MNB3701: International Business Management - 5-Star Mastery Guide
1. Q: What is the primary distinction between a multinational corporation
(MNC) and a transnational corporation (TNC)?
• A: While both operate globally, an MNC typically replicates its operations
in multiple countries, often with a centralized HQ. A TNC is more integrated
and decentralized, viewing the world as a single market without borders and
tailoring strategies to local contexts. TNCs emphasize a global network.
2. Q: Define Globalization. What are its two main drivers?
• A: Globalization is the process of interaction and integration among people,
companies, and governments worldwide. Its two main drivers
are Technological advancements (in communication and transport) and
the Liberalization of trade and investment (reduced tariffs and open
markets).
3. Q: What is the core function of the World Trade Organization (WTO)?
• A: The WTO's core function is to oversee the global rules of trade between
nations. Its primary goal is to ensure that trade flows as smoothly,
, predictably, and freely as possible by negotiating trade agreements and
settling disputes.
4. Q: How does the International Monetary Fund (IMF) differ from
the World Bank?
• A: The IMF focuses on global macroeconomic and financial stability,
providing short-to-medium-term loans and policy advice to countries in
balance-of-payments crises. The World Bank focuses on long-term
economic development and poverty reduction by financing specific projects
(e.g., infrastructure, education).
5. Q: What is a Political Risk in international business? Provide one
example.
• A: Political risk is the risk that political decisions, events, or conditions in a
country will negatively affect a business's profitability or
sustainability. Example: The nationalization of a foreign-owned oil
company by a host government.
6. Q: Explain the concept of Foreign Exchange Risk.
, • A: Foreign exchange risk is the risk that changes in currency exchange rates
will adversely affect the value of a company's assets, investments, or income
earned abroad.
7. Q: What is the significance of a country's legal system (e.g., Common
Law vs. Civil Law) for an international manager?
• A: The legal system determines how contracts are enforced, disputes are
settled, and intellectual property is protected. Understanding it is crucial for
compliance, risk management, and strategic planning.
8. Q: What does PESTLE Analysis stand for?
• A: Political, Economic, Social, Technological, Legal, and Environmental.
It's a framework for analyzing the external macro-environmental factors that
can impact an organization.
9. Q: What is Ethical Relativism in the context of international business?
• A: Ethical relativism is the belief that a company should adopt the ethics of
the cultures in which it operates ("When in Rome, do as the Romans do").
This can conflict with universal ethical standards.
10. Q: What is Corporate Social Responsibility (CSR) in a global context?
- A: CSR is a business model where companies integrate social and environmental
1. Q: What is the primary distinction between a multinational corporation
(MNC) and a transnational corporation (TNC)?
• A: While both operate globally, an MNC typically replicates its operations
in multiple countries, often with a centralized HQ. A TNC is more integrated
and decentralized, viewing the world as a single market without borders and
tailoring strategies to local contexts. TNCs emphasize a global network.
2. Q: Define Globalization. What are its two main drivers?
• A: Globalization is the process of interaction and integration among people,
companies, and governments worldwide. Its two main drivers
are Technological advancements (in communication and transport) and
the Liberalization of trade and investment (reduced tariffs and open
markets).
3. Q: What is the core function of the World Trade Organization (WTO)?
• A: The WTO's core function is to oversee the global rules of trade between
nations. Its primary goal is to ensure that trade flows as smoothly,
, predictably, and freely as possible by negotiating trade agreements and
settling disputes.
4. Q: How does the International Monetary Fund (IMF) differ from
the World Bank?
• A: The IMF focuses on global macroeconomic and financial stability,
providing short-to-medium-term loans and policy advice to countries in
balance-of-payments crises. The World Bank focuses on long-term
economic development and poverty reduction by financing specific projects
(e.g., infrastructure, education).
5. Q: What is a Political Risk in international business? Provide one
example.
• A: Political risk is the risk that political decisions, events, or conditions in a
country will negatively affect a business's profitability or
sustainability. Example: The nationalization of a foreign-owned oil
company by a host government.
6. Q: Explain the concept of Foreign Exchange Risk.
, • A: Foreign exchange risk is the risk that changes in currency exchange rates
will adversely affect the value of a company's assets, investments, or income
earned abroad.
7. Q: What is the significance of a country's legal system (e.g., Common
Law vs. Civil Law) for an international manager?
• A: The legal system determines how contracts are enforced, disputes are
settled, and intellectual property is protected. Understanding it is crucial for
compliance, risk management, and strategic planning.
8. Q: What does PESTLE Analysis stand for?
• A: Political, Economic, Social, Technological, Legal, and Environmental.
It's a framework for analyzing the external macro-environmental factors that
can impact an organization.
9. Q: What is Ethical Relativism in the context of international business?
• A: Ethical relativism is the belief that a company should adopt the ethics of
the cultures in which it operates ("When in Rome, do as the Romans do").
This can conflict with universal ethical standards.
10. Q: What is Corporate Social Responsibility (CSR) in a global context?
- A: CSR is a business model where companies integrate social and environmental
