Chap 10

Which of the following factors help define the administrative and political distance between two countries?

The absence or presence of political hostilities The absence or presence of shared monetary associations The strength of legal or financial institutions

Companies from wealthy countries benefit from cross-border trade with other wealthy countries when their competitive advantage is based on which of the following factors?

economies of experience economies of scale standardization

National culture, according to Geert Hofstede, can be defined as different groups' distinctive

"programming of the mind"

Which of the following statements about workers in the United States versus workers in other countries is true?

A manufacturing worker in the United States makes several times what a similar worker in China.

The decision framework that is based on the relative distance between home and a foreign target country is the

CAGE distance framework

Which country experienced rapid economic growth in the early 21st century and now challenges the United States for global economic supremacy?

China

Which of the following have helped make globalization possible?

Falling trade barriers Reductions in transportation costs Advances in telecommunications

Which of the following statements about pursuing international expansion is true?

It can enhance a firm's competitive advantage.

Relaxicab Inc. is a 100-year-old, multinational enterprise (MNE). Which of the following activities would the company most likely have been involved in during the stage of Globalization 2.0?

It would have increased its local responsiveness to country-specific circumstances by duplicating business functions overseas.

Which of the following are distinctive features of globalization 3.0?

MNEs reorganize into a more seamless global enterprise. Firms create global networks of local expertise. Technology helps reduce communication distances.

Which of the following statistics regarding MNEs are correct?

They pay 25% of the wages in the United States. They account for 11% of the private sector employment growth since 1990. They make up 74% of the private sector R&D.

Which of the following have the effect of shrinking the administrative and political distance between countries?

a colony-colonizer relationship trade agreements shared currency

Calculating cultural distance involves comparing the cultures of which of the following?

a firm's home country a targeted host country

When firms from wealthy countries trade with firms from poor countries, they benefit from economic

arbitrage

Spex is a leading manufacturer of eyeglasses. Spex is based in the United States but opens a facility in a Japanese city known for cutting-edge eyeglass innovations. Spex is counting on which of the following?

benefiting from location economies

At a basic level, the concept of "liability of foreignness" refers to the additional

cost of doing business in an unfamiliar cultural and economic environment

Under Globalization 3.0, MNEs freely locate business functions anywhere in the world based on an optimal mix of which factors?

costs PESTEL factors capabilities

The cultural disparity between the internationally expanding firm's home country and its targeted host country is known as

cultural distance

When looking at the modes of foreign-market entry, one could conclude that

exporting might be the earliest stage of commitment because it allows the firm to test whether a foreign market is ready for its products

Porter's diamond framework to explain national competitive advantage includes four interrelated factors: demand conditions, competitive intensity in a focal industry, related and supporting industries/complementors, and

factor conditions

Which of the following dimensions are considered in the CAGE distance framework?

geographic distance cultural distance economic distance admin & political distance

Since expanding internationally, IKEA has shifted focus, concentrating on effectively managing a global supply chain in order to achieve economies of scale. This is reflective of a(n) ______ strategy.

global-standardization

The process of closer integration and exchange between different countries and peoples worldwide, made possible by falling trade and investment barriers, advances in telecommunications, and reductions in transportation costs, is known as

globalization

In order for a company to be considered a multinational enterprise, it must operate

in more than one country

Due to globalization, the world's market economies are becoming more

integrated and interdependent

IKEA offers the same products in every market. This indicates that IKEA has followed a(n) ______ strategy.

international

If a firm's goal is to leverage home-based core competencies in foreign markets, it should pursue a(n) ______ strategy.

international

Benicio's Burritos is a leader in the Mexican fast-food category in the United States. It decides to expand internationally, starting in Japan. Benicio's Burritos fails within a year, learning later that Mexican food is uncommon in Japan and that the flavor profiles are not compatible with Japanese palates. The failure of Benicio's Burritos can be attributed to which of the following?

liability of foreignness

The benefits to be accrued from locating value chain activities in the world's optimal geographies for a specific activity are known as

location economies

In ______ societies, competitiveness, assertiveness, and the exercise of power are considered ideal.

masculine

A company that deploys resources and capabilities in the procurement, production, and distribution of goods and services in at least two countries is a ______.

multinational enterprise

Despite a growing belief in the death-of-distance hypothesis, there remains evidence that certain countries remain leaders in specific industries and maintain a kind of ______ advantage.

national competitive

Global events in the 2000s and 2010s contributed to a rise of ______ political policies in the United States and Europe which could significantly alter the global trade landscape in coming years.

nationalist

When companies face a highly competitive environment at home, they are more likely to

outperform global competition that lacks such intense domestic competition

In a global-standardization strategy, the main competitive element is

reduced cost

As MNEs compete internationally, a focus on local responsiveness allows them to do which of the following?

tailor product offerings to fit local preferences and requirements

Which of the following were black swan events that occurred in the early 21st century and helped reshape the global economy?

the Global financial crisis the European refugee crisis the European debt crisis

In the late 2010s, a trade war between which two countries threatened to upend decades of globalization and international trade?

the United States and China

Which of the following are common reasons for companies to make foreign direct investments?

to avoid import restrictions to reduce labor costs to reduce tax burdens

Which of the following are reasons firms expand internationally?

to gain access to low-cost input factors to develop new competencies to gain access to a larger market

A(n) ______ strategy focuses on integration at the business level by attempting to reconcile product differentiations at low cost.

transitional

U.S. MNEs have a disproportionately positive impact on the U.S. economy.

true

Foreign direct investments are investments in

value chain activities abroad

Which of the following is the most important determinant of economic distance?

wealth and per capita income