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:
holding company.
greenfield investment.
shell corporation.
fully-owned subsidiary.
Question 2
Which of the following terms refers to the basic means by which a company competes?
Question options:
Strategy
Mission
Procedure
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:
The firm searches for less restrictive operating environments overseas
The firm becomes entangled in lengthy litigation
The firm expands its domestic operations
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:
Offshoring
Management contract
Joint venture
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:
Tax incentives
Trade barriers
Manufacturer demands
Customer demands
Question 6
__________ refers to the establishment of worldwide operations and the development of standardized products and marketing.
Question options:
Globalization
Nationalization
Customization
Regionalization
Question 7
Which of the following would most likely be categorized as a global financial objective of an international firm?
Question options:
Long-term profit growth
Company market share
Quality and cost control
Foreign-exchange management
Question 8
At which three levels should firms ideally perform global environmental analysis?
Question options:
Innovation, production, and local distribution
Operational, tactical, and top management
Product, domestic market, and consumer
Multinational, regional, and local
Question 9
Which of the following is the proactive reason that prompts firms to expand overseas?
Question options:
Avoiding restrictive trade barriers
Seeking economies of scale
Solving logistics-related problems
Responding to foreign competition
Question 10
Which of the following statements is true of clustering?
Question options:
It helps a firm gain an increase in efficiencies.
It seldom uses specialized labor.
It typically increases the costs of production and distribution.
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:
analysis stage.
assessment stage.
planning phase.
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:
Comparative advantage
Absolute advantage
Collective bargaining
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:
Greenfield investment
Offshoring
Turnkey operation
International joint venture
Question 14
Which of the following is a national risk with regard to strategic entry scanning?
Question options:
Energy availability and prices
Legal protection
Regional instability
Political turmoil
Question 15
Restrictive trade barriers most likely influence the globalization of businesses by encouraging firms to:
Question options:
develop joint ventures with local firms.
switch from exporting to overseas manufacturing.
import supplies from foreign vendors.
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:
eliminate markets with unreasonable entry conditions.
eliminate countries with high cultural risk.
identify the strengths and weaknesses of its competitors.
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:
Globalization of competitors
Resource access and cost savings
Tax incentives
Economies of scale
Question 18
Which of the following is a global risk with regard to strategic entry scanning?
Question options:
Economic and financial risk
Corruption
Economic and fiscal policies
Trade restrictions
Question 19
Goals for market volume and profitability are usually set higher for international than domestic operations due to the:
Question options:
presence of stable market conditions.
involvement of greater risks.
enforcement of government controls.
presence of stable exchange rates.
Question 20
Which of the following is the quickest and cheapest way to develop a global strategy?
Question options:
Strategic alliances
Fully-owned subsidiaries
Acquisitions
Greenfield investments
Section 2
Question 21
Which of the following forms of organization is particularly appropriate in a dynamic and diverse environment?
Question options:
The global product structure
The domestic structure plus foreign subsidiary
The global functional structure
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:
top managers are from the head office, the host country, or a third country.
the organization is product- or service-oriented.
financial performance reports show a positive trend in growth over the past several years.
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:
are anxious to get into an attractive market.
want to reduce the amount spent on establishing subsidiaries abroad
want to take advantage of the local partner’s technological innovations.
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:
Overlapping responsibilities are absent in a matrix structure.
The matrix structure is developed to combine geographic support for both global integration and local responsiveness.
Regional managers are solely responsible for the operations and performance of the countries within a given region.
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:
Protectionist legislation
Emergence of market firms in the host country
Use of e-commerce enablers
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:
rationalization.
integration.
segregation.
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:
Sedona is a family-owned business that began as a subsidiary to Aloha enterprises.
Sedona has recently reorganized into a domestic structure plus foreign subsidiary.
Praxis Inc., one of Sedona’s domestic competitors, has a flat
organizational structure.
Sedona conducts a large percentage of domestic sales through the
company’s website.
Question 28
All of the following are cooperative aspects of strategic alliances EXCEPT:
Question options:
limiting investment risks through shared resources.
learning new intangible skills from alliance partners.
forming upstream–downstream divisions of labor.
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:
Which type of operating system is primarily used by TMC Enterprises?
What is the financial health of TMC Enterprises?
Which other firms have outsourced their processes to TMC Enterprises?
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:
is technologically superior to the host country.
and host country equally participate in decision making.
has conflicting practices and systems.
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:
good venture partners are hard to find.
partners can become competitors.
technologies change very rapidly.
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:
Policies of the smaller firm
Staffing choices for top IJV positions
Cultural background
IJV industry
Question 33
Which of the following is true with regard to the global geographic structure?
Question options:
In a geographic structure, problems of coordination across different regions are virtually nonexistent.
The geographic structure is not an adequate structure for consolidating regional expertise.
With the geographic structure, the focus is on importing.
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:
New management with different goals and strategies
Seamless innovation
Low turnover
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:
Equity strategic alliance
Non-equity strategic alliance
Global strategic alliance
International joint venture
Question 36
Which of the following is a competitive aspect of strategic alliances? Answer: C
Question options:
Sharing resources to limit investment risk when entering new markets or uncertain technological fields
Lowering exit barriers in mature industries, therefore, assisting short-term corporate restructurings
Accelerating diffusion of industry standards and new technologies to create barriers to entry
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:
outsourcing company.
knowledge management firm.
e-commerce enabler.
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:
franchisor.
majority JV partner.
minority JV partner.
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:
insourcing
outsourcing
subordinateship
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:
Nimbus has only a few SBUs.
Nimbus is a born global.
Nimbus does not favor standardization of its products.
Nimbus has a matrix structure.