2026 | Exam Questions &
Answers | Objective Assessment |
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## TABLE OF CONTENTS
| Domain | Focus Area | Weight | Questions |
|--------|------------|---------|-----------|
| Domain 1 | Drivers of Internationalization & Global Business Strategy | 15% | 45 |
| Domain 2 | Organizational Structures & Design | 15% | 45 |
| Domain 3 | Cultural Frameworks & Cross-Cultural Management | 15% | 45 |
| Domain 4 | Global Staffing & Talent Management | 15% | 45 |
| Domain 5 | Expatriate Management & Repatriation | 10% | 30 |
| Domain 6 | Mergers, Acquisitions & Joint Ventures | 10% | 30 |
| Domain 7 | Global HR Compliance, Ethics & CSR | 10% | 30 |
| Domain 8 | IHRM Research & Contemporary Issues | 10% | 30 |
| **TOTAL** | | **100%** | **300+** |
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[DOMAIN 1: DRIVERS OF INTERNATIONALIZATION & GLOBAL BUSINESS STRATEGY -
#
45 Questions]
## 1.1 Drivers of Internationalization
* *Question 1:** What are the two primary drivers that cause firms to internationalize?
A) New markets and homogenization of consumer demands
B) Cost reduction and resource acquisition
C) New markets and cost reduction
D) Technology advancement and global competition
**[CORRECT] A**
,* *Rationale:** The two primary drivers of internationalization are new markets and
homogenization of consumer demands. While cost reduction is important, it is not considered
one of the two primary drivers. Technology advancement facilitates internationalization but is not
a primary driver itself.
---
* *Question 2:** Which of the following best describes why companies primarily globalize to enter
new markets?
A) To reduce operational costs exclusively
B) To increase revenue streams and maintain competitive positioning
C) To access cheaper labor markets only
D) To avoid domestic regulatory requirements
**[CORRECT] B**
* *Rationale:** Companies globalize primarily to enter new markets, increase revenue, and
remain competitive. While cost reduction is a benefit, market expansion is the fundamental
strategic driver for internationalization.
---
* *Question 3:** What type of operations drive international expansion through lower-cost
operations found in other countries?
A) Market-seeking behavior
B) Cost reduction
C) Efficiency-seeking behavior
C) Resource-seeking behavior
**[CORRECT] B**
* *Rationale:** Cost reduction through lower-cost operations in other countries is a key driver of
international expansion. This includes accessing cheaper labor, materials, or operational costs.
---
* *Question 4:** Internationalization historically began with which type of firms?
A) Small firms from developing countries
B) Large firms from major developed (industrialized) countries
C) Medium-sized enterprises seeking niche markets
D) Government-owned enterprises
**[CORRECT] B**
,* *Rationale:** Internationalization began with large firms from major developed (industrialized)
countries, not small firms. These large multinationals had the resources and capabilities to
expand globally first.
---
* *Question 5:** Which internationalization method involves relocation of business processes to
another country where work is performed by an entity owned by the firm but staffed with foreign
personnel?
A) Outsourcing
B) Offshoring
C) Contract manufacturing
D) Licensing
**[CORRECT] B**
* *Rationale:** Offshoring specifically involves relocation of business processes to another
country where the work is performed by an entity owned by the firm but staffed with foreign
personnel. This differs from outsourcing where work is performed by an external third party.
---
## 1.2 Internationalization Methods & Strategies
* *Question 6:** What characterizes an international business strategy?
A) Customizing products for each local market independently
B) Marketing and selling the same product or service both locally and internationally using small
sales offices
C) Establishing full overseas operations with localized production
D) Creating joint ventures for market entry
**[CORRECT] B**
* *Rationale:** International business strategy involves the organization marketing and selling
the same product or service both locally and internationally, typically using small sales offices
rather than establishing full overseas operations.
---
* *Question 7:** Which strategy involves a global focus with localization efforts to appear as a
local firm in each country?
A) Multidomestic strategy
B) Transnational strategy
, ) Global strategy
C
D) International strategy
**[CORRECT] B**
* *Rationale:** Transnational strategy maintains a global focus while making localization efforts
to appear as a local firm in each country. This balances global efficiency with local
responsiveness.
---
* *Question 8:** In a multidomestic strategy, how do subsidiaries typically operate?
A) Under strict control from headquarters with standardized processes
B) Independently within each country, often independently of parent company headquarters
C) Through regional centers coordinating multiple countries
D) With complete autonomy from the parent company
**[CORRECT] B**
* *Rationale:** In a multidomestic strategy, subsidiaries operate independently within each
country, often independently of parent company headquarters. This allows maximum local
responsiveness.
---
## 1.3 Global Business Strategies
* *Question 9:** Which strategy emphasizes headquarters' culture and practices above local
considerations?
A) Polycentric strategy
B) Ethnocentric strategy
C) Geocentric strategy
D) Regiocentric strategy
**[CORRECT] B**
* *Rationale:** Ethnocentric strategy emphasizes headquarters' culture and practices, with key
decisions made at the home office and little adaptation to local conditions.
---
* *Question 10:** Which strategy emphasizes local responsiveness in each country?
A) Ethnocentric strategy
B) Polycentric strategy