| Question 1 |
Question 1
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:
Question options:
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| holding company. |
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| greenfield investment. |
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| shell corporation. |
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| fully-owned subsidiary. |
| Question 2 | |
Which of the following terms refers to the basic means by which a company competes?
Question options:
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| Strategy |
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| Mission |
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| Procedure |
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| Process |
| Question 3 | |
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?
Question options:
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| The firm searches for less restrictive operating environments overseas |
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| The firm becomes entangled in lengthy litigation |
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| The firm expands its domestic operations |
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| The firm responds to customers' demands more promptly |
| Question 4 | |
Which of the following entry strategies is most likely to serve as a short-term strategy and to provide limited income?
Question options:
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| Offshoring |
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| Management contract |
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| Joint venture |
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| Fully owned subsidiary |
| Question 5 | |
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?
Question options:
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| Tax incentives |
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| Trade barriers |
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| Manufacturer demands |
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| Customer demands |
| Question 6 | |
__________ refers to the establishment of worldwide operations and the development of standardized products and marketing.
Question options:
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| Globalization |
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| Nationalization |
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| Customization |
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| Regionalization |
| Question 7 | |
Which of the following would most likely be categorized as a global financial objective of an international firm?
Question options:
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| Long-term profit growth |
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| Company market share |
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| Quality and cost control |
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| Foreign-exchange management |
| Question 8 | |
At which three levels should firms ideally perform global environmental analysis?
Question options:
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| Innovation, production, and local distribution |
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| Operational, tactical, and top management |
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| Product, domestic market, and consumer |
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| Multinational, regional, and local |
| Question 9 | |
Which of the following is the proactive reason that prompts firms to expand overseas?
Question options:
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| Avoiding restrictive trade barriers |
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| Seeking economies of scale |
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| Solving logistics-related problems |
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| Responding to foreign competition |
| Question 10 | |
Which of the following statements is true of clustering?
Question options:
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| It helps a firm gain an increase in efficiencies. |
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| It seldom uses specialized labor. |
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| It typically increases the costs of production and distribution. |
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| It uses different suppliers and distribution channels for interdependent companies within an industry. |
| Question 11 | |
The second part of the strategic management process involves the:
Question options:
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| analysis stage. |
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| assessment stage. |
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| planning phase. |
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| implementation phase. |
| Question 12 | |
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?
Question options:
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| Comparative advantage |
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| Absolute advantage |
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| Collective bargaining |
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| Competitive advantage |
| Question 13 | |
Which of the following strategies would a non-European company most likely use if it wanted to gain quick entry inside the European community?
Question options:
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| Greenfield investment |
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| Offshoring |
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| Turnkey operation |
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| International joint venture |
| Question 14 | |
Which of the following is a national risk with regard to strategic entry scanning?
Question options:
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| Energy availability and prices |
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| Legal protection |
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| Regional instability |
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| Political turmoil |
| Question 15 | |
Restrictive trade barriers most likely influence the globalization of businesses by encouraging firms to:
Question options:
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| develop joint ventures with local firms. |
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| switch from exporting to overseas manufacturing. |
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| import supplies from foreign vendors. |
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| expand the exportation of raw materials. |
| Question 16 | |
The first broad scan of all potential world markets should result in the firm being able to:
Question options:
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| eliminate markets with unreasonable entry conditions. |
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| eliminate countries with high cultural risk. |
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| identify the strengths and weaknesses of its competitors. |
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| determine the best sources for raw materials. |
| Question 17 | |
Which of the following is the most common reactive reason for a firm to extend its operations overseas?
Question options:
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| Globalization of competitors |
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| Resource access and cost savings |
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| Tax incentives |
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| Economies of scale |
| Question 18 | |
Which of the following is a global risk with regard to strategic entry scanning?
Question options:
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| Economic and financial risk |
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| Corruption |
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| Economic and fiscal policies |
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| Trade restrictions |
| Question 19 | |
Goals for market volume and profitability are usually set higher for international than domestic operations due to the:
Question options:
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| presence of stable market conditions. |
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| involvement of greater risks. |
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| enforcement of government controls. |
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| presence of stable exchange rates. |
| Question 20 | |
Which of the following is the quickest and cheapest way to develop a global strategy?
Question options:
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| Strategic alliances |
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| Fully-owned subsidiaries |
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| Acquisitions |
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| Greenfield investments |
| Section 2 | |
| Question 21 |
Which of the following forms of organization is particularly appropriate in a dynamic and diverse environment?
Question options:
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| The global product structure |
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| The domestic structure plus foreign subsidiary |
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| The global functional structure |
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| The domestic structure plus export department |
| Question 22 | |
The degree to which headquarters' practices and goals are transferable most likely depends on whether:
Question options:
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| top managers are from the head office, the host country, or a third country. |
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| the organization is product- or service-oriented. |
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| financial performance reports show a positive trend in growth over the past several years. |
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| the production system is standardized. |
| Question 23 | |
In spite of the potential problems with local partners, many firms rush the process of partner selection because they:
Question options:
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| are anxious to get into an attractive market. |
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| want to reduce the amount spent on establishing subsidiaries abroad |
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| want to take advantage of the local partner's technological innovations. |
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| mostly aim at increasing the number of equity shares within a short period of time. |
| Question 24 | |
Which of the following is true about the matrix structure of organizational design?
Question options:
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| Overlapping responsibilities are absent in a matrix structure. |
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| The matrix structure is developed to combine geographic support for both global integration and local responsiveness. |
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| Regional managers are solely responsible for the operations and performance of the countries within a given region. |
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| In the matrix structure, communication problems, confusion, and conflict are minimal. |
| Question 25 | |
Which of the following is a cultural difference that can significantly affect cross-border alliances?
Question options:
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| Protectionist legislation |
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| Emergence of market firms in the host country |
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| Use of e-commerce enablers |
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| Organizational formality |
| Question 26 | |
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:
Question options:
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| rationalization. |
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| integration. |
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| segregation. |
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| customer loyalty. |
| Question 27 | |
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?
Question options:
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| Sedona is a family-owned business that began as a subsidiary to Aloha enterprises. |
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| Sedona has recently reorganized into a domestic structure plus foreign subsidiary. |
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| Praxis Inc., one of Sedona's domestic competitors, has a flat |
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| Sedona conducts a large percentage of domestic sales through the |
| Question 28 | |
All of the following are cooperative aspects of strategic alliances EXCEPT:
Question options:
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| limiting investment risks through shared resources. |
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| learning new intangible skills from alliance partners. |
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| forming upstream–downstream divisions of labor. |
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| creating economies of scale in tangible assets. |
| Question 29 | |
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?
Question options:
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| Which type of operating system is primarily used by TMC Enterprises? |
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| What is the financial health of TMC Enterprises? |
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| Which other firms have outsourced their processes to TMC Enterprises? |
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| What is the attitude of U.S. consumers about TMC Enterprises? |
| Question 30 | |
Overlooking cultural differences in cross-border alliances can create a negative impact when target country:
Question options:
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| is technologically superior to the host country. |
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| and host country equally participate in decision making. |
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| has conflicting practices and systems. |
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| has similar views on organizational formality. |
| Question 31 | |
According to David Lei, the single greatest impediment managers face when seeking to learn or renew sources of competitive advantage is that:
Question options:
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| good venture partners are hard to find. |
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| partners can become competitors. |
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| technologies change very rapidly. |
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| governments can be fickle. |
| Question 32 | |
Which of the following primarily determines the extent of control exercised over an IJV by its parent company?
Question options:
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| Policies of the smaller firm |
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| Staffing choices for top IJV positions |
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| Cultural background |
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| IJV industry |
| Question 33 | |
Which of the following is true with regard to the global geographic structure?
Question options:
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| In a geographic structure, problems of coordination across different regions are virtually nonexistent. |
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| The geographic structure is not an adequate structure for consolidating regional expertise. |
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| With the geographic structure, the focus is on importing. |
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| Marketing-oriented companies are most likely to opt for this structure. |
| Question 34 | |
Which of the following indicates a need for change in organizational design?
Question options:
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| New management with different goals and strategies |
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| Seamless innovation |
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| Low turnover |
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| A decrease in overseas customer complaints |
| Question 35 | |
Which of the following types of alliances can be formed between a company and a foreign government?
Question options:
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| Equity strategic alliance |
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| Non-equity strategic alliance |
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| Global strategic alliance |
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| International joint venture |
| Question 36 | |
Which of the following is a competitive aspect of strategic alliances? Answer: C
Question options:
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| Sharing resources to limit investment risk when entering new markets or uncertain technological fields |
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| Lowering exit barriers in mature industries, therefore, assisting short-term corporate restructurings |
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| Accelerating diffusion of industry standards and new technologies to create barriers to entry |
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| Creating a critical mass to develop new technologies to protect domestic, strategic industries |
| Question 37 | |
NextLinx Corporation provides a wide range of strategic implementation services for small- and medium-sized organizations. It allows all trading partners to collaborate in a single online location, using the same information and processes. Therefore, NextLinx is an example of a(n):
Question options:
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| outsourcing company. |
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| knowledge management firm. |
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| e-commerce enabler. |
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| IJV controller. |
| Question 38 | |
Trout Corp., Kirgo Ltd., and Sturgeon Inc., three of the leading construction companies in the U.S., have decided to join hands and create a new cement manufacturing company. According to their agreement, Trout Corp. will have 50 percent equity, Kirgo Ltd. will have 20 percent equity, and Sturgeon Inc. will have 30 percent equity. In this given scenario, Sturgeon Inc. is referred to as a(n):
Question options:
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| franchisor. |
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| majority JV partner. |
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| minority JV partner. |
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| sole proprietor. |
| Question 39 | |
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 options:
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| insourcing |
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| outsourcing |
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| subordinateship |
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| born-global |
| Question 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?
Question options:
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| Nimbus has only a few SBUs. |
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| Nimbus is a born global. |
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| Nimbus does not favor standardization of its products. |
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| Nimbus has a matrix structure. |
