Reference no: EM131151202

Question 1: For an MNE to exist, first foreign countries must provide location-specific advantages to attract the company to invest there, second the company must have ownership-specific advantages that counteract its liability of foreignness, third the company must have the organizational capability to leverage its strategic advantages more effectively internally than externally.
True
False

Question 2: An MNE with an 'international perspective' will typically be managed as a coordinated federation.
True
False

Question 3: An MNE with a 'multinational perspective' will typically be managed as a coordinated federation.
True
False

Question 4: An MNE with a 'global perspective' will typically manage its operations centrally.
True
False

Question 5: An MNE with a 'transnational perspective' will typically be managed as an integrated network.
True
False

Question 6: Emerging motivations for internationalization include the desire to enhance the firm's competitive position and the desire to develop global scanning capabilities.
True
False

Question 7: Which of the following correctly describes the sequential evolution in management thinking with respect to the strategic role of foreign operations in emerging MNEs?
a. global mentality, multinational mentality, international mentality, transnational mentality.
b. international mentality, global mentality, transnational mentality, multinational mentality.
c. multinational mentality, global mentality, international mentality, transnational mentality.
d. international mentality, multinational mentality, global mentality, transnational mentality.
e. all of the above

Question 8: An MNE is a(n):
a. import-export company that actively trades in foreign markets.
b. company that passively manages its substantial foreign direct investment.
c. import-export company that actively manages its foreign investment portfolio.
d. company that actively manages substantial foreign direct investment.
e. All of the above

Question 9: Which of the following constitutes a list of foreign entry modes that involve the MNE to make a foreign investment?
a. Greenfield, acquisition, joint venture and capital participation
b. Greenfield, acquisition, joint venture and license
c. Franchising, acquisition, joint venture and capital participation
d. Greenfield, acquisition, cooperation agreements and capital participation
e. none of the above

Question 10: One motivation behind internationalization is to sustain the firm's competitive position. To pursue a sustainable competitive position relative to its rivals in the athletic clothing industry, Nike attempts to:
a. preempt markets, capture global scale, and secure raw materials
b. capture global scale, access scarce knowledge, and match competitors
c. match competitors, capture global scale, and preempt markets
d. exploit factor cost differences, preempt markets, and match competitors
e. all of the above

Question 11: _________ suggests that in the first stage innovations are produced in the home developed country; in the second stage they are exported to other similarly developed countries; in the third stage, they start being produced in these developed countries; in the fourth stage they start being produced in low-wage developing countries.
a. Vernon's product cycle theory
b. Johanson and Vahlne's stages theory
c. Dunning's eclectic theory
d. Levitt's globalization theory
e. none of the above

Question 12: A franchise, such as McDonald's, is a _________ mode of foreign entry.
a. low commitment, low control
b. low commitment, moderate control
c. low commitment, high control
d. moderate commitment, moderate control
e. none of the above

Question 13: A joint venture is a _________ mode of foreign entry.
a. low commitment, low control
b. low commitment, moderate control
c. low commitment, high control
d. moderate commitment, moderate control
e. none of the above

Question 14: Three prerequisites that must be satisfied before a national firm can transform itself into a multinational firm include:
a. scale-based advantages, ownership-specific advantages and contractual capabilities.
b. location-specific advantages, ownership-specific advantages and organizational capabilities.
c. scale-based advantages, ownership-specific advantages and organizational capabilities.
d. location-specific advantages, knowledge advantages and organizational capabilities.

Question 15: Pashpa Co. is a new manufacturer of home appliances. Pashpa wants to go international. Some of the traditional motivations for pursuing internationalization include:
a. securing key supplies, seeking new markets, and raising global scanning and learning capabilities
b. securing key supplies, seeking new markets, and improving competitive positioning
c. securing key supplies, seeking new markets and accessing low-cost factors of production
d. securing key supplies, improving competitive positioning, and accessing low-cost factors of production
All of the above

Question 16: The search for global competitiveness is the major source of conflict between MNEs and host governments.
True
False

Question 17: Worldwide innovation and learning forces that are encountered by MNEs are driven by factor costs.
True
False

Question 18: In the emerging international environment, most industries can be categorized as multinational, global or international.
True
False

Question 19: A multinational industry is characterized by low national responsiveness and high global integration.
True
False

Question 20: An international industry is characterized by low national responsiveness and moderate global integration.
True
False

Question 21: The three conflicting environmental forces that MNEs encounter are cross-border integration and coordination, national differentiation and responsiveness, and worldwide innovation and learning.
True
False

Question 22: What are the main forces that drive MNEs such as Nokia, the mobile communications company, to innovate and learn on a global scale?
a. Economic and political forces.
b. Political and social forces.
c. Social and informational forces.
d. Technological and informational forces.
e. none of the above

Question 23: A transnational industry is characterized by _____________.
a. low national responsiveness and low global integration
b. low national responsiveness and high global integration
c. high national responsiveness and low global integration
d. high national responsiveness and high global integration
e. none of the above

Question 24: In a transnational industry, MNEs are expected to
a. collaborate with their competitors to increase the prices of their products.
b. build the capability to learn from the many environments in which they operate.
c. acquire their competitors to increase their pool of resources.
d. decentralize decisions to better respond to local demands.
e. none of the above

Question 25: Philips, a multinational electronics corporation based in the Netherlands and diversified in the consumer electronics, domestic appliance, lighting, medical systems and medical technology industries would encounter the following forces of local responsiveness:
a. Cultural differences, government demands and economies of scope
b. Cultural differences, government demands and factor costs
c. Cultural differences, government demands and local competitors
d. Cultural differences, government demands and increasingly liberalized trade environments
e. none of the above

Question 26: What are the main forces that motivate MNEs such as Dell Computers to disaggregate their operations and activities to respond to national, regional and local needs and demands?
a. Social and economic forces.
b. Social and political forces.
c. Political and economic forces.
d. Economic and psychological forces.
e. None of the above

Question 27: The pressures that drive book publishers such as McGraw-Hill to integrate and coordinate their activities across national boundaries are primarily _________.
a. economic
b. political
c. social
d. organizational
e. all of the above

Question 28: An industry that is characterized by low national responsiveness and high global integration is a(n)
a. multinational industry.
b. global industry.
c. international industry.
d. transnational industry.
e. none of the above

Question 29: Which global integration and coordination forces would MNEs, such as Hewlett Packard, encounter?
a. Economies of scale, increasingly liberalized trade environments and government demands
b. Economies of scope, factor costs and increasingly liberalized trade environments
c. Economies of scale, expanding spiral of globalization and local competitors
d. Economies of scale, economies of scope and government demands
e. none of the above

Question 30: An industry that is characterized by moderate national responsiveness and moderate global integration is a(n)
a. international industry.
b. global industry.
c. transnational industry.
d. multinational industry.
e. multinational industry.

Question 31: The diversity of environments in which the MNE operates enables the firm to develop diverse capabilities and experience multiple learning opportunities.
True
False

Question 32: An MNE can maximize each of the following objectives independently - global scale efficiency, multinational flexibility and innovation development.
True
False

Question 33: Cost reductions due to scale-economies are static and constant over time and few dynamic benefits are associated with scale economies.
True
False

Question 34: Companies using multinational strategies are characterized by asset and capability configurations that are dispersed, interdependent and specialized.
True
False

Question 35: In addition to capturing cost advantages due to national differences in factor endowments, an MNE can also exploit markets by responding to customer needs and commanding higher prices.
True
False

Question 36: Since efficiency, flexibility and learning are conflicting goals, a transnational company should focus on only one of these goals and try to exploit it through the three sources of worldwide competitive advantage - national differences in both input and output markets, scale economies and scope economies.
True
False

Question 37: In order to secure worldwide competitive advantage, a multinational firm should pursue all of the following objectives, except:
a. the development of global-scale efficiencies.
b. the development of multinational flexibility.
c. the ability to develop innovation.
d. maximizing market share in all subsidiaries simultaneously.
e. Such a firm should pursue all of the above objectives

Question 38: Which of the following is not a benefit associated with higher production volumes?
a. exploiting scale economies.
b. enhancing innovation.
c. accumulating learning.
d. taking advantage of the learning curve effect to further reduce production costs.
e. All of the above are such benefits

Question 39: Which of the following describes the strategic orientation of a multinational company?
a. focused on developing global efficiency, flexibility and worldwide learning capability simultaneously.
b. focused on exploiting parent company knowledge and capabilities through worldwide diffusion and adaptation.
c. focused on building cost advantages through centralized, global scale operations.
d. focused on building flexibility to respond to national differences through strong, resourceful and entrepreneurial national operations.
e. none of the above

Question 40: Which of the following describes the strategic orientation of a transnational company?
a. focused on building flexibility to respond to national differences through strong, resourceful and entrepreneurial national operations.
b. focused on developing global efficiency, flexibility and worldwide learning capability simultaneously.
c. focused on building cost advantages through centralized, global scale operations.
d. focused on exploiting parent company knowledge and capabilities through worldwide diffusion and adaptation.
e. all of the above

Question 41: At the annual meeting of the board of directors of LabZaws Co., James Wilson, the CEO of the company, was directed to focus primarily on enhancing the firm's efficiency. How could he achieve this objective?
a. focus on cost reduction alone.
b. focus on revenue enhancement alone.
c. focus on both cost reduction and revenue enhancement.
d. downsize and outsource many of the firm's activities.
e. none of the above

Question 42: Lindux Co., intends to enhance its competitive advantage by exploiting the national differences that prevail in the countries that host its subsidiaries. Which of the following is consistent with this intention?
a. moving the manufacture of labor-intensive components to Vietnam in order to capitalize on the lower cost labor found in Vietnam.
b. hiring local managers for its foreign subsidiaries rather than employing expatriates.
c. centralizing the company's R&D activities in the home country for reasons of strategic security.
d. using a common distribution channel for multiple products.
e. all of the above

Question 43: Which of the following best describes an international company's asset and capability configuration?
a. assets and capabilities are decentralized and nationally self-sufficient.
b. assets and capabilities are centralized and globally scaled.
c. assets and capabilities are dispersed, interdependent and specialized.
d. sources of core competences are centralized, while other assets and capabilities are decentralized.
e. none of the above

Question 44: Which of the following best describes a global company's asset and capability configuration?
a. assets and capabilities are centralized and globally scaled.
b. core competences are centralized, while other assets and capabilities are decentralized.
c. assets and capabilities are dispersed, interdependent and specialized.
d. assets and capabilities are decentralized and nationally self-sufficient.
e. none of the above

Question 45: Which of the following best describes scope economies?
a. cost advantage resulting from production, development or distribution in more than one country.
b. cost advantage resulting from large volume production, development or distribution.
c. cost advantage resulting from the joint production, development or distribution of more than one product.
d. cost advantage resulting from the production, development or distribution of very high quality products.
e. none of the above

Question 46: In a transnational organization, knowledge is developed at the headquarters and transferred to foreign units.
True
False

Question 47: The key strategic capability associated with the coordinated federation organizational model is global-scale efficiency.
True
False

Question 48: In a transnational organization, the asset and capability configuration can be described as dispersed, specialized and interdependent.
True
False

Question 49: Summit Corp. is transitioning from a multinational strategy to a transnational strategy. It would probably be more effective and less costly if the company commenced its accompanying organizational transition by focusing on changing employees' attitudes and mentalities, than it would be if it led its efforts by engaging in structural change.
True
False

Question 50: In the transnational organization, capable managers situated in the national subsidiaries act as the primary source for sensing and analysing worldwide opportunities and threats.
True
False

Question 51: Companies that pursue a multinational strategy are inclined to adopt the decentralized federation organizational model.
True
False

Question 52: MNEs that adopted a centralized hub organizational model were able to develop competitive advantage through their ability to transfer knowledge and expertise and adapt it to markets worldwide.
True
False

Question 53: Which of the following strategy-structure pairs cannot be associated?
a. Coordinated federation and multinational strategy.
b. Centralized hub and global strategy.
c. Decentralized federation and multinational strategy.
d. Integrated network and transnational strategy.
e. All of the above such pairs can be associated.

Question 54: Isatis Co. has successfully transitioned from a global strategy to a transnational strategy. Which of the following describes the likely configuration of assets and capabilities that now most likely prevails at Isatis?
a. Decentralized and nationally self-sufficient.
b. Centralized and globally scaled.
c. Dispersed, specialized, and interdependent.
d. Core competencies are centralized; other assets and capabilities are decentralized.
e. None of the above.

Question 55: Which of the following is not a core characteristic of the decentralized federation structure?
a. Most key assets and resources are decentralized.
b. Subsidiaries are highly autonomous.
c. Corporate management regards subsidiaries as largely independent national operations.
d. Reporting and oversight conflicts prevail.
e. All of the above are core characteristics of such a structure

Question 56: Which of the following describes the preferred sequencing of changes associated with implementing the typically more effective emerging change process model?
a. Change in individual attitudes and mentalities; then, change in interpersonal relationships and processes; and finally, change in the formal structure and responsibilities
b. Change in the formal structure and responsibilities; then, change in interpersonal relationships and processes; and finally, change in individual attitudes and mentalities
c. Change in interpersonal relationships and processes; then, change in the formal structure and responsibilities; and finally, change in individual attitudes and mentalities.
d. Change in individual attitudes and mentalities; then, change in the formal structure and responsibilities; and finally, change in interpersonal relationships and processes.
e. None of the above

Question 57: Which of the following is not a core characteristic of the coordinated federation structure?
a. Most assets and resources are decentralized but well controlled by the headquarters.
b. Subsidiaries are regarded as key sources of knowledge and expertise.
c. Subsidiary control exercised by the headquarters is usually quite formal and rigorous.
d. Corporate managers tend to regard offshore subsidiaries as extensions of domestic operations.
e. All of the above are core characteristics of such a structure

Question 58: Which of the following is not a characteristic of a transnational strategy?
a. Multiple diverse perspectives are developed and legitimized.
b. Physical assets and management capabilities are internationally distributed, yet c. interdependent.
c. Integrative processes are flexible and robust.
d. Knowledge is developed centrally and adapted locally.
e. All of the above are characteristics of such a strategy

Question 59: Which of the following is not a characteristic of the centralized hub structure?
a. Most of the key assets and resources are concentrated in the home country.
b. Tight strategic and operational controls are maintained over the subsidiaries.
c. Most of the manufacturing and product development is executed by the subsidiaries.
d. Corporate management regards its subsidiaries as delivery pipelines to the global market.
e. All of the above are characteristics of such a structure

Question 60: Which of the following statements regarding knowledge diffusion is correct?
a. In a decentralized federation, knowledge is developed in national subsidiaries and diffused throughout the organization
b. In a centralized hub, knowledge is developed and retained at the center.
c. In a coordinated federation, knowledge is developed and retained within each unit.
d. Knowledge diffusion is independent of structure, such that knowledge diffuses in a quite similar manner in all organizational structures.
e. All of the above.

Question 61: Cool-Colas Ltd. is a national beverage manufacturer situated in India. During the past few years, the company has suffered intense competition from major multinationals such as Coca Cola, Nestlé and Pepsi. What can Cool-Colas do to protect its domestic market?

Question 62: What is the key lesson behind the metaphor that develops an organizational change model based on a framework related to anatomy, physiology, and psychology?