mgmt 452 exam 2

exporting

Which of the following entry strategies requires little investment and enables quick and easy market withdrawal? A) franchising B) joint ventures C) turnkey projects D) exporting

SWOT analysis

A ________ ___________ is an assessment of a firm's capabilities relative to those of its competitors as pertinent to the opportunities and threats in the environment for those firms.

management contract

A ________ gives a foreign company the rights to oversee the daily operations of a business but not to make decisions regarding ownership, financing, or strategic and policy changes; is most likely to serve as a short-term strategy and to provide limited income

joint venture

A ________ is a new independent entity that is collectively created and owned by two or more parent companies. A) subsidiary B) joint venture C) greenfield investment D) turnkey operation

strategy

A company's choice to operate in a business or businesses and the ways in which it differentiates itself from its competitors is called its ________.

providing incentives

A country seeks new infusions of capital, technology, and know-how. It announces that it shall exempt taxes and grant concessions for foreign investors. Which of the following measures is the country employing? A) providing incentives B) imposing regulations C) establishing trade barriers D) ensuring economies of scale

internal analysis

A(n) ________ analysis determines which areas of a firm's operations represent strengths or weaknesses (currently or potentially) compared to competitors.

international JV

A(n) ________ refers to a JV among companies in different countries. A) international joint venture B) equity joint venture C) global joint venture D) transnational joint venture

partners can become competitors

According to David Lei, the single greatest impediment managers face when seeking to learn or renew sources of competitive advantage is that ________. A) good venture partners are hard to find B) technologies change very rapidly C) partners can become competitors D) governments can be fickle

B

According to Dovev Lavie, which of the following is a caution given to global companies by value capture strategies? A) Set organizational and technological buffers between competing partners. B) Avoid partners that compete in your industry if they enjoy superior bargaining power. C) Learn and assimilate network resources in order to develop new skills and capabilities. D) Align organizational units and create a coherent interface with each partner in the alliance.

assimilating network resources to acquire new skills and capabilities

According to Dovev Lavie, which of the following is a value-creation strategy? A) setting organizational buffers between competing partners B) allying with multiple partners in one industry to limit power C) assimilating network resources to acquire new skills and capabilities D) aligning organizational units to create coherent interfaces

semi-globalization

According to Ghemawat, which of the following offers room for cross-border strategy to have content distinct from single-country strategy? A) regional integration B) nationalization C) semi-globalization D) privatization

risk of learning is low

According to Gupta and Govindarajan, an alliance-based entry strategy is most suitable when ________. A) firms have a significant amount of capital B) the risk of asymmetric learning by the partner is low C) cultural distance between home and host countries is extremely low D) the subsidiary would be highly integrated with the rest of the global operations

learning new skills...

All of the following are cooperative aspects of strategic alliances EXCEPT ________. A) creating economies of scale in tangible assets B) forming upstream-downstream divisions of labor C) limiting investment risks through shared resources D) learning new intangible skills from alliance partners

C

All of the following are examples of international joint venture control mechanisms used by parent firms EXCEPT ________. A) staffing policies B) legal contracts C) regional authorities D) organizational design

equity strategic alliance

Alliances in which two or more partners have different relative ownership shares in the new venture are called ________. A) cultural strategic alliances B) equity strategic alliances C) non-equity strategic alliances D) transmodal strategic alliances

non-equity strategic alliances

Alliances that are carried out through contract rather than ownership sharing are called ________. A) cultural strategic alliances B) equity strategic alliances C) non-equity strategic alliances D) transmodal strategic alliances

resources and operations

An internal analysis focuses on the company's ________. A) vision and mission B) market share C) competitors D) resources and operations

B

Barton & Green is an MNC based in the U.S. that provides 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 best supports the argument that Barton & Green should outsource its IT infrastructure to TMC Enterprises, one of the best IT infrastructure maintenance firms in India? A) The main competitor of Barton & Green outsources all IT functions. B) Outsourcing will enhance Barton & Green's competitiveness. C) Barton & Green's employees frequently need IT support, so it is best to outsource the IT infrastructure. D) Barton & Green has proprietary technology and processes.

1) Cultural Distance 2) Administrative Distance 3) Geographical Distance 4) Economic Distance

Cage distances between countries refer to what 4 components?

mistrust and secrecy

Cross-border allies often have difficulty collaborating effectively, especially in competitively sensitive areas. This generally leads to ________. A) mistrust and secrecy B) limitation of investment C) short-term corporate restructuring D) lowering of exit barriers

globally integrated company

Dell is an American corporation that deals with computer technology. With its worldwide sourcing and fully merged production and marketing system, Dell is considered to be a ________. A) greenfield investment B) turnkey operation C) shell corporation D) globally integrated company

Comparative advantage

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? A) comparative advantage B) collective bargaining C) competitive advantage D) absolute advantage

involvement of greater risks

Goals for market volume and profitability are usually set higher for international than domestic operations due to the ________. A) involvement of greater risks B) presence of stable market conditions C) enforcement of government controls D) presence of stable exchange rates

B

In order to minimize potential problems in alliances, companies should most likely choose partners with ________. A) competitively sensitive technology B) complementary products and skills C) significant control of the target market D) superior bargaining power in the same industry

D

In spite of the potential problems with local partners, many firms rush the process of partner selection because ________. A) they want to reduce the amount spent on establishing subsidiaries abroad B) they want to take advantage of the local partner's technological innovations C) they mostly aim at increasing the number of equity shares within a short period of time D) they are anxious to get into an attractive market

C

International joint ventures are like a marriage because ________. A) the firms cannot be separated into single entities after the merging B) each firm will have access to all of the others' proprietary technologies and competitively sensitive information C) the more issues that can be settled before the merger, the less likely it will be to break up D) each firm will have equal decision-making powers

provide greater control of proprietary technology

Joint ventures are often the chosen form of multinational firm alliances because they ________. A) provide greater control of proprietary technology B) increase the level of competition between partner firms C) enhance the specific skills of the personnel D) enhance the rewards of the firm

the mature phase of a products life cycle

Licensing is especially suitable for ________. A) firms with a single product line and a constant technological environment B) large firms with huge financial and managerial resources for direct investment abroad C) the mature phase of a product's life cycle when production is relatively standardized D) firms that want to control all of the licensee's activities and performances

trade barriers

Offshoring provides the company with access to foreign markets while avoiding ________. A) relocation of the company to other countries B) competition between companies in the global market C) trade risks D) trade barriers

B

Opening its own subsidiaries in the host country may be better than contracting with an outside firm in the host country, if it is crucial for the firm to ________. A) produce gains in efficiency, productivity, and quality B) keep control of proprietary technology and processes C) minimize job losses in the home country D) market its products in the host country

D

Organizational design as a mechanism for factoring international joint venture control refers to the ________. A) human resource plans and policies of the joint venture B) market share and profitability ratios of the organization C) geographic location of the joint venture's facilities D) amount of decision-making power that the joint venture holds

C

Parent companies use the IJV control process in order to ensure that the management of the joint venture conforms to ________. A) international accounting standards B) qualitative standards C) its own interests D) industry standards

multidomestic

Regional strategies are more appropriate than global strategies for firms that operate in ___________ industries.

switch from exporting to overseas manufacturing

Restrictive trade barriers most likely influence the globalization of businesses by encouraging firms to ________. A) develop joint ventures with local firms B) import supplies from foreign vendors C) expand the exportation of raw materials D) switch from exporting to overseas manufacturing

trade barriers

Roch, a Swiss chocolate company, recently opened a manufacturing unit in Spain. The purpose of this move was that Roch wanted to avoid Spain's high import tariffs. Which of the following reasons prompted Roch to open the manufacturing unit in Spain? A) customer demands B) trade barriers C) globalization of competitors D) growth opportunities

non-equity strategic

Runnerz Inc., a leading manufacturing and retail company that designs and develops footwear and apparel, has signed a contract with a particular courier service for managing the delivery process. The courier service is required to deliver goods from the factory to the warehouse, to customers, and also to collect customer payments for the goods. This is a typical example of a(n) ________. A) non-equity strategic alliance B) turnkey operation C) greenfield investment D) international licensing agreement

conflict btween cooperation and competition

The dual role of strategic alliance refers to the ________. A) constant requirement of resources and markets B) process of finding skilled personnel and training them to work efficiently C) conflict between cooperation and competition D) differences between home and host governments

competitive analysis

The firm's managers perform a ___________ ___________ to assess the firm's capabilities and key success factors compared to those of its competitors.

eliminate markets with unreasonable entry conditions

The first broad scan of all potential world markets should result in the firm being able to ________. A) identify the strengths and weaknesses of its competitors B) eliminate markets with unreasonable entry conditions C) determine the best sources for raw materials D) eliminate countries with high cultural risk

D

The initial challenge in implementing strategies in emerging markets is likely to be how to ________. A) compete with other emerging markets B) allocate responsibilities between the partners C) set up new policies and regulations D) navigate poor infrastructures

B

The need for knowledge management in IJVs primarily stems from ________. A) employee concerns regarding job security and benefits B) cultural and system differences between partners C) local government regulations and restrictions D) proprietary information legalities

inexpensive overseas labor

The primary motive in the contract manufacturing strategy is ________. A) utilizing inexpensive overseas labor B) obtaining rights to patented technology C) sharing managerial expertise D) sharing financial resources

strategic planning

The process by which a firm's managers evaluate the future prospects of the firm and decide on appropriate strategies to achieve long-term objectives is called ________.

environmental scanning

The process of gathering information and forecasting relevant trends, competitive actions, and circumstances that will affect operations in geographic areas of potential interest is called ________.

outsourcing

The use of professional or skilled workers located in countries other than that of the home country is referred to as ________.

1) Increasing competitive clout resulting from regional trading blocs 2) Declining tariffs 3) Information Technology explosion

What are the 3 pressures to globalize?

1) Unique consumer preferences 2) Domestic subsidies 3) New production technologies

What are the 3 pressures to regionalize or localize?

1) attractiveness of overseas markets 2) entry barriers and industry attractiveness 3) antidumping laws

What are three specific ways in which formal institutions affect international competition?

turnkey operation

What entry strategy consists of a company designs and constructs a facility abroad, trains local personnel, and then transfers the facility to local management for a fee?

strategic alliances

What is the quickest and cheapest way to develop a global strategy?

Planning (5) Implementation (2)

What two parts compose the strategic management process?

provision of incentives

When Disney decided to build a park in Paris, the French government gave Disney prime farmland just outside the city limits. This is most likely an example of a firm expanding overseas due to ________. A) globalization of competitors B) restrictive trade barriers C) home country regulations D) provision of incentives

A

Where ownership is divided among several partners, the parent organizations are more likely to delegate the operational running of the IJV to ________. A) local IJV management B) parent company management C) middle managers at the parent company level D) management teams from the largest company in the joint venture

information technology expansion

Which of the following can be regarded as a pressure to globalize? A) decreasing competitive clout B) information technology expansion C) increasing tariffs D) spread of economic nationalism

expropriation threats

Which of the following environmental factors would most likely increase the risk for a firm that has established a fully owned subsidiary in a country? A) expropriation threats B) unreliable distributors C) infrastructure weaknesses D) quality control issues

form of governance chosen

Which of the following factors has the maximum influence on the success of multinational firm alliances? A) form of governance chosen B) introduction of new competition C) differing national cultures D) cumulative learning of partner

C

Which of the following factors most significantly affects all other variables necessary for the successful implementation of a global alliance? A) organizational policies B) organizational structure C) employee leadership D) product performance

C

Which of the following human resource problems can be simplified by increasing the autonomy of the IJV? A) workplace deviance B) employment discrimination C) staffing friction D) employee silence

A

Which of the following is NOT a characteristic of strategic implementation of the McDonald's corporation? A) minimizing autonomy B) hiring locals whenever possible C) forming paradigm-busting arrangements with suppliers D) making minor changes to the standard menu based on location

test marketing campaigns overseas

Which of the following is NOT a typical reason for forming cross-border alliances? A) to avoid import barriers B) to share R&D costs and risks C) to gain access to specific markets D) to test marketing campaigns overseas

accelerating diffusion to create entry barriers

Which of the following is a competitive aspect of strategic alliances? A) sharing resources to limit investment risk when entering new markets or uncertain technological fields B) lowering exit barriers in mature industries, therefore, assisting short-term corporate restructurings C) accelerating diffusion of industry standards and new technologies to create barriers to entry D) creating a critical mass to develop new technologies to protect domestic, strategic industries

creating economies of scale

Which of the following is a cooperative aspect of strategic alliances? A) creating economies of scale in tangible assets B) accelerating diffusion of industry standards to erect barriers to entry C) learning new intangible skills from alliance partners D) denying technological and learning initiative to partners

economic and financial risk

Which of the following is a global risk with regard to strategic entry scanning? A) economic and fiscal policies B) corruption C) economic and financial risk D) trade restrictions

Legal Protection

Which of the following is a national risk with regard to strategic entry scanning? A) energy availability and prices B) regional instability C) legal protection D) political turmoil

disputes over management

Which of the following is a pitfall of cross-border alliances? A) increase in the number of existing competitors B) disputes over management C) convincing expatriates D) finding local skilled employees

seeking economies of scale

Which of the following is a proactive reason that prompts firms to expand overseas? A) avoiding restrictive trade barriers B) solving logistics-related problems C) responding to foreign competition D) seeking economies of scale

customer demands

Which of the following is a reactive reason that prompts a firm to expand overseas? A) customer demands B) seeking economies of scale C) growth opportunities D) seeking incentives

financial and currency instability

Which of the following is a regional risk with regard to strategic entry scanning? A) financial and currency instability B) varying fiscal strategies C) repatriation policies D) shifting production and consumption

A

Which of the following is a strategic implementation used by McDonald's? A) keeping prices low to build market share B) altering menu items significantly to match cultural norms C) using American managers to run international franchises D) forming joint ventures with foreign restaurants to enter new markets

ability to protect proprietary technology

Which of the following is a venture-specific factor that affects the choice of international entry mode for a company? A) competition in local market B) level of global competition C) ability to protect proprietary technology D) corporate culture and structure

enforcing antidumping laws

Which of the following is a way in which formal institutions affect international competition? A) decreasing trade restrictions B) enforcing organizational laws C) enforcing antidumping laws D) enforcing strict exit barriers

industry growth rate

Which of the following is an external factor that affects the choice of international entry mode for a company? A) industry growth rate B) long-term strategy C) costs of making or enforcing contracts with local partners D) intent to conduct research and development with local partners

global experience of firm and managers

Which of the following is an internal factor that affects the choice of international entry mode for a company? A) potential of local market B) knowledge of local market C) industrial globalization D) global experience of firm and managers

fully owned subsidiaries

Which of the following is generally viewed as the most risky entry strategy?

establishment of the company's mission

Which of the following is the first step of the planning phase of a strategic management process? A) assessment of the external environment that the firm will face in the future B) establishment of the company's mission C) analysis of the firm's relative capabilities to deal successfully with the external environment D) seeking alternative strategies using competitive analysis

globalization of competitors

Which of the following is the most common reactive reason for a firm to extend its operations overseas? A) tax incentives B) economies of scale C) globalization of competitors D) resource access and cost savings

quality control

Which of the following is the most critical aspect of a franchising strategy?

the firm searches for less restrictive operating environments overseas

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? A) the firm searches for less restrictive operating environments overseas B) the firm responds to customers' demands more promptly C) the firm becomes entangled in lengthy litigation D) the firm expands its domestic operations

internal sources

Which of the following is the most preferred source of environmental information for environmental scanning purposes in a firm? A) computer database B) corporate clipping service C) internal sources D) information packages

rapid entry and exit from markets

Which of the following is the primary advantage of using e-business as a local-level entry strategy? A) shared costs and risks B) access to highly skilled workers C) rapid entry and exit from markets D) avoidance of tariffs and regulations

providing domestic subsidies

Which of the following most likely encourages firms to localize? A) increasing tariffs at the host country B) providing domestic subsidies C) demand for undifferentiated, standardized products D) need for economies of scale

B

Which of the following most likely provides a strategic advantage during the implementation of a global alliance? A) non-collaboration in competitively sensitive areas B) unified technology infrastructure C) centralized decision making by one partner D) high levels of competition between the partners

gain rapid entry into new market

Which of the following motivates a company to form cross-border alliances? A) to regulate and favor domestic companies B) to gain rapid entry into a new and consolidating market C) to remove exporting barriers for domestic companies D) to allow local companies to gain access to international products and services

A

Which of the following primarily determines the extent of control exercised over an IJV by its parent company? A) staffing choices for top IJV positions B) policies of the smaller firm C) cultural background D) IJV industry

A

Which of the following represents government influence on IJVs? A) copyright protection B) partnership of firm C) organization structure D) negotiation practice

strategic formulation process is part of the strategic management process in which most firms engage, either formally or informally

Which of the following statements is true of the strategic formulation process? A) The global strategic formulation process is completely independent of the process followed in domestic companies. B) The strategic formulation process is part of the strategic management process in which most firms engage, either formally or informally. C) Strategic formulation consists of four defined stages that occur in a consecutive order. D) Most firms operate on planning cycles of one or two years with periodic strategy reviews.

international joint venture

Which of the following strategies would most likely be used by a non-European company wanting to gain quick entry inside the European community? A) international joint venture B) greenfield investment C) turnkey operation D) offshoring

GLOCAL

Which of the following terms best describes a company that has operations in various countries, follows policies to develop local R&D to tailor products to markets, lets plants set their own rules, and aims at being a good corporate citizen in every country? A) GLOCAL B) global elite C) counter trade D) global commons

strategy

Which of the following terms refers to the basic means by which a company competes? A) mission B) procedure C) strategy D) process

A

Which of the following terms refers to the process by which the firm integrates and benefits from the experiences and skills learned by its employees? A) knowledge management B) employee value proposition C) employee retention D) business process outsourcing

A

Which of the following terms suggests that global sourcing can produce gains in efficiency, productivity, quality, and profitability by fully leveraging talent around the world? A) transformational outsourcing B) business process reengineering C) inverted sourcing D) lean integration

global strategic alliance

Which of the following types of alliances can be formed between a company and a foreign government? A) international joint venture B) equity strategic alliance C) non-equity strategic alliance D) global strategic alliance

foreign-exchange management

Which of the following would most likely be categorized as a global financial objective of an international firm? A) foreign-exchange management B) long-term profit growth C) quality and cost control D) company market share

B

With regard to less-developed countries, most problems with international joint ventures involve ________. A) the parent corporation B) the local partner C) differences in accounting standards between nations D) differences in control system information management between nations

Strategic alliances

________ _________ are partnerships between two or more firms that decide they can better pursue their mutual goals by combining their resources as well as their existing distinctive competitive advantages.

cooperative strategies

________ are transition mechanisms that propel the partners' strategies forward in a turbulent environment faster than would be possible for each company alone. A) Cooperative strategies B) Entry strategies C) Options strategies D) Competitive strategies

Environmental Assessment

________ includes environmental scanning and continuous monitoring to keep abreast of variables around the world that are pertinent to the firm.

licensing

________ is an ideal strategy for small businesses with few financial and managerial resources for direct investment abroad. A) A joint venture B) Licensing C) Offshoring D) A turnkey operation

C

________ is the conscious and active management of creating, disseminating, evolving, and applying facts, information, or skills acquired through experience or education, to strategic ends. A) Business continuity management B) Employee value proposition C) Knowledge management D) Employee retention

Globalization

________ refers to the establishment of worldwide operations and the development of standardized products and marketing.

A

________ refers to the processes that management puts in place in order to direct the success of the joint venture's goals. A) IJV control B) Knowledge management C) Turnkey operations D) Offshoring

Distinctive competencies

__________ ____________ represent important corporate resources or are considered key strengths; are usually difficult for competitors to imitate and represent a major focus for strategic development at the corporate level.

1) joint ventures 2) equity strategic 3) non-equity strategic

alliances fall under what 3 categories?