C211 Study Guide Questions V4
The following questions are developed as a study aid for C211 – Global Economics for Man-
agers. They cover important concepts in each competency. The questions are designed to serve
as an indicator of your preparedness to take the C211 assessment. You can use these to help you
take notes as you go through the chapters. You may also use them to reinforce your understand-
ing after covering the material.
Competency 1: Business Decision-Making in the Global Environment
Globalization (Peng Chapters 1, 5, 6, 11)
1. List and explain the two core perspectives for global business in detail with examples for
each.
Industry-Based View
• Focus: external environment (competition, industry forces)
• Firms succeed by positioning themselves well in the industry
👉 Example:
Walmart competes on low cost because retail is highly competitive → strategy shaped by
industry pressure
Resource-Based View
• Focus: internal strengths (resources & capabilities)
• Firms succeed by using unique strengths competitors can’t copy
• 👉 Example:
Apple Inc. uses brand loyalty + innovation → advantage competitors struggle to replicate
2. What is globalization? Explain the three views on globalization.
,Globalization
• Integration of economies, markets, and cultures worldwide
👉 Example:
Nike designs in the U.S., manufactures in Asia, sells globally
• Hyperglobalizers: globalization is dominant
👉 Example: Global brands like Apple everywhere
• Skeptics: globalization is limited
👉 Example: Trade barriers between U.S. and China
• Transformationalists: globalization is changing the world but not replacing governments
👉 Example: Apple Inc. sells products worldwide (globalization), but
still must follow each country’s laws (like taxes, privacy rules,
and labor regulations).
3. What is FDI? What are horizontal and vertical FDI?
• Foreign Direct Investment (FDI): investing in business operations in another country
Horizontal FDI
• Same business in another country
• 👉 Example: McDonald's opening restaurants worldwide
Vertical FDI
• Different stages of production abroad
,👉 Example: Nike designs in U.S., manufactures in Vietnam
4. What is the OLI advantage? Explain, providing an example of each.
O – Ownership: firm-specific advantage
👉 Example: Apple’s brand
L – Location: benefit of a country
👉 Example: Low labor cost in Mexico
I – Internalization: keep control vs outsource
👉 Example: Company keeps production in-house for quality control
5. What are the three political views on FDI? (Explain)
• Radical view: FDI is harmful
👉 Example: Belief that foreign firms exploit workers
• Free market view: FDI benefits all
👉 Example: Foreign companies create jobs
• Pragmatic nationalism: balance pros/cons
👉 Example: Government allows FDI but regulates it
6. Carrier (HVAC company) decided to close its manufacturing plant in Ohio and move it to
Mexico.
a. Which country is the host, and which is the home?
• Home country: United States
• Host country: Mexico
b. What are the costs and benefits of FDI to the home country?
, • ❌ Job loss
• ✅ Lower production costs → cheaper goods
c. What are the costs and benefits of FDI to the host country?
• ✅ Job creation
• ✅ Economic growth
• ❌ Risk of low wages or exploitation
7. What is dumping, and what are anti-dumping duties?
• Dumping: selling products below cost in another country
👉 Example: A foreign steel company sells cheap steel in the U.S.
• Anti-dumping duties: tariffs to protect domestic firms
👉 Example: U.S. adds tax on imported steel
8. What is collusion, and what characteristics of a market make collusion difficult?
• Firms secretly agree on prices/output
👉 Example: Airlines agreeing to keep ticket prices high
What makes collusion difficult?
• Many competitors
• Hard to monitor cheating
• Price transparency
👉 Example: Gas stations may secretly undercut agreed prices
The following questions are developed as a study aid for C211 – Global Economics for Man-
agers. They cover important concepts in each competency. The questions are designed to serve
as an indicator of your preparedness to take the C211 assessment. You can use these to help you
take notes as you go through the chapters. You may also use them to reinforce your understand-
ing after covering the material.
Competency 1: Business Decision-Making in the Global Environment
Globalization (Peng Chapters 1, 5, 6, 11)
1. List and explain the two core perspectives for global business in detail with examples for
each.
Industry-Based View
• Focus: external environment (competition, industry forces)
• Firms succeed by positioning themselves well in the industry
👉 Example:
Walmart competes on low cost because retail is highly competitive → strategy shaped by
industry pressure
Resource-Based View
• Focus: internal strengths (resources & capabilities)
• Firms succeed by using unique strengths competitors can’t copy
• 👉 Example:
Apple Inc. uses brand loyalty + innovation → advantage competitors struggle to replicate
2. What is globalization? Explain the three views on globalization.
,Globalization
• Integration of economies, markets, and cultures worldwide
👉 Example:
Nike designs in the U.S., manufactures in Asia, sells globally
• Hyperglobalizers: globalization is dominant
👉 Example: Global brands like Apple everywhere
• Skeptics: globalization is limited
👉 Example: Trade barriers between U.S. and China
• Transformationalists: globalization is changing the world but not replacing governments
👉 Example: Apple Inc. sells products worldwide (globalization), but
still must follow each country’s laws (like taxes, privacy rules,
and labor regulations).
3. What is FDI? What are horizontal and vertical FDI?
• Foreign Direct Investment (FDI): investing in business operations in another country
Horizontal FDI
• Same business in another country
• 👉 Example: McDonald's opening restaurants worldwide
Vertical FDI
• Different stages of production abroad
,👉 Example: Nike designs in U.S., manufactures in Vietnam
4. What is the OLI advantage? Explain, providing an example of each.
O – Ownership: firm-specific advantage
👉 Example: Apple’s brand
L – Location: benefit of a country
👉 Example: Low labor cost in Mexico
I – Internalization: keep control vs outsource
👉 Example: Company keeps production in-house for quality control
5. What are the three political views on FDI? (Explain)
• Radical view: FDI is harmful
👉 Example: Belief that foreign firms exploit workers
• Free market view: FDI benefits all
👉 Example: Foreign companies create jobs
• Pragmatic nationalism: balance pros/cons
👉 Example: Government allows FDI but regulates it
6. Carrier (HVAC company) decided to close its manufacturing plant in Ohio and move it to
Mexico.
a. Which country is the host, and which is the home?
• Home country: United States
• Host country: Mexico
b. What are the costs and benefits of FDI to the home country?
, • ❌ Job loss
• ✅ Lower production costs → cheaper goods
c. What are the costs and benefits of FDI to the host country?
• ✅ Job creation
• ✅ Economic growth
• ❌ Risk of low wages or exploitation
7. What is dumping, and what are anti-dumping duties?
• Dumping: selling products below cost in another country
👉 Example: A foreign steel company sells cheap steel in the U.S.
• Anti-dumping duties: tariffs to protect domestic firms
👉 Example: U.S. adds tax on imported steel
8. What is collusion, and what characteristics of a market make collusion difficult?
• Firms secretly agree on prices/output
👉 Example: Airlines agreeing to keep ticket prices high
What makes collusion difficult?
• Many competitors
• Hard to monitor cheating
• Price transparency
👉 Example: Gas stations may secretly undercut agreed prices
