Flashcards on International Management Final

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The largest MNEs are equivalent in their economic importance to less developed economies such as Tanzania, Estonia, or Sri Lanka
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False
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The process of internalization followed by most firms is usually well thought out in advance and typically builds on a combination of rational analysis
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False
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Emerging motivations for internationalization include the desire to enhance the firm's competitive position and the desire to develop global scanning capabilities
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True
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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
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True
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An MNE with a global perspective will typically manage its operations centrally
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True
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An MNE is a
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company that actively manages substantial foreign direct investment
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Three prerequisites that must be satisfied before a national firm can transform itself into a multinational firm include
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location specific advantages, ownership specific advantages, and organizational capabilities
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Which of the following correctly describes the sequential evolution in management thinking with respect to the strategic role of foreign operations in emerging MNEs?
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international, mulitinational, global, transnational
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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
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Vernon's Product Cycle Theory
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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
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regards the world as a single unit of analysis
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The three conflicting environmental forces that MNEs encounter are cross-border integration and coordination, national differentiation and responsiveness, and worldwide innovation and learning.
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True
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Local responsiveness forces encountered by MNEs include cultural differences, government demands and economies of scope
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False
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A global industry is characterized by low national responsiveness and high global integration.
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True
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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.
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False
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The pressures that drive book publishers such as McGraw-Hill to integrate and coordinate their activities across national boundaries are primarily
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economic
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What are the main forces that drive MNEs such as Nokia, the mobile communications company, to innovate and learn on a global scale?
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technological and informational forces.
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A multinational industry is characterized by
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high national responsiveness and low global integration
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A transnational industry is characterized by
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high national responsiveness and high global integration
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In a transnational industry, MNEs are expected to
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build the capability to learn from the many environments in which they operate.
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An industry that is characterized by moderate national responsiveness and moderate global integration is a(n)
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international industry.
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An MNE can maximize each of the following objectives independently - global scale efficiency, multinational flexibility and innovation development.
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False
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The diversity of environments in which the MNE operates enables the firm to develop diverse capabilities and experience multiple learning opportunities.
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True
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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.
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True
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Cost reductions due to scale-economies are static and constant over time and few dynamic benefits are associated with scale economies
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False
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In order to secure worldwide competitive advantage, a multinational firm should pursue all of the following objectives, except:
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maximizing market share in all subsidiaries simultaneously.
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Which of the following is not considered a source of global competitive advantage?
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market leadership
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Which of the following best describes scope economies?
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cost advantage resulting from the joint production, development or distribution of more than one product
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Which of the following explain why cost reduction occurs in the context of scope economies?
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similarities in resource requirements for different products, as well as the tendency of the firm to fully exploit its existing resources
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Which of the following is not a source of environmental volatility?
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risk ratings attributed to the MNE.
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Which of the following describes the strategic orientation of a multinational company?
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focused on building flexibility to respond to national differences through strong, resourceful and entrepreneurial national operations.
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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.
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False
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Companies that pursue a multinational strategy are inclined to adopt the decentralized federation organizational model.
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True
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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.
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False
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In the transnational organization, capable managers situated in the national subsidiaries act as the primary source for sensing and analyzing worldwide opportunities and threats.
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True
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In a transnational organization, the asset and capability configuration can be described as dispersed, specialized and interdependent.
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True
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Which of the following is not a core characteristic of the decentralized federation structure?
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Reporting and oversight conflicts prevail.
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Which of the following is not a core characteristic of the coordinated federation structure?
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Subsidiaries are regarded as key sources of knowledge and expertise
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Which of the following is not characteristic of a transnational strategy?
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Knowledge is developed centrally and adapted locally.
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Which of the following is not a characteristic of the centralized hub structure?
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Most of the manufacturing and product development is executed by the subsidiaries
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Which of the following describes the preferred sequencing of changes associated with implementing the typically more effective emerging change process model?
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Change in individual attitudes and mentalities; then, change in interpersonal relationships and processes; and finally, change in the formal structure and responsibilities
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The innovation process described as local-for-local implies the decentralization of R&D activities in multiple countries.
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True
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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.
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True
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The greatest risk facing center-for-global innovation is market insensitivity
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True
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Linking local managers to corporate decision-making processes makes them more effective in managing local innovation.
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True
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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
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False
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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
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The innovation process adopted by Frank's MNE is center-for-global.
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Which of the following does not enhance the efficiency of a local-for-local innovation process?
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Assigning competent headquarter managers to lead development projects within a subsidiary
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Which of the following management assumptions is most likely to support transnational innovation in MNEs?
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Career paths should be structured to give managers cross-border and cross-functional experience
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What is the primary advantage of operating interdependent subsidiaries?
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It allows the company to integrate scale-efficient operations and to cross-subsidize subsidiaries when necessary
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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?
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TechInnovation could centralize more decision-making to counter-balance the decentralization that has taken place during the past 50 years.
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Entering collaborative relationships with other firms is one way for firms to meet the needs of an increasingly complex environment
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True
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Strategic alliances with customers are a form of collaboration that enable MNEs to increase their bargaining power and reduce their costs
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False
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Strategic alliances are only forged for so long durations. Firms should not enter collaborative agreements with a short term horizon
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False
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Collaboration reduces the time and risk associated with the development of new products
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True
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Alliances are the only feasible way to develop a position in multiple countries and regions
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False
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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
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False
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Once an alliance is formed, the goals, tasks, and management processes of the alliance must constantly be monitored and adapted to changing conditions
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True
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Which of the following is not a benefit of a strategic alliance
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Firms can transfer employees to other organizations to reduce operating costs and acquire new knowledge through the employees they transfer
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Which of the following can inhibit a firm's ability to learn from the alliance
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The interface manager is not the target user of knowledge
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Most stable alliances often involve
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two partners that are each satisfied with access to, rather than the acquisition of, each other's knowledge
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The global business manager alone is responsible for formulating the strategic priorities of the MNE
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False
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The global business manager does not need to be located in the MNE's home country
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True
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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
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False
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Innovations can be stimulated by all of the following - revolutionary technological breakthroughs, emerging consumer trends, new competitive challenges and pending government regulations.
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True
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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.
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False
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To succeed in the modern international operating environment, managers must be able to do all of the following, except:
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respond aggressively to below-budget financial results
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In overseeing the worldwide distribution of key assets and resources, the global business manager is responsible for all of the following, except
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complying with the wishes of local municipal governments responsible for governing the regions within which the assets and resources are situated.
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In executing responsibilities for cross-border coordination, the global business manager will not typically
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enforce fair market value transaction pricing between all global business units
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Worldwide functional managers would not occupy the following executive role in the MNE
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Vice-President, South America
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Which of the following expressions is used to describe one class of transnational innovation developed by worldwide functional managers
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globally linked innovations.
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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.
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False
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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.
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True
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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.
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True
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Responsive MNEs act in a way that is sensitive and responsive to the needs of all its immediate stakeholders.
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True
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Transformative MNEs commit to leading initiatives to bring life-enhancing changes to their home countries.
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False
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Which of the following four adjectives are not typically used to describe the manner in which MNEs might respond to developing world needs:
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compensatory
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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:
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employment and increased tax bases.
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Which of the following characteristics are not typically associated with transactional MNEs
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they acknowledge the need to restrain their profit-maximizing behaviour when engaged in negotiations with indigenous suppliers.
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Responsive MNEs contribute to the development of the poorest nations by engaging in all of the following activities, except:
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focusing on maximizing profitability.
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Which of the following are not characteristic of the attitudes of transactional MNEs in the context of their relationships with stakeholders
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defers responsibility for its social or environmental impact
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