Which of the following is the quickest and cheapest way to develop a global strategy?
A. Fully-owned subsidiaries
B. Greenfield investments
C. Strategic alliances
Question 2 of 40
Offshoring provides the company with access to foreign markets while avoiding:
A. relocation of the company to other countries.
B. competition between companies in the global market.
C. trade risks.
D. trade barriers.
Question 3 of 40
Meryl Software Inc., an American MNC wishing total control of its operations, wants to acquire an existing firm, Graphiti Animations, in Canada. If acquired, Graphiti Animations would be a:
A. fully-owned subsidiary.
B. holding company.
C. greenfield investment.
D. shell corporation.
Question 4 of 40
The first broad scan of all potential world markets should result in the firm being able to:
A. identify the strengths and weaknesses of its competitors.
B. eliminate markets with unreasonable entry conditions.
C. determine the best sources for raw materials.
D. eliminate countries with high cultural risk.
Question 5 of 40
Which of the following is a way in which formal institutions affect international competition?
A. Decreasing trade restrictions
B. Enforcing organizational laws
C. Enforcing antidumping laws
D. Enforcing strict exit barriers
Question 6 of 40
A(n) __________ analysis determines which areas of a firm’s operations represent strengths or weaknesses (currently or potentially) compared to competitors.
Question 7 of 40
Which of the following strategies would a non-European company most likely use if it wanted to gain quick entry inside the European community?
A. International joint venture
B. Greenfield investment
C. Turnkey operation
Question 8 of 40
Which of the following is the most likely result of regulations and restrictions enforced by a firm’s home government that prove to be expensive for the firm’s operations?
A. The firm searches for less restrictive operating environments overseas
B. The firm responds to customers’ demands more promptly
C. The firm becomes entangled in lengthy litigation
D. The firm expands its domestic operations
Question 9 of 40
Which of the following is a global risk with regard to strategic entry scanning?
A. Economic and fiscal policies
C. Economic and financial risk
D. Trade restrictions
Question 10 of 40
Which of the following is the most common reactive reason for a firm to extend its operations overseas?
A. Tax incentives
B. Economies of scale
C. Globalization of competitors
D. Resource access and cost savings
Question 11 of 40
The primary motive in the contract manufacturing strategy is:
A. utilizing inexpensive overseas labor.
B. obtaining rights to patented technology.
C. sharing managerial expertise.
D. sharing financial resources.
Question 12 of 40
Futura-Core Technologies, an electronics manufacturing firm, has advantages in financial capability and sustainability, but a disadvantage in speed of innovation. It is also at a disadvantage relative to Core-Dynamix Technologies, another electronics manufacturing firm, in important factors such as manufacturing capability and adaptability to market conditions. Which of the following terms best describes Futura-Core’s abilities in comparison to Core-Dynamix?
A. Comparative advantage
B. Collective bargaining
C. Competitive advantage
D. Absolute advantage
Question 13 of 40
At which three levels should firms ideally perform global environmental analysis?
A. Product, domestic market, and consumer
B. Multinational, regional, and local
C. Operational, tactical, and top management
D. Innovation, production, and local distribution
Question 14 of 40
Restrictive trade barriers most likely influence the globalization of businesses by encouraging firms to:
A. develop joint ventures with local firms.
B. import supplies from foreign vendors.
C. expand the exportation of raw materials.
D. switch from exporting to overseas manufacturing.
Question 15 of 40
Which of the following terms refers to the basic means by which a company competes?
Question 16 of 40
Which of the following is a national risk with regard to strategic entry scanning?
A. Energy availability and prices
B. Regional instability
C. Legal protection
D. Political turmoil
Question 17 of 40
Which of the following entry strategies is most likely to serve as a short-term strategy and to provide limited income?
A. Joint venture
B. Management contract
D. Fully owned subsidiary
Question 18 of 40
Which of the following charts the direction of the company and provides a basis for strategic decision making?
A. Environmental assessment
B. Corporate structure
C. Organizational mission
D. SWOT analysis
Question 19 of 40
Which of the following statements is true of clustering?
A. It uses different suppliers and distribution channels for interdependent companies within an industry.
B. It helps a firm gain an increase in efficiencies.
C. It seldom uses specialized labor.
D. It typically increases the costs of production and distribution.
Question 20 of 40
Due to the high demand for its handmade soaps in Canada, Fragrance Exotica, an Indian Soap manufacturer, has decided to open a new manufacturing unit in Canada, thereby expanding overseas. In this scenario, which of the following reasons prompted Fragrance Exotica to set up a manufacturing unit overseas?
A. Trade barriers
B. Manufacturer demands
C. Customer demands
D. Tax incentives
Part 2 of 2 –
Question 21 of 40
The degree to which headquarters’ practices and goals are transferable most likely depends on whether:
A. top managers are from the head office, the host country, or a third country.
B. the organization is product- or service-oriented.
C. financial performance reports show a positive trend in growth over the past several years.
D. the production system is standardized.
Question 22 of 40
Sedona Inc. is an American firm that manufactures high-quality handbags,
duffel bags, and leather belts at its facility in Arizona. Sedona’s
products have been featured in various fashion magazines, and as a
result, consumer demand has increased significantly. Currently, Sedona
is organized as a domestic structure plus export department. Executives
at Sedona believe the firm is ready to internationalize its operations,
and they are considering various organizational structures.
Which of the
following best supports the argument that Sedona should give its
subsidiary managers significant autonomy?
A. Praxis Inc., one of Sedona’s domestic competitors, has a flat
B. Sedona is a family-owned business that began as a subsidiary to Aloha enterprises.
C. Sedona has recently reorganized into a domestic structure plus foreign subsidiary.
D. Sedona conducts a large percentage of domestic sales through the
Question 23 of 40
All of the following are cooperative aspects of strategic alliances EXCEPT:
A. creating economies of scale in tangible assets.
B. forming upstream–downstream divisions of labor.
C. limiting investment risks through shared resources.
D. learning new intangible skills from alliance partners.
Question 24 of 40
Which of the following forms of organization is particularly appropriate in a dynamic and diverse environment?
A. The global functional structure
B. The global product structure
C. The domestic structure plus export department
D. The domestic structure plus foreign subsidiary
Question 25 of 40
In order to minimize potential problems in alliances, companies should most likely choose partners with:
A. competitively sensitive technology.
B. complementary products and skills.
C. significant control of the target market.
D. superior bargaining power in the same industry.
Question 26 of 40
The need for knowledge management in IJVs primarily stems from: Answer: B
A. employee concerns regarding job security and benefits.
B. cultural and system differences between partners.
C. local government regulations and restrictions.
D. proprietary information legalities.
Question 27 of 40
Which of the following types of alliances can be formed between a company and a foreign government?
A. International joint venture
B. Equity strategic alliance
C. Non-equity strategic alliance
D. Global strategic alliance
Question 28 of 40
Usually, smaller firms start their international involvement by:
C. entering into a full-blown global joint venture.
D. using foreign direct investment.
Question 29 of 40
Barton & Green is an MNC based in the U.S. that makes a wide range of software development products. Executives at the firm are considering the idea of outsourcing the company’s IT infrastructure. Which of the following questions is the most relevant to Barton & Green’s decision to outsource its IT infrastructure to TMC Enterprises, a firm in India?
A. Which type of operating system is primarily used by TMC Enterprises?
B. What is the attitude of U.S. consumers about TMC Enterprises?
C. What is the financial health of TMC Enterprises?
D. Which other firms have outsourced their processes to TMC Enterprises?
Question 30 of 40
Which of the following indicates a need for change in organizational design?
A. Low turnover
B. A decrease in overseas customer complaints
C. Seamless innovation
D. New management with different goals and strategies
Question 31 of 40
Which of the following is true with regard to information systems in less-developed countries?
A. In less-developed countries, the sources of reliable data for decision making is relatively high in number.
B. The accuracy and timeliness of information systems are often less than perfect in less-developed countries.
C. In less-developed countries, the sources of reliable data for decision making are easy to locate.
D. Government information in less-developed countries is rarely fabricated, so it is considered to be the most reliable source of information for headquarters’ managers.
Question 32 of 40
Which of the following is true with regard to direct coordinating mechanisms?
A. Expatriates from “headquarters” do not exert control over the foreign affiliate through the expectations of the national and corporate culture of the parent company.
B. Even in situations where parent control is considered less important, delegating the control to the local level is ritually avoided.
C. Direct coordinating mechanisms that provide the basis for the overall guidance and management of foreign operations include the design of appropriate organizational structures and the use of effective staffing practices.
D. Direct coordinating mechanisms do not include staffing practices.
Question 33 of 40
SoftCorp and TechGig, upcoming software companies in San Diego, have decided to create a new and independent telecommunications company, ST-source. Each parent firm has agreed to have 50 percent equity in the new company. This is an example of a(n):
D. joint venture.
Question 34 of 40
In spite of the potential problems with local partners, many firms rush the process of partner selection because they:
A. want to reduce the amount spent on establishing subsidiaries abroad
B. want to take advantage of the local partner’s technological innovations.
C. mostly aim at increasing the number of equity shares within a short period of time.
D. are anxious to get into an attractive market.
Question 35 of 40
Managers choose the manufacturing location for each product based on where the best combination of cost, quality, and technology can be attained in order to achieve:
A. customer loyalty.
Question 36 of 40
Overlooking cultural differences in cross-border alliances can create a negative impact when target country:
A. has similar views on organizational formality.
B. and host country equally participate in decision making.
C. is technologically superior to the host country.
D. has conflicting practices and systems.
Question 37 of 40
Papillion Inc. is a small American high-technology firm that has been successfully competing in the international business arena from its inception two years ago. Instead of internationalizing slowly, Papillion embarked upon an ambitious plan to leverage niche market opportunities worldwide—right from the beginning. Papillion Inc. exemplifies the __________ phenomenon.
Question 38 of 40
According to the __________ model, as the company becomes larger, more complex, and more sophisticated in its approach to world markets, it may evolve into a transnational corporation.
A. four stages of contribution
D. evolutionary stages
Question 39 of 40
Nimbus Inc. is a hybrid organization. The organizational structure of
the company has been developed to combine geographic support for both
global integration and local responsiveness. Nimbus is not a
hierarchical organization and uses cross-functional teams to quickly
adapt to the dynamic business environment.
If the above information is
true, which of the following can be fittingly inferred?
A. Nimbus has only a few SBUs.
B. Nimbus has a matrix structure.
C. Nimbus is a born global.
D. Nimbus does not favor standardization of its products.
Question 40 of 40
Which of the following primarily determines the extent of control exercised over an IJV by its parent company?
A. Staffing choices for top IJV positions
B. Policies of the smaller firm
C. Cultural background
D. IJV industry