Global Business Final T&F
During the first stage of alliance formation, a firm decides whether growth can be achieved strictly through market transactions, acquisitions, or alliances.
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Emerging MNEs primarily lack proprietary ownership of technology compared to MNEs from developed economies.
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Entrepreneurial firms can internationalize while staying in domestic markets through indirect exports.
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Entrepreneurial opportunities exist to lower transaction costs and bring distant groups of people, firms, and countries together.
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Entrepreneurs need to cultivate strong informal norms granting legitimacy to entrepreneurs.
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Equity, learning and experience, relational capabilities, and nationality are four factors that may influence alliance performance
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Ethnocentrism continues to characterize many MNEs: knowledge transfer is typically one way—from headquarters to subsidiaries via expatriates.
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Expatriates act as daily managers to run operations and to build local capabilities.
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Explicit knowledge is codifiable.
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Externally, HRM is shaped by national and industry contexts.
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Externally, MNEs are subject to the formal institutional frameworks erected by various home-country and hostcountry governments.
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Family background and educational attainment correlate with entrepreneurship.
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Family ownership and control may lead to the selection of less-qualified managers.
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Firms are allowed to organize strategic alliances with rivals for cost reduction.
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Firms that are first to introduce new goods or services are likely to earn "monopoly profits" until competitors emerge
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Firms with a high degree of resource similarity are likely to have similar competitive actions.
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Firms with fewer than 500 employees in the United States are considered small- and medium-sized enterprises.
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Foreign acquisitions are an example of an FDI entry into foreign markets.
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Foreign firms interested in becoming licensees or franchisees have to put their own capital up front.
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Formal institutions governing domestic competition are broadly guided by competition policy.
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Franchising enables SMEs to enter foreign markets.
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Greenfield operations and acquisitions have complete equity and operational control.
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In MNEs adopting the home replication strategy, knowledge is developed at the center and transferred to subsidiaries.
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In a broad sense, every supply chain is a strategic alliance involving a variety of players, each of which is a profitmaximizing, stand-alone firm.
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In entrepreneurial firms, an innovation strategy allows a potentially more sustainable basis for competitive advantage.
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In international marketing, the country-of-origin effect refers to the positive or negative perception of firms and products from a certain country.
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In order to win a predation case in the US, "an attempt to monopolize" must be proved against the accused.
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In the context of achieving alignment, if a recognized leader in a supply chain exercises power, it facilitates legitimacy and efficiency of the whole supply chain.
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In the context of alliance formation, shared capabilities is one of the driving forces in deciding whether to take a contract or an equity approach.
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In the context of market orientation vs. relationship orientation, for truly outstanding performance, relationships are necessary but not sufficient.
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Indirect export is one of the strategies used by entrepreneurial SMEs to internationalize without leaving their home country.
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Individuals who discover, evaluate, and exploit previously unexplored opportunities are referred to as entrepreneurs.
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Information asymmetries exist between principals and agents.
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Inpatriation is sometimes used for filling skill shortages at headquarters.
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International entrepreneurship is defined as "a combination of innovative, proactive, and risk-seeking behavior that crosses national borders and is intended to create wealth in organizations."
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Introducing third-party logistics (3PL) providers may more effectively align the interests in the supply chain.
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Knowledge inflow faces the common problem of "Not invented here" syndrome.
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Learning aquatic zumba is an example of tacit knowledge.
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Localization is appealing, but expensive.
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Low barriers to entry into an industry make collusion between firms difficult.
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Low-level host-country nationals, especially those in developing countries, have little bargaining power when negotiating compensation
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MNEs that engage in a transnational strategy promote global learning.
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Management of MNE structure, learning, and innovation needs to take into account VRIO
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Managerial human capital refers to some of the most valuable, rare, and hard-to-imitate skills and abilities acquired by top managers and directors.
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Managers involved in alliances require collaborative relationship skills.
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Managers need to develop firm-specific capabilities to differentiate a firm on governance dimensions and corporate finance
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Many firms phase out the international division structure after their initial stage of overseas expansion
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Market-seeking firms go to countries that have a strong demand for their products and services.
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Marketing and supply chain management activities can be evaluated based on the VRIO criteria.
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Mergers and acquisitions represent the largest proportion of foreign direct investment (FDI) flows.
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Microfinance emerged in response to the lack of financing for entrepreneurial opportunities in many developing countries.
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Middle-aged expatriates are the most expensive, because the employer often has to provide a heavy allowance for children's education
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Minimizing an opponent's awareness, motivation, and capabilities is more likely to result in successful attacks.
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Most inpatriates are expected to eventually return to their home country to replace expatriates.
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Non-equity modes do not require the establishment of independent organizations overseas.
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One hallmark of entrepreneurial growth is a dynamic, flexible, guerrilla strategy.
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One of the disadvantages of having strategic alliances is potential partner opportunism.
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One of the late-mover disadvantages is the establishment of entry barriers by the first-mover.
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One of the leading indicators of concentrated family ownership and control is the appointment of family members as board chairman, CEO, and other TMT members
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One way of combating opportunism in an alliance is to wall off critical capabilities.
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Owners, managers, and boards of directors are collectively known as the "tripod" of corporate governance.
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Patenting adds value to a firm's resources when engaging with rivals.
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Price elasticity refers to the changes in demand when price changes.
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Principal-agent conflicts result in agency costs.
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Prisoners' dilemma is a type of game in which the outcome depends on two parties deciding whether to cooperate or to defect.
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Ranging from entrepreneurial start-ups to multinational enterprises (MNEs), all firms need to raise capital.
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Returning expatriates may experience a loss of status.
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Shareholders purchase stock both for dividends and for the growth potential of the stock.
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Since the 1980s, American managers have become much more focused on stock prices, resulting in "shareholder capitalism."
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Staffing, training and development, compensation and performance appraisal, and labor relations are main areas of HRM.
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Strategic goals and cultural and institutional distances influence the location of foreign entries.
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Strategic investments in an equity-based alliance involve one partner investing in another.
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The "best fit" school argues that a firm needs to search for the best external and internal fit.
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The "imitability" of an alliance is based on the trust and understanding between the partners.
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The "leverage" in the LLL framework focuses on an MNE's deep understanding of its customer needs and wants.
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The Anglo-American and the continental European-Japanese systems are the two primary corporate governance families in the world.
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The International Trade Administration investigates antidumping cases in the United States.
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The New York Stock Exchange (NYSE) and NASDAQ have a lot of non-US firms listed. This is an example of crosslisting.
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The United States has the world's oldest antitrust frameworks dating back to the 1890 Sherman Act.
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The alliance dissolution is a four-step process
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The antitrust policies in the United States make it difficult for incumbents to raise entry barriers for new entrants.
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The best way to reduce expatriate turnover is a career development plan
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The board of directors oversees and ratifies strategic decisions and evaluates, rewards, and, if necessary, penalizes top managers
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The board of directors' effectiveness in serving the control function stems from their independence, deterrence, and norms
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The defender strategy centers on local assets in areas in which MNEs are weak.
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The degree of tacitness is low in non-equity-based alliances.
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The global standardization strategy lacks local responsiveness.
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The growth of an entrepreneurial firm can be viewed as an attempt to more fully use currently underutilized resources and capabilities
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The home replication strategy duplicates home country-based competencies in foreign countries.
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The informal institution-based view that stresses the cognitive pillar is centered on the internalized taken-for-granted values and beliefs that guide firm behavior
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The integration-responsiveness framework allows managers to deal with the pressures for both global integration and local responsiveness.
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The international division structure is an organizational structure typically set up when a firm first engages in a home replication strategy.
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The market for corporate control enables the "wholesale" removal of entrenched managers.
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The minimization of principal-agent conflicts through concentration of ownership and control, unfortunately, introduces more principal-principal conflicts
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The more tacit the capabilities of a firm in an alliance, the greater the preference for equity involvement.
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The preemption of scarce resources is a first-mover advantage.
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The price leader in a market possesses the capacity to punish.
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The relationship between strategy and structure is reciprocal.
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The resource-based view argues that foreign firms need to deploy overwhelming resources and capabilities to offset their liability of foreignness.
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The scale of entry refers to the amount of resources committed to entering a foreign market.
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The term "HRM" indicates that people are key resources of the firm to be actively managed and developed.
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The term "supply chain" is almost synonymous with "value chain," encompassing both inbound and outbound logistics.
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The vast majority of large firms throughout continental Europe, Asia, Latin America, and Africa feature concentrated family ownership and control.
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The word "entrepreneurs" mostly refers to founders and owners of new businesses or managers of existing firms.
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Total cost of ownership is often explicitly evaluated prior to purchase decisions
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Whether entrepreneurship is facilitated or retarded significantly depends on formal institutions governing how entrepreneurs start up new firms.
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. In state-owned enterprises, citizens have the rights to enjoy dividends generated from SOE
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A build-operate-transfer (BOT) agreement is an equity mode of entry
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A disadvantage of licensing is high development costs.
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A firm that exports or imports, with or without FDI, is regarded as an MNE.
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A letter of credit increases transaction costs by increasing transaction risks.
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A low degree of market commonality suggests that if a firm attacks in one market, its rivals may engage in crossmarket retaliation.
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A psychological contract is a written contract signed by the employer and the expatriation candidate.
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A supply chain can't be changed after it is established.
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A voice-based mechanism indicates that shareholders no longer have patience and are willing to "exit" by selling their shares.
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Absorptive capacity refers to the informal benefits that individuals and organizations derive from their social structures and networks.
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According to the stage model, firms will enter culturally distant countries for their first internationalization.
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Accurately measuring the inflows and outflows of tacit and explicit knowledge is process oriented and easy to achieve.
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Acquisition premium is the difference between the acquisition price and the market value of the acquiring firm.
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Adaptability in supply chain management refers to the ability to quickly react to unexpected shifts in supply and demand
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Agency relationship refers to the relationship between different shareholders.
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Agility refers to the ability to change supply chain configurations in response to longer-term changes in the environment and technology
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Alliances preclude acquisitions.
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An MNE with transnational strategy typically staffs host-country nationals
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An industry with heterogeneous products, in which rivals are forced to compete on price, is likely to lead to collusion
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An industry without a price leader makes it easier for firms in that industry to form collusions.
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An institution-based view suggests that firm-specific resources and capabilities largely determine entrepreneurial success and failure
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Antitrust authorities provide easy approvals for both alliances and acquisitions with less intervention.
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Antitrust laws are only applicable to foreign firms.
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Becoming a licensee or franchisee of a foreign brand does not internationalize the licensee or franchisee firm.
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Blue ocean strategy focuses on attacking core markets defended by rivals.
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Collusion is more difficult between firms with high market commonality than firms with low market commonality.
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Collusive price setting refers to price setting by monopolists or collusion parties at a level lower than the competitive level.
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Compared to large firms, innovators at SMEs have limited ability to personally profit from their innovations because property rights usually belong to the corporation
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Contractual alliances involve sharing of ownership.
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Cost pressures often push MNEs to adapt locally.
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Cross-border mergers are more common than acquisitions.
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Direct exports are the sale of products made through export intermediaries.
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Domestic transaction costs are qualitatively higher than international transaction costs.
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During the Industrial Revolution, residual service activities was often the secondary sector for organized economic activities.
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Enhancing agility often entails making a series of make-or-buy decisions.
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Equity alliance relationships tend to have less direct control over joint activities on a continual basis than contractual relationships.
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Equity modes tend to reflect relatively smaller commitments to overseas markets, whereas non-equity modes are indicative of relatively larger, harder-to-reverse commitments.
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Equity-based alliances include co-marketing, research and development, contracts, turnkey products, strategic suppliers, and strategic distributors.
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Ethnocentrism should be encouraged in international marketing.
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European MNEs are more likely to appoint PCNs to lead subsidiaries.
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Every alliance or acquisition decision is driven by imitation.
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Firms dealing with global agnostics can leverage global brands and their relatively more standardized products and services
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Firms with strong patents can challenge rivals for infringements, making mutual forbearance impossible.
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Fitnit and Fittin' are firms engaging in explicit collusion when they indirectly coordinate actions by signaling their intention to reduce output and maintain pricing above competitive levels.
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Flow of knowledge is limited in the home replication strategy.
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For equity, the cost of capital is the interest.
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Foreign direct investment is the only way in which SMEs can enter foreign markets.
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Formal government policies regarding entry mode requirements are generally becoming more conservative.
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Franchising is typically used in manufacturing industries.
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From a corporate governance perspective, the market for corporate control complements product market competition and the market for private equity
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From a resource-based view, explicit knowledge is strategically more important than tacit knowledge.
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Global standardization or transnational strategies often necessitate an ethnocentric approach, resulting in a mix of HCNs, PCNs, and TCNs.
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Greenfield operations are a type of wholly owned subsidiary that does not require any FDI.
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Importance of direct organizational monitoring and control is low in equity-based alliances.
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In a transnational strategy, the flow of knowledge is unidirectional.
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In developed economies, a firm's key concern is to enhance competitiveness to fight off low-cost rivals from emerging economies.
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In firms with separation of ownership and control, ownership is concentrated with a few owners.
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In general, governments in developed economies impose more procedures to start a company than those in poorer countries.
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In general, the failure rates of expatriates are very low
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In the United States, unionized employees earn less than non-unionized employees.
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In the context of achieving alignment, supply chain members of less standing exercise greater bargaining power.
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In the context of acquisitions, synergistic motives destroy value while hubris and managerial motives add value
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In the context of internal governance mechanisms, if accounting-based measures are adopted, stock prices are subject to too many forces for a manager to manipulate the price
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In the context of market orientation vs. relationship orientation, relationship orientation capabilities contribute more toward performance.
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In the context of segmentation based on customer categories, global citizens are always skeptical about whether global brands deliver high quality goods.
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In the context of segmentation based on customer categories, global dreamers are most likely to lead antiglobalization demonstrations.
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In the first half of the 20th century, the services sector was more important than manufacturing.
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In the principal-agent relationship, agents are owners who delegate authority.
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In the principal-agent relationship, principals are managers to whom authority is delegated.
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In this age of globalization, customers don't discriminate against foreign firms
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Indirect exports are the most basic mode of entry, capitalizing on economies of scale in production concentrated in the home country.
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Industrial parks refer to the clustering of economic activities in certain locations.
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Influence of formal institutions is low in both equity- and non-equity-based alliances.
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Informal social capital hinders knowledge management.
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Innovation-seeking firms often single out the most efficient locations featuring a combination of scale of economies and low cost factors.
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Innovations flow only from the host countries to the home country in a transnational strategy.
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Inside directors are more independent and can better safeguard shareholder interests.
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Integrating individuals from two (parent and host) countries is a lot more complex than molding managers from a variety of nationalities.
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It is impossible to internationalize without venturing abroad.
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Knowledge retention faces the common problem of absorptive capacity.
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Late movers face greater technological and market uncertainties.
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Liability of foreignness is the inherent disadvantage firms experience in home countries.
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Licensing and franchising are examples of equity modes of entry.
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Licensing is a form of equity-based alliance.
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Licensing is mostly used in the service industries.
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Local responsiveness makes local customers and governments happy and helps decrease costs.
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Location-specific advantages never change and only tend to grow.
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MNEs dealing with global dreamers can market localized products and services under local brands.
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MNEs hire only host-country nationals to work at a local subsidiary.
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MNEs intend to eventually replace even top-level expatriates with TCNs, in part to save cost.
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Making a rival aware of an attack makes it easier for the attacker to achieve its objective.
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Market commonality refers to the degree of similarity between two rival's products.
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Market for private equity is also known as the takeover market.
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Market orientation is the effort to establish, maintain, and enhance relationships with customers.
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Mutual forbearance refers to retaliatory attacks on a competitor's other markets if this competitor attacks a firm's original market.
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Non-equity modes of entry include acquisitions and wholly-owned subsidiaries.
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One of the advantages of being a first-mover is the opportunity to free ride on late-mover investments.
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One of the disadvantages of the geographic area structure is that the country and regional managers are not given sufficient voice relative to the heads of the domestic divisions.
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Owners, managers, and employees at large firms tend to be more innovative and take more risks than those at entrepreneurial firms.
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PCNs generally stay in their positions longer and thus provide more continuity of management.
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Performance appraisals are given only when an employee is not performing well.
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Price leader is a firm that sets the highest price in the industry
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Private equity utilizes the stock market, as opposed to the bond market, to discipline managers.
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Proponents of the "best practices" school argue that firms should adopt "best practices" with respect to certain contexts
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Repatriation, if not managed well, can be traumatic for expatriates and their families, but not for the firm
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SMEs are the exclusive domain of entrepreneurship.
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SMEs tend to be less entrepreneurial than large firms.
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Social capital is the ability to recognize the value of new information, assimilate it, and apply it.
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Standardized promotion helps project a globally consistent message, but is expensive.
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Subsidiary initiatives are new opportunities pursued by a subsidiary based on headquarters' demands.
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Sweden has the lowest venture capitalist investment in the world.
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Tacit collusions typically lead to a cartel or trust.
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The "O" in the VRIO framework indicates opportunity.
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The American antitrust policy is pro-incumbent and pro-producer.
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The advantage of hiring employees who are host-country nationals is that it facilitates control by headquarters.
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The advantage of hiring employees who are parent-country nationals is that they bridge the gap between headquarters and the subsidiary.
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The amount of dividend a firm pays its shareholders is always fixed.
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The existence of multiple currencies and the resultant currency risks can be viewed as informal trade and investment barriers.
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The first phase in an alliance dissolution is mediation by third parties.
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The formal institution-based view that drives mergers and alliances is based on the normative and cognitive pillars.
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The four Ps of marketing are: product, price, positioning, and place.
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The geographic area structure is appropriate for a transnational strategy.
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The global product division structure organizes the MNE according to different geographic areas.
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The global standardization strategy, despite its complexity, is still the best option at being cost effective, locally responsive, and learning-driven.
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The going rate approach is the most widely used method in expatriate compensation.
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The initial compensation of an expatriate is determined by performance appraisal.
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The institution-based view argues that among a number of firms governed by the same set of rules, some excel more than others because of differences in firm-specific capabilities that leverage advantage in corporate governance
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The leading US union, the AFL-CIO, expanded into Mexico in the 1990s.
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The lowest intensity of rivalry between competitors is the result of high resource similarity and low market commonality.
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The majority of an MNE's employees are typically parent-country nationals.
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The non-equity mode of indirect exports has better control over distribution than direct exports.
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The resource-based view suggests that firms need to take actions deemed legitimate and appropriate by the various formal and informal institutions governing market entries.
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The staffing choices in an MNE are always random.
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The strategy that centers on a firm expanding overseas is called the dodger strategy.
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The terms knowledge management and information management can be used interchangeably.
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The three potential motives for alliances are synergistic, hubristic, and managerial motives.
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The transnational strategy is usually the easiest strategy for an MNE to implement and the first one adopted when the firm ventures abroad.
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The triple As underpinning supply chain management are agility, adaptability, and aggregation.
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To reach the top at most MNEs today, international experience is considered optional.
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Tunneling is a legal method of solving principal-principal conflicts.
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Turnkey projects cannot be established without FDI.
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Voice-based governance mechanisms are external mechanisms.
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When MNEs adopt a localization strategy, the interdependence on knowledge management is high
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Within a single product category, product attributes are standardized.
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Cultural distance is the difference between two cultures along some identifiable dimensions
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Cultural values and norms are examples of informal institutions.
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. Other than families, the state is another major owner of firms around the world.
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. The global account structure and solutions-based structure are two of the primary customer-focused dimensions of an MNE.
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A firm can internationalize by becoming a supplier for a foreign firm that is doing business in the domestic market
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A global matrix structure alleviates the disadvantages associated with both geographic area and global product division structures.
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A joint venture (JV) is a form of equity-based alliance.
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A localization strategy is effective when differences among national and regional markets are clear, and pressures for cost reductions are low
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A real option enables the investor to buy an option for a small initial investment, hold it until a decision point arrives, and then exercise or abandon the option.
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According to the economic theory of supply and demand, a drop in price generates stronger demand.
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According to the resource-based view, holding institutions constant, firms that develop the best capabilities in marketing and supply chain management will emerge as winners.
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According to the resource-based view, the entrepreneurial resources must have inimitable resources to be successful.
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Agglomeration explains why certain cities and regions can attract businesses even in the absence of obvious geographic advantages.
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Agility focuses on flexibility that can overcome short-term fluctuation in the supply chain.
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Alignment refers to the grouping of interests of various players involved in the supply chain.
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Alliances have emerged as great instruments of real options because of their flexibility to sequentially scale up or scale down investment.
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Alliances permit firms to sequentially increase their investment should they decide to pursue acquisitions.
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Although the word "product" originally referred to a physical product, its modern use has included services.
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An acquisition is an example of a wholly owned subsidiary.
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An advantage of joint ventures is the shared costs, risks, and profits.
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An ethnocentric approach emphasizes the norms and practices of the parent company and the parent country of the MNE
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Antitrust policies aim to balance efficiency and fairness in trade.
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As a key element in achieving alignment, trust stems from perceived fairness and justice from all supply chain members.
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As one of the Ps in the marketing mix, place is also often referred to as the distribution channel.
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Both formal and informal institutional constraints, as rules of the game, affect entrepreneurship.
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Brazil has the lowest level of informal investment in the world.
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Cartel is an output- and price-fixing entity involving multiple competitors.
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Cartels are often labeled as anticompetitive and outlawed by antitrust laws.
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Co-marketing has the ability to reach more customers but with limited control and coordination.
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Combining resource similarity and market commonality helps yield a framework of competitor analysis for any pair of rivals
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Companies with diffused ownership have a separation of ownership and control.
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Competitive dynamics are the actions and responses undertaken by competing firms.
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Cross-shareholding is based on financial interest between the firms.
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