Globalization Test Questions

Chapter 1 Expanding abroad Motivations, means, and mentalities confessedly/False1. The largest MNEs ar equivalent in their sparing importance to less developed economies such as Tanzania, Estonia or Sri Lanka. cause False (Sales of the largest MNEs exceed the GDPs of less developed countries. ) problem Easy rapsc altogetherion 4 and Table 1-1 on page 3 motif MNE place setting and influence2. The edge of areawideization followed by most tightens is usually well-thought step up in advance and typically builds on a combination of sharp-witted analysis, planning and implementation. say False (It is more(prenominal) likely a combination of quick-scented analysis, opportunism, and luck. In examines to opportunism, several studies have found that most firms begin exporting due to an unsolicited export order. ) problem contribute paginate 9 subject area Inter guinea pigization process3. A articulate venture is a contractual mode of unlike entry involving a high take aim of pick commitment by all partners. dish up False (A JV lead non typically require as high a preference commitment as we would see in entirely owned subsidiaries. In addition, there is significant variability in the level of resources contributed by partners. ) impediment castigate Page 10 Topic everywhereseas entry mode4. rising motivations for internationalization include the desire to enhance the firms competitory personate and the desire to develop globose scanning capabilities. act True trouble Easy Page 6-7 and ppt fall away 1-6 Topic Motivations for internationalization5. For an MNE to exist, first opposed countries moldiness(prenominal)iness provide location-specific advantages to attract the smart set to invest there, second the company must have ownership-specific advantages that counteract its liability of contraryness, third the company must have the organizational capability to leverage its strategical advantages more effectively intern ally than externally. Answer True hindrance enclose Page 7-8 Topic Prerequisites for internationalization6. An MNE with a multinational perspective exit typically be managed as a coordinated federation. Answer False (It lead typically be managed as a decentralized federation. ) difficulty Moderate Page 11-12 and ppt slide 1-13 Topic The evolving learning ability international to transnational7. An MNE with a world(prenominal) perspective will typically manage its operations centrally. Answer True Difficulty Moderate Page 12-13 and ppt slide 1-13 Topic The evolving mentality international to transnational8. An MNE with a transnational perspective will typically be managed as an coordinated network. Answer True Difficulty Moderate Page 13-14 and ppt slide 1-13 Topic The evolving mentality international to transnationalMultiple Choice9. Which of the following correctly nominates the sequential evolution in worry thinking with respect to the strategic component of foreign o perations in emergent MNEs? a. orbicular 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.Answer d (a, b, and c be defective because, although they describe the different ways of caution thinking regarding the strategic role of foreign operations in emerging MNEs, they do not describe the evolution of this thinking in the correct sequence. ) Difficulty Moderate Page 11-14 Topic Evolving mentality toward strategic role of foreign operations10. A franchise, such as McDonalds, is a _________ mode of foreign entry. a. low commitment, low gibe b. low commitment, see to it manoeuver c. low commitment, high manoeuver d. mark commitment, moderate controlAnswer b (a, c, and d would describe indirect export, contract manufacturing, and joint venture foreign modes of entry respectively. ) Difficulty Moderate Page 10 (figure 1-2) Topic Foreign entry mode11. 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 Answer d (a, b, and c would describe indirect export, franchise, and contract manufacturing foreign modes of entry respectively. ) Difficulty Moderate Page 10 (figure 1-2)Topic Foreign entry mode12. Pashpa Co. is a modern manufacturer of home appliances. Pashpa wants to go international. Some of the handed-down motivations for pursuing internationalization include a. securing key supplies, seeking new marketplaces, and facts of life global scanning and learning capabilities b. securing key supplies, seeking new markets, and up competitory positioning c. securing key supplies, seeking new markets and accessing low- appeal factors of work d. securing key supplies, improving competitive positioning, and accessing low-cost factors of mathematical wareionAnswer c (a, b, and d are incorrect because raising global scanning and learning capabilities and improving competitive positioning are not traditional motivations for pursuing internationalization, they are emerging motivations. ) Difficulty Moderate Page 4-6 Topic Motivations for internationalization13. One motivation hind end internationalization is to sustain the firms competitive position. To pursue a sustainable competitive position relative to its rivals in the athletic attire industry, Nike attempts to a. reempt markets, capture global exfoliation, 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 Answer c (a, b, and d are incorrec t because securing raw materials, accessing scarce knowledge, and exploiting factor cost differences may give a company a temporary competitive advantage but not a sustainable competitive advantage. ) Difficulty Hard Page 4-7Topic Motivations for internationalization14. _________ suggests that in the first stage innovations are produced in the home developed bucolic 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 quaternaryth stage they start being produced in low-wage developing countries. a. Vernons increase cycle possible action b. Johanson and Vahlnes stages theory c. Dunnings eclectic theory d. Levitts globalization theory Answer a Difficulty Moderate Page 5-6, 8 Topic Motivations for internationalization15. Which of the following constitutes a list of foreign entry modes that involve the MNE to own a foreign enthronement a. Greenfield, acquisition, joint vent ure and capital interlocking b. Greenfield, acquisition, joint venture and license c. Franchising, acquisition, joint venture and capital date d. Greenfield, acquisition, cooperation agreements and capital participation Answer a (Licensing, franchising, and many forms of cooperation may not entail an MNE making an investment. Difficulty Easy Page 9-10 Topic Foreign entry modes16. OfficeWare Corp. is an MNE that produces and sells office equipment. If the companys CEO make use ofs a global mentality toward the strategic role of the companys foreign operations, thence we would expect that OfficeWare a. regards its overseas markets as a portfolio of local opportunities. b. leverages its domestic capabilities worldwide. c. regards the world as a single unit of analysis. d. simultaneously responds to local needs, global demands and cross-border learning opportunities.Answer c (a, b, and d would represent multinational, international, and transnational mentalities respectively. ) Diffi culty Moderate Page 11-14 Topic The evolving mentality international to transnational Essay17. The CEO of angel Ltd. wants to take his company international. What are the three big questions he must answer before expanding abroad? Answer The three questions this CEO must answer before expanding abroad are a. What market opportunities, sourcing advantages or strategic imperatives will drive the companys international expansion? . How will the company expand its foreign presence through exports, licensing, joint ventures, wholly owned subsidiaries or some(a) other means? c. How will the attitudes, assumptions and beliefs of paragons employees impact the probability of the company succeeding in its efforts to command? Difficulty Moderate Page 1 (box insert) Topic Internationalization18. Rana manages an Italian fashion design company. What would motivate Ranas company to internationalise? Answer i) Traditional motivations might include securing key supplies, seeking new markets and accessing low-cost factors of fruit (e. g. labor, capital, etc. ) (ii) Emerging motivations might include change magnitude scale economies to offset significant R&D investments, shortening product life cycles, improving a companys competitive position and enhancing a companys global scanning and learning capabilities. Difficulty Easy Page 4-7 Topic Motivations behind internationalization19. Briefly explain the product cycle of personal computers using Raymond Vernons product cycle theory. AnswerThis theory suggests that early in a products life-cycle, all the parts and labor needed to manufacture the product will be sourced from the locale in which the product was invented. As the product is increasingly adopt and distributed in global markets, production gradually shifts away from the point of origin. In some cases, the product ultimately becomes a good that is imported into the country in which it was originally invented. For example, in the case of personal computers, during t he new product stage, the computer was produced and purchased by consumers in the United States and little export betray occurred.During the maturing product stage, mass-production techniques were developed and foreign demand (in developed countries) expanded. At this point, the U. S. began to export the product to other developed countries. In the standardized product stage, production moved to developing countries, which then export the product to developed countries. Difficulty Moderate Page 5-6 Topic Product cycle theory20. Briefly canvas and contrast the Uppsala Internationalization Model and the Born world(a) Model. Under what fate is each model most applicable?Give examples to support your arguments. Answer According to the Uppsala Model, companies internationalize in an incremental fashion. Typically, they start by utilizing foreign entry modes that require low levels of resource commitment and low levels of control over foreign activities (e. g. exporting). The model con ceptualizes subsequent stages in the internationalization process as requiring higher levels of resource commitment and providing higher levels of control over foreign activities (e. g. wholly owned subsidiary). The experience of Toyota is consistent with the Uppsala Model.According to the Born Global Model, some companies are born global, establishing significant international operations instantaneously or shortly after the company is launched. These firms do not employ an incremental approach. Instead, these firms aggressively pursue internationalization due to their internal penchant or the need to move quickly due to the nature of their products or services. The experience of many internet companies is consistent with the Born Global Model. Difficulty Moderate Page 9-10 Topic Process of internationalization21.Roy is the CEO of a multinational apparel company. How would he conceptualize the strategic role of his firms foreign operations if he have a global mentality? If he pos sessed a multinational mentality? Answer If Roy possessed a global mentality, he would view the world as a single unit of analysis and he would centralize the counseling of the firms foreign operations. Thus, he would drive the firm to create products for a world market and manufacture them on a global scale in a few highly efficient plants, often fit(p) at the corporate center.However, if Roy possessed a multinational mentality, he would regard foreign markets as a portfolio of local opportunities and manage his company as a decentralized federation. Thus, he would recognize and emphasize the differences between national markets and operating environments and modify his products, strategies and management practices on a country-by-country basis. Difficulty Moderate Page 11-13 Topic Mentalities toward internationalization22. What is an MNE? Give examples to explain the difference between companies that are considered MNEs and those that are not. AnswerAn MNE is a company that enga ges in the active management of substantial direct investment in one or more foreign countries and that considers those investments/operations as integral parts of the company, both strategically and organizationally. Thus, companies that solely rely on import-export business are not considered MNEs. They may be considered international companies but not multi-national enterprises (MNEs). Moreover, companies that passively manage an investment portfolio (as opposed to those that actively manage foreign assets) are not considered MNEs. Difficulty Easy Page 2 Topic MNE definition23.Briefly compare and contrast the four mentalities toward internationalization. Answer Companies that have an international mentality produce products for the domestic market and only subsequently sell these products overseas. They transfer innovation and knowledge from the elicit company to the foreign operators. These companies view themselves essentially as domestic with some foreign appendages. Companie s that have a multinational mentality modify their products, strategies, and management practices country by country. These companies view themselves as nationally sensitive and responsive, thusly the term multinational.Companies that have a global mentality create products for a world market and manufacture them on a global level in a few highly efficient plants. These companies view the world, not just individual national markets, as their unit of analysis. Companies that have a transnational mentality are responsive to country-level operations however, they coordinate these operations to sustain competitive effectiveness and economic efficiency. These companies view themselves as an integrated network. Difficulty Moderate Page 11-14 Topic Mentalities toward internationalization