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Chapter 3—Emphasizing Informal Institutions: Cultures, Ethics, and Norms TRUE/FALSE 1. In situations where formal institutions are unclear or fail, informal institutions play a more important role in reducing uncertainty. ANS: T OBJ: 3.1 2. ANS: F OBJ: 3.1 PTS: 1 DIF: Easy REF: p. 62 NAT: AACSB: Tier 1 Communication; Tier 2 Environmental Influence Informal institutions are based on the rules and legal systems of an economy. PTS: 1 DIF: Easy REF: p. 63 NAT: AACSB: Tier 1 Communication; Tier 2 Legal Responsibilities

3. Ethnocentrism is the quality of a society that perceives its own culture, ethics, and norms as natural, rational, and morally right. ANS: T OBJ: 3.1 4. ANS: F OBJ: 3.1 5. ANS: F OBJ: 3.1 6. ANS: T OBJ: 3.1 PTS: 1 DIF: Easy REF: p. 63 NAT: AACSB: Tier 1 Diversity; Tier 2 Group Dynamics It is most accurate to apply a specific culture to each country. PTS: 1 DIF: Moderate REF: p. 63 NAT: AACSB: Tier 1 Diversity; Tier 2 Environmental Influence English is the largest language in terms of native speakers. PTS: 1 DIF: Difficult REF: p. 65 NAT: AACSB: Tier 1 Diversity; Tier 2 Environmental Influence Religion is a major manifestation of culture. PTS: 1 DIF: Difficult REF: p. 67 NAT: AACSB: Tier 1 Diversity; Tier 2 Environmental Influence

7. Social mobility refers to the degree to which people can move from one area to another area in a country. ANS: F OBJ: 3.1 PTS: 1 DIF: Difficult REF: p. 67 NAT: AACSB: Tier 1 Diversity; Tier 2 Environmental Influence

8. Social stratification is the hierarchical arrangement of individuals into social categories such as classes, castes, or divisions within a society. ANS: T OBJ: 3.1 PTS: 1 DIF: Difficult REF: p. 67 NAT: AACSB: Tier 1 Diversity; Tier 2 Environmental Influence

9. Social structure is the outcome of a society's informal rules of the game that, in turn, give birth to formal regulations. ANS: F OBJ: 3.1 10. PTS: 1 DIF: Difficult REF: p. 67 NAT: AACSB: Tier 1 Diversity; Tier 2 Environmental Influence Multinational enterprises (MNEs) operating in highly socially stratified countries need

to be sensitive to local hiring and staffing norms. ANS: T OBJ: 3.1 PTS: 1 DIF: Difficult REF: p. 68 NAT: AACSB: Tier 1 Diversity; Tier 2 Environmental Influence

11. In a low-context culture, communication relies a lot on the underlying, unspoken context as much as on the actual spoken words. ANS: F OBJ: 3.2 PTS: 1 DIF: Moderate REF: p. 69 NAT: AACSB: Tier 1 Diversity; Tier 2 Strategy

12. In high-context cultures, communication is usually taken at face value without much reliance on unspoken context. ANS: F OBJ: 3.2 PTS: 1 DIF: Moderate REF: p. 69 NAT: AACSB: Tier 1 Diversity; Tier 2 Strategy

13. Legal contracts in England are traditionally longer than contracts in China because England is a low-context culture. ANS: T OBJ: 3.2 PTS: 1 DIF: Moderate REF: p. 69 NAT: AACSB: Tier 1 Communication; Tier 2 Legal Responsibilities

14. Context is important because failure to understand the differences in interaction styles may lead to misunderstanding. ANS: T OBJ: 3.2 PTS: 1 DIF: Moderate REF: p. 69 NAT: AACSB: Tier 1 Communication; Tier 2 Legal Responsibilities

15. According to the Huntington set of clusters, a class is the highest cultural grouping of people and the broadest level of cultural identity people have. ANS: F OBJ: 3.2 PTS: 1 DIF: Moderate REF: p. 62 NAT: AACSB: Tier 1 Diversity; Tier 2 Strategy

16. The basis behind the cluster approach is that firms are more comfortable doing business with other firms in their same cluster. ANS: T OBJ: 3.2 PTS: 1 DIF: Easy REF: p. 71 NAT: AACSB: Tier 1 Diversity; Tier 2 Strategy

17. If the richest 10% of a country's population controls 22% of the national income, this is an example of relatively high power distance. ANS: F OBJ: 3.2 PTS: 1 DIF: Difficult REF: p. 71 NAT: AACSB: Tier 1 Analytic; Tier 2 Environmental Influence

18. If a boss regularly takes his employees out for a casual lunch, this is an example of low...
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