question

The largest MNEs are equivalent in their economic importance to less developed economies such as Tanzania, Estonia, or Sri Lanka

answer

False

question

The process of internalization followed by most firms is usually well thought out in advance and typically builds on a combination of rational analysis

answer

False

question

Emerging motivations for internationalization include the desire to enhance the firm's competitive position and the desire to develop global scanning capabilities

answer

True

question

For an MNE to exist, first foreign countries must provide location specific advantages to attract the company to invest there, second foreign countries 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

answer

True

question

An MNE with a global perspective will typically manage its operations centrally

answer

True

question

An MNE is a

answer

company that actively manages substantial foreign direct investment

question

Three prerequisites that must be satisfied before a national firm can transform itself into a multinational firm include

answer

location specific advantages, ownership specific advantages, and organizational capabilities

question

Which of the following correctly describes the sequential evolution in management thinking with respect to the strategic role of foreign operations in emerging MNEs?

answer

international, mulitinational, global, transnational

question

Which 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 counties; in the fourth stage they start being produced in low wage developing countries

answer

Vernon's Product Cycle Theory

question

OfficeWare Corp. is an MNE that produces and sells office equipment. If the company's CEO employs a global mentality toward the strategic role of the company's foreign operations, then we would expect that OfficeWare

answer

regards the world as a single unit of analysis

question

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

answer

True

question

Local responsiveness forces encountered by MNEs include cultural differences, government demands and economies of scope

answer

False

question

A global industry is characterized by low national responsiveness and high global integration.

answer

True

question

A firm's decision with respect to whether it should adopt a global, multinational or international strategy should be made without any consideration of the industry in which the firm operates.

answer

False

question

The pressures that drive book publishers such as McGraw-Hill to integrate and coordinate their activities across national boundaries are primarily

answer

economic

question

What are the main forces that drive MNEs such as Nokia, the mobile communications company, to innovate and learn on a global scale?

answer

technological and informational forces.

question

A multinational industry is characterized by

answer

high national responsiveness and low global integration

question

A transnational industry is characterized by

answer

high national responsiveness and high global integration

question

In a transnational industry, MNEs are expected to

answer

build the capability to learn from the many environments in which they operate.

question

An industry that is characterized by moderate national responsiveness and moderate global integration is a(n)

answer

international industry.

question

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

answer

False

question

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

answer

True

question

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.

answer

True

question

Cost reductions due to scale-economies are static and constant over time and few dynamic benefits are associated with scale economies

answer

False

question

In order to secure worldwide competitive advantage, a multinational firm should pursue all of the following objectives, except:

answer

maximizing market share in all subsidiaries simultaneously.

question

Which of the following is not considered a source of global competitive advantage?

answer

market leadership

question

Which of the following best describes scope economies?

answer

cost advantage resulting from the joint production, development or distribution of more than one product

question

Which of the following explain why cost reduction occurs in the context of scope economies?

answer

similarities in resource requirements for different products, as well as the tendency of the firm to fully exploit its existing resources

question

Which of the following is not a source of environmental volatility?

answer

risk ratings attributed to the MNE.

question

Which of the following describes the strategic orientation of a multinational company?

answer

focused on building flexibility to respond to national differences through strong, resourceful and entrepreneurial national operations.

question

Companies have found that installing a matrix structure is the most effective way to transition from an organization based on multiple regional divisions to one able to manage both geographic and product diversity.

answer

False

question

Companies that pursue a multinational strategy are inclined to adopt the decentralized federation organizational model.

answer

True

question

The degree of control and coordination exercised by the headquarters is greater in the context of the decentralized federation model than it is in the coordinated federation organizational model.

answer

False

question

In the transnational organization, capable managers situated in the national subsidiaries act as the primary source for sensing and analyzing worldwide opportunities and threats.

answer

True

question

In a transnational organization, the asset and capability configuration can be described as dispersed, specialized and interdependent.

answer

True

question

Which of the following is not a core characteristic of the decentralized federation structure?

answer

Reporting and oversight conflicts prevail.

question

Which of the following is not a core characteristic of the coordinated federation structure?

answer

Subsidiaries are regarded as key sources of knowledge and expertise

question

Which of the following is not characteristic of a transnational strategy?

answer

Knowledge is developed centrally and adapted locally.

question

Which of the following is not a characteristic of the centralized hub structure?

answer

Most of the manufacturing and product development is executed by the subsidiaries

question

Which of the following describes the preferred sequencing of changes associated with implementing the typically more effective emerging change process model?

answer

Change in individual attitudes and mentalities; then, change in interpersonal relationships and processes; and finally, change in the formal structure and responsibilities

question

The innovation process described as local-for-local implies the decentralization of R&D activities in multiple countries.

answer

True

question

Globally linked innovations involve processes designed to ensure that the special resources and capabilities of each subsidiary are globally available to other units of the organization.

answer

True

question

The greatest risk facing center-for-global innovation is market insensitivity

answer

True

question

Linking local managers to corporate decision-making processes makes them more effective in managing local innovation.

answer

True

question

The development of transnational innovation requires that the roles performed by organizational units worldwide are essentially uniform, and that the headquarters manages all of its subsidiaries in the same manner

answer

False

question

Frank is director of technology in an MNE in which most of the R&D activities are performed in the parent company's home country, but then, foreign subsidiaries are responsible for introducing the resulting innovations to their local customers

answer

The innovation process adopted by Frank's MNE is center-for-global.

question

Which of the following does not enhance the efficiency of a local-for-local innovation process?

answer

Assigning competent headquarter managers to lead development projects within a subsidiary

question

Which of the following management assumptions is most likely to support transnational innovation in MNEs?

answer

Career paths should be structured to give managers cross-border and cross-functional experience

question

What is the primary advantage of operating interdependent subsidiaries?

answer

It allows the company to integrate scale-efficient operations and to cross-subsidize subsidiaries when necessary

question

TechInnovation is a large MNE operating in an environment characterized by rapid changes. During the past 50 years, its subsidiaries have operated independently. Which of the following actions will be least helpful to increase the interdependence across its widely dispersed national organizations?

answer

TechInnovation could centralize more decision-making to counter-balance the decentralization that has taken place during the past 50 years.

question

Entering collaborative relationships with other firms is one way for firms to meet the needs of an increasingly complex environment

answer

True

question

Strategic alliances with customers are a form of collaboration that enable MNEs to increase their bargaining power and reduce their costs

answer

False

question

Strategic alliances are only forged for so long durations. Firms should not enter collaborative agreements with a short term horizon

answer

False

question

Collaboration reduces the time and risk associated with the development of new products

answer

True

question

Alliances are the only feasible way to develop a position in multiple countries and regions

answer

False

question

A vast majority of successful cross-border collaborations are founded and maintained by firms that acquire the other partner's knowledge without sharing their own knowledge

answer

False

question

Once an alliance is formed, the goals, tasks, and management processes of the alliance must constantly be monitored and adapted to changing conditions

answer

True

question

Which of the following is not a benefit of a strategic alliance

answer

Firms can transfer employees to other organizations to reduce operating costs and acquire new knowledge through the employees they transfer

question

Which of the following can inhibit a firm's ability to learn from the alliance

answer

The interface manager is not the target user of knowledge

question

Most stable alliances often involve

answer

two partners that are each satisfied with access to, rather than the acquisition of, each other's knowledge

question

The global business manager alone is responsible for formulating the strategic priorities of the MNE

answer

False

question

The global business manager does not need to be located in the MNE's home country

answer

True

question

While the global business manager must routinely incorporate the perspectives of the geographic (country) managers when formulating the MNE's global business strategy, there is no need to incorporate the perspectives of the worldwide functional managers because these perspectives are incorporated into the formulation of the broader corporate strategy

answer

False

question

Innovations can be stimulated by all of the following - revolutionary technological breakthroughs, emerging consumer trends, new competitive challenges and pending government regulations.

answer

True

question

Two key tasks associated with the geographic (country) manager's role as a national defender and advocate are both the responsibility for advocating the subsidiary's role in the MNE's worldwide organization and the responsibility for championing transnational innovations.

answer

False

question

To succeed in the modern international operating environment, managers must be able to do all of the following, except:

answer

respond aggressively to below-budget financial results

question

In overseeing the worldwide distribution of key assets and resources, the global business manager is responsible for all of the following, except

answer

complying with the wishes of local municipal governments responsible for governing the regions within which the assets and resources are situated.

question

In executing responsibilities for cross-border coordination, the global business manager will not typically

answer

enforce fair market value transaction pricing between all global business units

question

Worldwide functional managers would not occupy the following executive role in the MNE

answer

Vice-President, South America

question

Which of the following expressions is used to describe one class of transnational innovation developed by worldwide functional managers

answer

globally linked innovations.

question

Experience has shown that encouraging foreign direct investment by MNEs in developing economies has been less effective than government-funded aid programs in efforts to reduce global poverty.

answer

False

question

The primary difference between transactional MNEs and exploitive MNEs is that the former employs an approach that tends to be legally compliant and non-oppressive in its emerging market dealings.

answer

True

question

Some transformative MNEs go beyond commercial relationships with their consumers and offer their products and services to those who most desperately need them, regardless of their ability to pay.

answer

True

question

Responsive MNEs act in a way that is sensitive and responsive to the needs of all its immediate stakeholders.

answer

True

question

Transformative MNEs commit to leading initiatives to bring life-enhancing changes to their home countries.

answer

False

question

Which of the following four adjectives are not typically used to describe the manner in which MNEs might respond to developing world needs:

answer

compensatory

question

Exploitive MNEs are often able to extract substantial concessions from host country governments because host countries are eager to secure which of the following in connection with new investments made by MNEs:

answer

employment and increased tax bases.

question

Which of the following characteristics are not typically associated with transactional MNEs

answer

they acknowledge the need to restrain their profit-maximizing behaviour when engaged in negotiations with indigenous suppliers.

question

Responsive MNEs contribute to the development of the poorest nations by engaging in all of the following activities, except:

answer

focusing on maximizing profitability.

question

Which of the following are not characteristic of the attitudes of transactional MNEs in the context of their relationships with stakeholders

answer

defers responsibility for its social or environmental impact

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