Lambert test #3
False
Conglomerate investments usually are rated as low risk, because foreign governments see them as providing fewer benefits to the MNC and greater benefits to the country than other investments.
False
Due to the risk of hacking, it is rare for MNCs to give their strategic partners direct access to their computer systems.
False
A franchise is an agreement that allows one party to use an industrial property right in exchange for payment to the other party.
True
A disadvantage of the international division structure is that it separates a firm's domestic and international managers, which can result in two different camps with divergent objectives.
False
A structural arrangement in which domestic divisions are given worldwide responsibility for product groups is referred to as a global area division structure.
False
Alliances and joint ventures are increasingly less-common modes of entry and operation in international business.
True
An advantage of the global area division structure is that it allows the division manager to cater to the tastes of the local market and make rapid decisions to accommodate environmental changes.
False
An advantage of the global functional division structure is that only the CEO can be held accountable for the profits.
True
An overseas operation that is totally owned and controlled by an MNC is a wholly owned subsidiary. 1
False
Comprehensive political strategies are most important in stable policy environments.
True
Centralization is a management system in which important decisions are made at the top.
False
Companies in the mature stage of international business involvement are the most likely to adopt an international division structure.
False
Companies that are in growing businesses and have broad product lines most often use a global area division structure.
According to the 2012 Transparency International Corruption Perceptions Index, which of the following is the least corrupt nation?
Denmark
False
Examples of ownership-control risks include tariffs on exports and imports, as well as restrictions on exports.
False
Firms that pursue a global product division structure typically have products that are in the maturity stage of the product life cycle.
True
Franchising provides the franchisor with a new stream of income and the franchisee with a time-proven concept and products that can be quickly brought to market.
True
Host government mandates that require foreign investors to partner with local state-owned firms or follow local-content rules may still have a positive impact on MNCs.
True
In most companies, mutual adjustment is achieved by assigning people to a specific project and having them meet face-to-face and work out a plan of action of designing the new product. 3
True
In some instances, it is not clear whether macro or micro political risk is at work.
True
In the context of international strategic alliances, value-claiming activities are competitive and distributive.
Laws that require that nations hold a majority interest in the operation are known as:
Indigenization laws
False
International political developments have a major impact on MNCs' strategic plans, and domestic political developments have a minor impact on those plans.
False
Local knowledge can be internalized primarily as a result of an MNC operating in that market.
True
MNCs are realizing that the outsourcing function can be delivered online.
False
MNCs have found that cross-functional coordination results in people spending more time within their functions and thus becoming more knowledgeable regarding developments that are occurring in their specialized areas.
________ reviews major political decisions that are likely to affect all business conducted in a particular country.
Macro political risk analysis
False
Macro risk issues often take forms such as industry regulations, taxes of specific types of business activity, and various restrictive local laws.
China's government policies regarding investment in the telecommunications industry fall into the ________ political risk category
Micro
________ risk issues often take forms such as industry regulation, taxes on specific types of business activity, and various restrictive local laws.
Micro
True
Micro political risk analysis is directed toward government policies and actions that influence selected sectors of the economy or specific foreign businesses.
True
One disadvantage of the global product division structure is the necessity of duplicating facilities and staff personnel within each division.
True
One of the main objectives in developing the structure for joint ventures is to help the partners address and effectively meld their different values and organizational preferences.
True
Operational risks result from government policies and procedures that directly constrain the management and performance of local operations.
True
Political risk is the likelihood that a multinational corporation's foreign investment will be constrained by a host government's policies.
Not all MNCs are confident about international investment in countries with:
Political unrest
Broadly, ________ strategies may include leveraging bilateral, regional, and international trade and investment agreements, drawing on bilateral and multilateral financial support, and using project finance structures to separate project exposure from overall firm risk.
Proactive political strategies
False
Since the terrorist attacks of 9/11, political risk assessment has become less vital to MNCs.
According to the 2012 Transparency International Corruption Perceptions Index, which of the following is the most corrupt nation?
Somalia
False
Specialization is the use of defined structures and systems in decision-making, communicating and controlling.
Which of the following is not a challenge of doing business in Russia?
Strong faith In government policies
True
Tensions continue to rise as U.S. politicians have become frustrated by China's unwillingness to revalue the yuan, and concerns have grown over the safety of goods imported from China
True
The combination of global integration and local responsiveness, and simultaneous commitment to global design, production, sales, and marketing integration, leaves VW as the strongest auto producer in the world and well-positioned for years to come
False
The most difficult cultural differences to manage in international strategic alliances are power distance and uncertainty avoidance.
False
There are three sectors of economic activity: the primary sector, the secondary sector, and the service sector.
True
Typically, terrorists target business areas or businesses that have high status or those that have great influence on initiating change.
True
Vertical investments run the risk of being taken over by government because they are export-oriented and governments like a business that helps it to generate foreign capital.
True
Vietnam has passed a domestic enterprise law and investment law easing and clarifying foreign investment and business rules, signed a trade agreement with the U.S., and joined the WTO.
Over the past two decades, political risk has become:
Vital areas for MNCs to access and manage
False
Volkswagen is a successful company despite the fact that it lacks technological resources.