, it is compliance with the
less obvious imperatives and exclusives that is more critical.
• Cultural exclusives are those customs or behavior patterns reserved

exclusively for the locals and from which the foreigner is barred. Foreign
managers need to be perceptive enough to know when they are dealing with an
imperative, an elective, or an exclusive and have the adaptability to respond to
each. There are not many imperatives or exclusives, but most offensive
behaviors result from not recognizing them.

AACSB: Analytic
Blooms: Remember

5-68
93. Discuss the American manager’s attitude toward objectivity in decision making.

The very strong belief in the United States that business decisions are based on
objective analysis and that managers strive to be scientific has a profound effect
on the U.S. manager's attitudes toward objectivity in decision making and accuracy
of data. Although judgment and intuition are important tools for making decisions,
most U.S. managers believe decisions must be supported and based on accurate
and relevant information. Thus, in U.S. business, great emphasis is placed on the
collection and free flow of information to all levels within the organization and on
frankness of expression in the evaluation of business opinions or decisions. In other
cultures, such factual and rational support for decisions is not as important; the
accuracy of data and even the proper reporting of data are not prime prerequisites.
Furthermore, existing data frequently are for the eyes of a select few. The
frankness of expression and openness in dealing with data, characteristic of U.S.
businesses, do not fit easily into some cultures.

AACSB: Analytic
Blooms: Understand

94. What is the fundamental notion of Western management practices? Is it universally
acceptable?

Perhaps most fundamental to Western management practices is the notion that

competition is crucial for efficiency, improvement, and regeneration. The notion of
the “invisible hand,” propounded by Adam Smith, justifies competitive behavior
because it improves society and its organizations. Competition among salespeople
is a good thing because it promotes better individual performance and,
consequently, better corporate performance. However, managers and policymakers
in other cultures often do not share this “greed is good” view. Cooperation is more
salient, and efficiencies are attained through reduced transaction costs. These
latter views are more prevalent in collectivistic cultures such as China and Japan.

AACSB: Analytic
Blooms: Understand

5-69
95. In the context of authority and decision making, briefly describe the shift from
centralized to decentralized decision making.

The international businessperson is confronted with three typical patterns of

decision making: top-level management decisions, decentralized decisions, and
committee or group decisions. Top-level management decision making is generally
found in situations in which family or close ownership gives absolute control to
owners and businesses are small enough to allow such centralized decision making.
decentralized management decision making. Decentralized decision making allows
executives at different levels of management to exercise authority over their own
functions. This approach is typical of large-scale businesses with highly developed
management systems, such as those found in the United States. A trader in the
United States is likely to be dealing with middle management, and title or position
generally takes precedence over the individual holding the job.

AACSB: Analytic
Blooms: Understand

96. Distinguish between the two time systems in the world, as defined by Edward T.
Hall.

Edward Hall defines two time systems in the world: monochronic and polychronic
time. M-time, or monochronic time, typifies most North Americans, Swiss, Germans,
and Scandinavians. These Western cultures tend to concentrate on one thing at a
time. They divide time into small units and are concerned with promptness. M-time
is used in a linear way, and it is experienced as almost tangible, in that one saves
time, wastes time, bides time, spends time, and loses time. Most low-context
cultures operate on M-time. P-time, or polychronic time, is more dominant in high-
context cultures, where the completion of a human transaction is emphasized more
than holding to schedules. P-time is characterized by the simultaneous occurrence
of many things and by “a great involvement with people.” P-time allows for
relationships to build and context to be absorbed as parts of high-context cultures.

AACSB: Analytic
Blooms: Remember

5-70
97. Describe the popularity of a marketing orientation as compared to a product
orientation.

The extent of a company's marketing orientation has been shown to relate

positively to profits. Although American companies are increasingly embracing this
notion (and marketing in general), firms in other countries have not been so fast to
change from the more traditional production (consumers prefer products that are
widely available), product (consumers favor products that offer the best quality,
performance, or innovative features), and selling (consumers and businesses alike
will not buy enough without prodding) orientations. Recently researchers have
empirically verified that for various complex reasons, including cultural
explanations, a marketing orientation is less prevalent in a number of other
countries; and it can be difficult to encourage such an orientation across diverse
business units in global companies.

AACSB: Analytic
Blooms: Understand

98. Why do U.S. multinational companies hesitate to offer women international
(p. 142 assignments? Is this prejudice justified?
)

The gender bias against female managers that exists in some countries, coupled
with myths harbored by male managers, creates hesitancy among U.S.
multinational companies to offer women international assignments. Despite the
substantial prejudices toward women in foreign countries, evidence suggests that
prejudice toward foreign women executives may be exaggerated and that the
treatment local women receive in their own cultures is not necessarily an indicator
of how a foreign businesswoman is treated. A key to success for both men and
women in international business often hinges on the strength of a firm’s backing.
When a female manager receives training and the strong backing of her firm, she
usually receives the respect commensurate with the position she holds and the
firm she represents. For success, a woman needs a title that gives immediate
credibility in the culture in which she is working and a support structure and
reporting relationship that will help her get the job done. In short, with the power of
the corporate organization behind her, resistance to her as a woman either does
not materialize or is less troublesome than anticipated. Once business negotiations
begin, the willingness of a business host to engage in business transactions and the
respect shown to a foreign businessperson grow or diminish depending on the
business skills he or she demonstrates, regardless of gender.

AACSB: Analytic
Blooms: Understand

5-71
99. In the context of business ethics, distinguish between bribery and extortion with
examples.

resulted from an offer or from a demand for payment. Voluntarily offered payment
by someone seeking unlawful advantage is bribery. For example, it is bribery if an
executive of a company offers a government official payment in exchange for the
official incorrectly classifying imported goods so the shipment will be taxed at a
lower rate than the correct classification would require. However, it is extortion if
payments are extracted under duress by someone in authority from a person
seeking only what he or she is lawfully entitled to. An example of extortion would
be a finance minister of a country demanding heavy payments under the threat
that a contract for millions of dollars would be voided.

AACSB: Analytic
Blooms: Understand

100. Compare an information-oriented culture like America with a relationship-oriented
culture like Japan.

American culture is low context, individualistic (IDV), low power distance (PDI),
obviously close to English, monochronic time–oriented, linguistically direct, and
foreground focused, and it achieves efficiency through competition; therefore, it is
categorized as an information-oriented culture. Alternatively, Japanese culture is
high context, collectivistic, high power distance, far from English, polychronic (in
part), linguistically indirect, and background focused, and it achieves efficiency
through reduction of transaction costs; therefore, it is properly categorized as a
relationship-oriented culture. All these traits are so even though both the United
States and Japan are high-income democracies. Both cultures do achieve efficiency
but through different emphases. The American business system uses competition,
whereas the Japanese depend more on reducing transaction costs.

AACSB: Analytic
Blooms: Understand

5-72

Culture, Management Style, and Business Systems: True / False Questions

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Chapter 05

Culture, Management Style, and Business Systems

True / False Questions

Multiple Choice Questions

A. Willingness to adapt is a crucial attitude in international

A. rigid, flexible, and

A. Collective good outweighs the

A. Independent enterprise as the instrument of

A. A corporation should fall under the control of the state

A. feelings of obligation among employees to serve the

A. centralized group decision

A. Max Weber discovered that some cultures emphasized profit over

A. higher in individualism and lower in power

A. No, I did not like the

A. Using threats during business

A. follow looser time

A. The basic elements of business negotiations differ from country

A. The American desire to get down to business is a manifestation of a P-

A. Missionaries and religious

A. missionaries and religious

A. Organization of American States

A. Lower levels of bribery have been found in nations with a

A. The decision to pay a bribe is ethical in the

True / False Questions

The self-reference criterion (SRC) is especially operative in business customs. If we

Business customs can be grouped into imperatives, customs that must be

A complicating factor in cultural awareness is that what may be an imperative to

Perhaps most fundamental to Western management practices is the notion that

In high-Power Distance Index (PDI) countries such as Mexico and Malaysia,

Although the international businessperson is confronted with a variety of authority

As businesses grow and professional management develops, there is a shift toward

Committee decision making is by group or consensus. In the committee decision

Research has shown that commitment of workers to their companies tended to be

Communication in a high-context culture depends heavily on the contextual (who

P-time, or polychronic time, is more dominant in high-context cultures, where the

Despite the substantial prejudices toward women in foreign countries, evidence

Lubrication payments accompany requests for a person to do a job more rapidly or

Lubrication payments accompany requests for a person to do a job more rapidly or

In the less individualistic cultures, labor and management cooperate—in Germany

A fourth kind of capitalism is common in Chinese cultures. Its distinguishing

Multiple Choice Questions

A. Willingness to adapt is a crucial attitude in international

Adaptation is a key concept in international marketing, and willingness to adapt is

A. rigid, flexible, and

Business customs can be grouped into imperatives, electives, and exclusives.

Business customs can be grouped into imperatives, customs that must be

Business customs can be grouped into imperatives, customs that must be

Business customs can be grouped into imperatives, customs that must be

Establishing friendship is an imperative in many cultures. If friendship is not

A. Collective good outweighs the

A. Independent enterprise as the instrument of

The “master of destiny” philosophy is fundamental to U.S. management thought.

A. “Master of destiny”

A. A corporation should fall under the control of the state

A. feelings of obligation among employees to serve the

Fundamental to Western management practices is the notion that competition is

Top-level management decision making is generally found in situations in which

A. centralized group decision

As businesses grow and professional management develops, there is a shift toward