exam 2 bapa

Which of the following is true about cross-border contractual relationships It is a more visible strategy than FDI and draws a lot of criticism from the local market. They are more susceptible to volatility and risk compared to FDI. A local firm allows the focal firm to blend into the local market, attracting less attention. Focal firms use contractual relationships as an advanced entry strategy in foreign markets.

A local firm allows the focal firm to blend into the local market, attracting less attention

Which of the following statements is true of leasing? It is an arrangement in which a contractor supplies managerial know-how to operate a hotel, hospital, airport, or other facility in exchange for compensation. It is a high-risk and high-cost method of entering a foreign market. A major advantage for the focal firm is the ability to gain quick access to target markets, while putting assets to use in earning profits. The lessor transfers ownership of the property in exchange for a lump-sum payment.

A major advantage for the focal firm is the ability to gain quick access to target markets, while putting assets to use in earning profits.

A firm's headquarters is the primary contributor to ________. human resource management capital planning local market research compliance with local laws and regulations

capital planning

A firm would be compelled to seek global integration when it has to ___ adjust to cultural differences capitalize on converging consumer trends and universal needs cater to local customer needs accommodate differences in distribution channels

capitalize on converging consumer trends and universal needs

Which of the following is a characteristic of an equity joint venture? simple management structure lesser exposure to political risk easy to terminate facilitates knowledge transfer between partners

facilitates knowledge transfer between partners

Area studies refer to ________ technical knowledge pertaining to a firm's core competencies factual knowledge of the historical, political, and economic environment of the host country knowledge pertaining to daily living abroad factual knowledge about a firm's foreign subsidiaries

factual knowledge of the historical, political, and economic environment of the host country

All of the following are criteria most likely established by CCC managers for choosing the best foreign business partner EXCEPT ________. requirement for competent management skills and qualified staff good connections with the Australian government knowledge about the food and beverage industry familiarity with U.S. government franchising regulations

familiarity with U.S. government franchising regulations

Which of the following industries considers proximity to customers especially important in the decision to enter a foreign market? mining automotive biotechnology fashion

fashion

Which of the following is an example of a multidomestic industry? telecommunications chemicals aerospace fashion

fashion

A firm most likely enters the home market of a foreign competitor in order to ___ enter a collaborative venture with the competitor force the competitor to expend resources to defend its market gain access to the competitor's government contracts interfere with the competitor's marketing campaign

force the competitor to expend resources to defend its market

A car rental agency that was planning to internationalize its operations would most likely select a(n) _______ franchisor licensor distributor intermediary

franchisor

A ________ strategy is characterized by substantial control over country operations by headquarters in order to increase efficiency and integration global home replication multilocal multidomestic

global

A ________ is the firm's integrated network of sourcing, production, and distribution, organized on a worldwide scale and located in countries where competitive advantage can be maximized. decision making unit global supply chain demand chain buying center

global supply chain

In international business, firms frequently formulate market segments by ________. grouping competitors based on their hiring strategies selling only those products that create derived demand for other related products in the market grouping countries based on macro-level variables grouping identical customers in underground economies

grouping countries based on macro-level variables

Which of the following refers to a risk, stemming from environmental factors, that is closely associated with global sourcing? weak intellectual property laws high energy costs overreliance on suppliers rapid turnover of skilled employees

high energy costs

A type of countertrade in which goods are directly exchanged without the transfer of any money barter compensation deals counterpurchase buy-back agrement

barter

Which of the following is most likely a disadvantage to firms who use exporting as an entry strategy? difficulties withdrawing from foreign markets high risk of low sales due to fluctuations in exchange rates high risk due to uncertainty in the political environment of the foreign market high cost of foreign market entry

high risk of low sales due to fluctuations in exchange rates

Which of the following is the most critical asset of any organization? human capital bonds computer programs goodwill

human capital

An industrial design is intended to _______ protect firms from intellectual property theft improve a product's performance and marketability protect information of commercial value eliminate the possibility of the design being copied

improve a product's performance and marketability

In order to estimate industry market potential, managers most likely require ________. manufacturing specifications and production output market size and growth rates specific to the industry anticipated improvements within public infrastructure expected long-term IT needs and e-commerce trends

market size and growth rates specific to the industry

Taken together, the key elements of a company's marketing program are known as the _____ product lifecycle marketing mix value chain product mix

marketing mix

A(n)________ is a special type of acquisition in which two companies join to form a larger firm. wholly owned direct investment acquisition greenfield investment merger

merger

Which of the following is an advantage of a multidomestic strategy? minimum redundancy low operating costs standardized organizational culture minimal pressure on headquarters staff

minimal pressure on headquarters staff

A consortium is defined as ________. multiple partners participating on a large-scale project two partners forming a new legal entity an equity venture to consolidate the value chain the purchase of an existing company or facility

multiple partners participating on a large-scale project

Which of the following is NOT provided by the licensor? technical information and assistance ongoing managerial guidance an advisory role trademark

ongoing managerial guidance

The procurement of selected value-adding activities, including production of intermediate goods or finished products, from independent suppliers is known as ________. outsourcing licensing offshoring franchising

outsourcing

Which of the following is an essential method used by a focal firm to protect its intellectual property in a foreign country? bribing foreign government officials avoiding trade in countries with weak intellectual property laws password-based security systems lobbying foreign governments for stronger intellectual property laws

password-based security systems

The term industry market potential can best be defined as the ________ forecast of a firm's sales in a specific market expected competition within a foreign market predicted industry sales over a particular period of time anticipated market growth and expansion

predicted industry sales over a particular period of time

in a system franchising agreement, the franchisor provides ________. sale of related products lump-sum payment down-payment plus royalty production and marketing methods

production and marketing methods

"the researcher uses known information about one product category to infer potential about another product category, especially if the two are complementary." analogy proxy indicators tets marketing market segmentation

proxy indicator

Which of the following services cannot be exported insurance services pure services education construction

pure services

All of the following are international labor trends EXCEPT _____ rapidly increasing union membership in most advanced economies more mobile labor force formation of global alliances by national labor unions increase in immigration

rapidly increasing union membership in most advanced economies

When outsourcing, managers can minimize the risk of creating employee tension by _______ reaching a consensus of managers and labor sending domestic managers to foreign countries for training increasing the annual training budget increasing the number of junior managers for foreign assignments

reaching a consensus of managers and labor

Which of the following is management's goal when utilizing gradual elimination? decrease the need for foreign intermediaries to improve profitability reduce the number of nations to investigate as potential foreign markets diminish the number of foreign markets served by a large MNE lessen the number of corporate managers involved in subsidiary issues

reduce the number of nations to investigate as potential foreign markets

A focal firm's overreliance on suppliers can potentially lead to ___ consolidation of the focal firm's network of intermediaries added competitive advantage for the focal firm an excessive burden on home-country suppliers reduced control over important value-chain tasks

reduced control over important value-chain tasks

Which of the following is the term used to describe an expatriate's return to his/her home country following completion of a foreign assignment? repatriation reverse culture shock codetermination national integration

repatriation

Which of the following best characterizes the concept of global integration? Effective global competition requires that products be specialized Creating variations of the same product for different markets is an unnecessary expense. The differences in market-to-market distribution channels must be accommodated. Making adjustments for unique markets is an essential element of international business.

Creating variations of the same product for different markets is an unnecessary expense.

___ refers to the confusion and anxiety experienced by a person who lives in a foreign culture for an extended period. Culture shock Enculturation Segregation Culture pluralism

Culture shock

Which of the following is a trend seen in the modern international economy? Companies primarily use acquisitions to enter foreign markets. Firms in the service sector use e-commerce exclusively to enter foreign markets. Emerging markets are the sole recipient countries for FDI. Firms from both advanced and emerging economies employ FDI.

Firms from both advanced and emerging economies employ FDI.

Global Sourcing Debate (Scenario)Prof. Sean Peterson's class of international business has been studying the controversies surrounding global sourcing. Prof. Peterson divided the class into two groups, A and B. Group A was assigned the task of defending global sourcing, whereas Group B was assigned the task of arguing against global sourcing.Which of the following propositions would most likely be presented by Group B? Global sourcing is usually undertaken by focal firms to increase efficiency. Global sourcing adversely affects national competitiveness. Global sourcing improves the efficiency of manufacturing firms. Global sourcing empowers workers in general.

Global sourcing adversely affects national competitiveness.

Which of the following is true with regard to global sourcing? Global sourcing has declined significantly in the current phase of globalization. Global sourcing is a low-control strategy in which the focal firm sources from independent suppliers through contractual agreements. Global sourcing does not represent the firm's initial involvement in international business. Global sourcing refers to the relocation of a business process or entire manufacturing facility to a foreign country.

Global sourcing is a low-control strategy in which the focal firm sources from independent suppliers through contractual agreements

Which of the following is true with regard to the risks of global sourcing? Inadequate legal systems, red tape, convoluted tax systems, and complex business regulations complicate local operations in many countries. Global sourcing weakens competition leading to a considerably risk-free international business environment. Firms that source from countries whose currencies are strengthening experience lower costs. Environmental challenges exclude currency fluctuations, tariffs and other trade barriers, high energy and transportation costs.

Inadequate legal systems, red tape, convoluted tax systems, and complex business regulations complicate local operations in many countries.

Which of the following is an advantage of an international division structure? It requires a small resource commitment. It allows concentration and development of international expertise. It leverages the benefits of global strategy while responding to local needs. It allows better balance between global integration and local adaptation.

It allows concentration and development of international expertise.

Which of the following statements is true of infringement of intellectual property? The most commonly counterfeited goods include heavy machinery and computer manufacturing. Counterfeiting and piracy can be particularly troublesome in advanced economies because of subjective ethical standards. It is the ability to control important intellectual property before it reaches competitors. It amounts to piracy and takes the form of production and distribution of counterfeit goods

It amounts to piracy and takes the form of production and distribution of counterfeit goods.

Which of the following is an advantage of exporting? It is a high-control strategy that requires substantial resource commitment when compared to equity joint ventures. It increases overall sales volume, improves market share, and reduces per-unit costs of manufacturing. It minimizes exposure to tariffs and other trade barriers, as well as fluctuations in exchange rates. It allows focal firms to attain maximum control by establishing ownership of key assets in the foreign market.

It increases overall sales volume, improves market share, and reduces per-unit costs of manufacturing.

Which of the following is an advantage of licensing? It requires very little capital investment in the foreign market. It is ideal for products, services, or knowledge that is highly complex. It is easy to maintain control over how the licensed asset is used. It guarantees a basis for future expansion in the market.

It requires very little capital investment in the foreign market.

Which of the following is true about franchising as an entry strategy It restricts a firm's ability to expand more rapidly abroad. It is an ownership-based international business activity. It provides firms with minimum control over foreign operations. It is typically characterized as an unstable, short-term entry strategy.

It restricts a firm's ability to expand more rapidly abroad.

Which of the following is necessary for local responsiveness to effectively increase a firm's competitiveness? Corporate executives must standardize marketing and merchandising. Local managers need to be able to make decisions based on local needs. A firm's bankers and financial managers must be locally based. Employees must be hired and trained only within a local region.

Local managers need to be able to make decisions based on local needs

__ is an arrangement in which a contractor supplies managerial know-how to operate a hotel, hospital, airport, or other facility in exchange for compensation. Build-operate-transfer Leasing Exporting Management contract

Management contract

Which of the following is true with regard to offshoring? Offshoring substantially reduces the overall efficiency of MNEs. With rapid globalization and internationalization of businesses, offshoring is a visibly declining trend. Russia is the current leader in the processing of advanced economies' relocated business services. Offshoring is common in the service sector, including banking, software code writing, legal services, and customer-service activities.

Offshoring is common in the service sector, including banking, software code writing, legal services, and customer-service activities.

The likelihood of internalizing ________ rather than outsourcing it is considerably high. manufacturing of parts R&D sales and distribution customer service

R&D

Which of the following statements is true with regard to the R&D activities of a firm? R&D activities have a low likelihood of being internalized. R&D activities have a high likelihood of being outsourced. As a strategic asset, R&D activities are of moderate importance to the firm. R&D activities are usually concentrated at home.

R&D activities are usually concentrated at home.

ABC Appliance (Scenario)The ABC Appliance Corporation is a Florida-based manufacturer of refrigerators, dishwashers, and other large household appliances. ABC takes advantage of NAFTA, and as a result, the firm has loyal customers across North America. ABC managers would like to expand into the Asian market, but are unsure of the best way to do so. ABC managers are meeting to discuss various possibilities for entering the Asian market.Which of the following most likely supports a decision to enter the Asian market by building a factory near Tokyo? ABC managers want to delegate responsibility of much of the Japanese plant to local intermediaries. The Japanese yen has been fluctuating over the last year and analysts do not anticipate it settling down. Executives at ABC want the firm to have the flexibility to reconfigure operations at the Japanese plant. The CEO of ABC is willing to invest a large amount of capital and other assets to ensure success in Japan

The CEO of ABC is willing to invest a large amount of capital and other assets to ensure success in Japan

Wonder Cat Licensing (Scenario)Wonder Cat is a popular, new cartoon series created by the U.S-based All Cartoon Channel (ACC). Currently, the only Wonder Cat item available for sale are shirts that are sold exclusively through the ACC Web site. The cartoon series is a big hit in China, and as a result ACC has been approached by a Chinese firm about a licensing agreement. ACC executives are considering the pros and cons of such an agreement before making any final decisions.Which of the following statements most likely supports an ACC decision to enter into a licensing agreement with the Chinese firm?China exclusively opts for high-control strategies such as FDI. Royalties from toys and apparel would be initially minimal. The Wonder Cat brand's products could be easily counterfeited in other markets except in the Chinese markets. The Chinese government restricts complete ownership of local operations by foreign firms

The Chinese government restricts complete ownership of local operations by foreign firms.

Which of the following challenges is applicable to the franchisee in a franchising agreement? The franchisor holds much power, including superior bargaining power. The franchisee must make their own arrangements to acquire initial training and know-how. There is decreased likelihood of business success. There is no scope to operate an independent business

The franchisor holds much power, including superior bargaining power.

Which of the following is true about global teams? Operational global teams identify or implement initiatives that enhance the long-term direction of the firm in its global industry. It is a locally distributed group of employees charged with specific problem solving that affects company operations at the domestic scale. To develop global strategies, the team should include culturally diverse managers whose business activities span the globe. Strategic global teams focus on the efficient and effective operation of the business across the whole network.

To develop global strategies, the team should include culturally diverse managers whose business activities span the globe.

Which of the following is true with regard to strategies for minimizing the risks of global sourcing To ensure the success of sourcing ventures, the focal firm must exercise great care to identify and screen potential suppliers and then monitor the activities of those suppliers from which it sources. Because production quality in an emerging market rarely varies over time, managers at the focal firm are not obliged to closely monitor manufacturing processes. Firms must refrain from maintaining their own sourcing operations abroad in order to trim costs and minimize risks stemming from frequent currency fluctuations. To maximize returns and minimize risks, management should outsource core business operations.

To ensure the success of sourcing ventures, the focal firm must exercise great care to identify and screen potential suppliers and then monitor the activities of those suppliers from which it sources.

ABC Appliance (Scenario)The ABC Appliance Corporation is a Florida-based manufacturer of refrigerators, dishwashers, and other large household appliances. ABC takes advantage of NAFTA, and as a result, the firm has loyal customers across North America. ABC managers would like to expand into the Asian market, but are unsure of the best way to do so. ABC managers are meeting to discuss various possibilities for entering the Asian market.Which of the following should most likely be considered in making the decision to expand ABC operations into the Asian market? What technological and managerial know-how can ABC gain from an Asian expansion? How will domestic competitors of ABC react to an international expansion? How many managers will need to relocate to Asia to oversee the Asian project? How will ABC utilize the Internet to achieve success in the Asian market?

What technological and managerial know-how can ABC gain from an Asian expansion?

In a licensing agreement, the licensee provides ___ a combination of down-payment plus royalty intellectual property, technical information and assistance the know-how and supporting products such as, raw materials and components the rights to use its industrial design

a combination of down-payment plus royalty

Which of the following is provided by the licensor in a licensing agreement? a combination of intellectual property and technical information and assistance a combination of a lump-sum payment and the intellectual know-how a monetary down-payment plus royalties for all products sold locally a storefront or facility and the necessary materials to make the product

a combination of intellectual property and technical information and assistance

Which of the following is an example of a market-seeking motive for FDI? a company intends to avoid trade barriers a company wishes to gain access to knowledge a firm wishes to gain access to raw materials a firm follows its key customers abroad

a firm follows its key customers abroad

A global market segment refers to _____ a group of customers who share similar characteristics across many national markets a group of less-affluent customers in the global market a group of buyers in the international market who are largely unaffected by changes in pricing a group of customers belonging to the same generational group within a country

a group of customers who share similar characteristics across many national markets

A cross-border contractual relationship provides the focal firm with ________ over the foreign a low level of control a moderate level of control a high level of control seldom any control

a moderate level of control

A cross-border contractual relationship provides the focal firm with ________ over the foreign partner. a high level of control a moderate level of control seldom any control a low level of control

a moderate level of control

Strategy is _____ the pattern of shared values, behavioral norms, systems, policies, and procedures that employees learn and adopt a planned set of actions that managers employ to make the best use of the firm's resources and core competencies to gain competitive advantage a quality of executive management that provides inspirational guidance and motivation to personnel, leading the firm to a better future the procurement of selected value-chain activities, including production of intermediate goods or finished products, from independent suppliers

a planned set of actions that managers employ to make the best use of the firm's resources and core competencies to gain competitive advantage

Company-owned subsidiary is ________. Selected Answer: a representative office of the focal firm that handles marketing, physical distribution, promotion, and customer service activities in the foreign market typically achieved by contracting with intermediaries located in the foreign market a foreign intermediary that serves as an extension of the exporter, negotiating on behalf of the exporter and assuming such responsibilities as local supply-chain management, pricing, and customer service accomplished by contracting with intermediaries located in the firm's home market

a representative office of the focal firm that handles marketing, physical distribution, promotion, and customer service activities in the foreign market

Which of the following is a characteristic of project-based, non-equity ventures? a specific agenda and timeframe long-term sharing of resources a broad scope of product development formation of a new legal entity

a specific agenda and timeframe

A firm that develops the capacity to sell its products by investing in marketing and selling operations is ________. acquiring upstream value-chain facilities engaging in decentralization engaging in centralization acquiring downstream value-chain facilities

acquiring downstream value-chain facilities

the purchase of an existing company or facility is known as a(n) ________. equity joint venture acquisition greenfield investment licensing

acquisition

Professional service firms, such as PriceWaterhouseCooper, often enter large international markets through FDI but usually use ________ to enter small markets. equity-based collaborative ventures turnkey contracting affiliates BOT arrangement

affiliates

The purpose of intellectual property rights is to ________. allow inventors monopoly advantage for a specified period of time grant a firm permission to use another firm's proprietary names allow a firm to use an entire business system in exchange for compensation prevent excessive regulation and government bureaucracy

allow inventors monopoly advantage for a specified period of time

Global sourcing becomes a catalyst to overhaul organizational processes and company operations and increases the firm's overall competitive advantages by ________. encouraging firms to train unskilled labor through extensive training programs relaxing quality standards installing a system of rewards to motivate employees allowing firms to free expensive analysts, engineers, and managers from routine tasks to spend more time on high-value-adding activities

allowing firms to free expensive analysts, engineers, and managers from routine tasks to spend more time on high-value-adding activities

Contract manufacturing can best be defined as ____ sourcing from the firm's own production facilities the outsourcing to independent suppliers of business service functions such as accounting, payroll, human resource functions, travel services, IT services, customer service, or technical support an arrangement in which the focal firm contracts with an independent supplier to manufacture products according to well-defined specifications the relocation of a business process or entire manufacturing facility to a foreign country

an arrangement in which the focal firm contracts with an independent supplier to manufacture products according to well-defined specifications

Which of the following best exemplifies corporate social responsibility? a telecommunications firm charging high-rates to low-income customers a computer firm charging a high fee for recycling old computers an automobile manufacturer selling low-fuel economy cars and trucks an automotive battery firm offering free technical training to students of a deprived community

an automotive battery firm offering free technical training to students of a deprived community

Which of the following is a characteristic of successful international retailers? significant financial borrowings and high foreign and domestic operational costs an entrepreneurial approach to foreign markets and an understanding of the target market conservative managers and salespeople and a centralized organizational system extreme competition and support from home-country governments exclusively

an entrepreneurial approach to foreign markets and an understanding of the target market

Critical incident analysis examines ________. Selected Answer: an episode in which tension arises between employee and foreign counterpart due to a cross-cultural misunderstanding a critical situation in which the internal stakeholders of a firm fail to reach a consensus with regard to a common issue an episode in which tension arises between an employee and a manager with regard to performance evaluation a situation under which an MNE is forced to relocate operations abroad

an episode in which tension arises between employee and foreign counterpart due to a cross-cultural misunderstanding

"the researcher draws on known statistics from one country to gain insights into the same phenomenon for another, similar country" analogy proxy indicators Test marketing Market segmentation

analogy

Which of the following tasks should a shoe manufacturing company perform first if it needs to assess the global market opportunity? Answers: assess the suitability of the company's shoes for foreign markets analyze the firm's readiness to internationalize

analyze the firms readiness to internationalize

Which of the following is an example of a global industry? Publishing Retailing Beverages automobiles

automobiles

Which of the following represents an infrastructural factor that firms must consider when selecting an FDI location? availability and quality of local manufacturing size and growth of national market political stability stability of currency

availability and quality of local manufacturing involvement of labor unions

Cross-licensing often occurs in the semiconductor and chemical industries in order to __ divide the costs of production and marketing between competing firms avoid research duplication and building on each other's innovations decrease the likelihood of industrial spying and theft among firms protect the inventions and designs of small firms from large MNEs

avoid research duplication and building on each other's innovations

The size and growth rate of a country's middle class is termed as _ market consumption capacity market size market receptivity market intensity

market consumption capacity

Azoo Government Projects (Scenario)The nation of Azoo needs the assistance of a contractor to construct a new bridge and a subway system. The nation lacks the skilled labor and technical know-how to handle such large-scale projects. Representatives of the Azoo government are reviewing the project bids provided by two different international contractors. Contractor A proposes a turnkey contract for Azoo. Contractor B proposes a build-operate-transfer arrangement.The government of Azoo might select Contractor B in order to ________ increase the number of visitors to Azoo prevent the builder from operating in the country for even a short period of time avoid rental fee, user fee, and tolls during the operational stage of the bridge and subway system build the projects cost-effectively

build the projects cost-effectively

"A type of countertrade in which the seller agrees to supply technology or equipment to construct a facility and receives payment in the form of goods the facility produces." barter compensation deals counterpurchase buy-back agrement

buy-back agreement

Private consumption as a percentage of GDP is used to measure ________. market growth rate market receptivity market intensity market size

market intensity

Fun Play Global Sourcing (Scenario)Fun Play Inc., a company manufacturing toys for children, has decided to outsource some of its value-chain activities. However, the firm has no experience with global sourcing and has hired a consulting firm to assist its managers. The consulting firm has been assigned the task of determining which activities should be outsourced and where the outsourced activities should be located.If Fun Play decides to source from its own wholly owned subsidiary, it would be engaging in cause marketing captive sourcing offshoring contract manufacturing

captive sourcing

___ refers to sourcing from the firm's own production facilities Captive sourcing Externalization Business process outsourcing Crowdsourcing

captive sourcing

In the Emerging Market Potential Indicators index, households with Internet access per 100 inhabitants are an indicator of ____ commercial infrastructure country risk market intensity market consumption capacity

commercial infrastructure

The estimate of the share of annual industry sales the firm expects to generate in a particular target market is known as ____ break-even analysis company sales potential industry market potential SWOT analysis

company sales potential

"A type of countertrade in which payment is in both goods and cash." barter compensation deals counterpurchase buy-back agrement

compensation deals

Trade audits may provide managers insight regarding ________ market fluctuation tendencies competitors' offerings and pricing company employee opinions manufacturing cost estimates

competitors' offerings and pricing

"A type of countertrade with two distinct contracts. In the first, the seller agrees to a set price for goods and receives cash from the buyer. This first deal is contingent on a second in which the seller agrees to purchase goods from the buyer for the same amount as in the first contract or a set percentage of same" barter compensation deals counterpurchase buy-back agrement

counterpurchase

An international business transaction where all or partial payments are made in kind rather than cash. countertrade incoterms letter of credit franshisee

countertrade

Which of the following is a characteristic of a global team? similarly trained domestically based culturally diverse constant face-to-face interaction

cultural diverse

Buyer receptiveness differs as a function of ___ lobbying media expenses culture and language product quality

culture and language

The buying power of the country's residents is termed as _ market intensity market receptivity market consumption capacity market size

market intensity

In which of the following are substantial autonomy and decision making authority delegated to a firm's subsidiaries around the world? global strategy decentralized approach transnational strategy nationalization

decentralized approach

Armaz Inc., a manufacturing company, has its headquarters located in Texas, U.S., and subsidiaries in India, China, and Vietnam. Which of the following decisions will be the LEAST decentralized? decision to open a retail store in Vietnam decision about developing new products for foreign markets decision about building factories in Cambodia decision about hiring a marketing manager in the United States

decision about hiring a marketing manager in the United States

Incoterms were developed by the International Chamber of Commerce in order to ___ provide permission to export define how the buyer and seller share freight and insurance costs standardize the cost of shipping and insuring exported items reduce the costs of shipping and insuring exported products

define how the buyer and seller share freight and insurance costs

Which of the following makes it difficult to completely duplicate a food franchise in every global market? low bargaining power different local ingredients need to invest substantial capital differences in language

different local ingredients

"Exporting that is accomplished by contracting with intermediaries located in the foreign market" indirect exporting direct exporting

direct exporting

International division managers usually oversee ___ product development corporate accounting large-scale investments distributor relationships

distributor relationships

"refers to the official forms and other paperwork required in export transactions for shipping and customs procedures. " Documentation license franchisor incoterms

documentation

In a system franchising agreement, the franchisee provides __ down-payment plus royalty usage rights for products and patents trademark-protected business concepts training and ongoing support

down-payment plus royalty

A firm that pursues foreign direct investment to take advantage of government incentives is demonstrating a(n) ________ motive. efficiency-seeking market-seeking novelty-seeking asset-seeking

efficiency-seeking

An advantage of licensing is that firms are able to _____ guarantee a basis for future expansion control how the licensed asset is used enter markets with extensive trade barriers resolve disputes easily

enter markets with extensive trade barriers

Which of the following terms is used to refer to a focal firm's partial ownership of an existing firm turnkey operation equity participation greenfield investment direct investment

equity participation

Which of the following organizational arrangements for foreign operations is most closely associated with home replication strategy? product structure export department geographic area structure international division

export department

Trade as a percentage of GDP is used to measure _ market size market receptivity market growth rate market intensity

market receptivity

Information technology has increased the success and growth of international franchising operations by ________. eliminating the need for corporate meetings to discuss quality control assigning franchisors maximum control to oversee franchisees activities reducing Internet sales and the need for freight forwarding services improving communication between MNE managers and their franchisees

improving communication between MNE managers and their franchisees

"Universally accepted terms of sale that specify how the buyer and the seller share the cost of freight and insurance in an international transaction and at which point the buyer takes title to the goods." Incoterms "International Commerce Terms" documentation license franchisor

incoterms "International Commerce Terms"

One of the goals that firms most likely want to attain from internationalizing is _ establish their presence in saturated markets increase their sales and profits minimize country risk decrease trade barriers in the foreign markets

increase their sales and profits

Collaborative ventures benefit SMEs by providing them with _ larger and newer facilities better trained employees more advanced technology increased amount of capital

increased amount of capital

A researcher who assigns scores to countries for their overall market attractiveness uses ________ to choose the most promising foreign markets. thematic apperception tests indexing and ranking gradual elimination behaviorally anchored rating scales

indexing and ranking

"Exporting that is accomplished by contracting with intermediaries located in the firm's home market." indirect exporting direct exporting

indirect exporting

An advantage to firms that use a product structure arrangement is that ________. duplication of corporate support functions for each product division is avoided it requires a small resource commitment there is limited possibility for excessive focus on products individual product lines are coordinated and managed globally

individual product lines are coordinated and managed globally

Which of the following is a disadvantage of a multidomestic strategy? lack of opportunities to delegate tasks standardized products in culturally different markets high pressure on headquarters staff inefficient manufacturing

inefficient manufacturing

Prox Inc. is a U.S.-based manufacturer of consumer electronics. It decides to export to Mexico and wants to protect its goods against damage, loss, and pilferage. Which of the following documents is applicable here bill of lading insurance certificate pro forma invoice license

insurance certificate

The problem of end-user prices reaching exorbitant levels in the export market, caused by multilayered distribution channels, intermediary margins, tariffs, and other international customer costs is known as ___ incremental pricing standardization puffery international price escalation

international price escalation

Which of the following is a disadvantage of licensing for technological firms? It is not appropriate for entering markets that pose substantial country risk. It restricts flexibility in the foreign market due to the technological firm's ownership of key assets in the target market. It requires high capital investment and the presence of the technological firm in the foreign market. It increases the risk of creating a future competitor.

it increases the risk of creating a future competitor

Which of the following is an advantage of franchising to the franchisor? There is seldom any risk of franchisees becoming future competitors. There is seldom a requirement for the franchisor to become familiar with foreign laws and regulations. It is a low-risk, low-cost entry strategy. It is easier to maintain control over a franchisee.

it is a low risk, low-cost entry strategy

Typically, ________ provide(s) a means for collective bargaining. NGOs government agencies the top management of MNEs labor unions

labor unions

"contract between the banks of the buyer and the seller that ensures payment from the buyer to the seller upon receipt of an export shipment." letter of credit incoterms license indirect exporting

letter of credit

A subsidiary is most likely to receive favorable treatment from an MNE if it is located in a country with _ significant restrictions on profit repatriation lower corporate income-tax rates political instability low tariffs for the product in question

lower corporate income-tax rates

Which of the following is a major challenge often faced by focal firms that engage in global sourcing? no control over the quality of outputs increased costs of business travel domestic management of local distribution lower-than-expected cost savings

lower-than-expected cost savings

As a strategic asset, ________ is of the lowest importance to a firm manufacturing of parts customer service R&D, design marketing and branding

manufacturing of parts

Business activities that would most likely be offshored are characterized by ________. functions related to the firm's core competencies and strategic assets routine tasks that do not relate to the firm's primary service or product high-value-adding activities that contribute more productively to increasing company performance services related to critical, long-term research projects and product development

routine tasks that do not relate to the firm's primary service or product

Which of the following is characteristic of master franchise arrangements? franchisee provides completely standardized business activities, replicated across diverse markets franchise networks that pay fewer royalties to franchisors franchise networks where franchisor provides a lump-sum payment to get started in a foreign market subfranchises to other independent businesses and thus assumes the role of the local franchisor

subfranchises to other independent businesses and thus assumes the role of the local franchisor

Which of the following is a disadvantage of equity joint ventures? lesser control over future directions imbalanced relationship termination difficulties vague contractual partnership

termination difficulties

A favorable global market opportunity for a firm would most likely lead to ___ a change in product packaging the establishment of a production facility the sale of corporate stock the procurement of new distributors

the establishment of a production facility

Which of the following is a key reason that a focal firm would most likely enter a collaborative venture with a foreign firm? the market abroad is saturated; there is no scope for the focal firm's products or services the focal firm wants to duplicate a competitor's marketing strategies abroad the foreign firm requires the focal firm's financial resources to compete locally as well the foreign firm can fill an important gap in the focal firm's value chain

the foreign firm can fill an important gap in the focal firm's value chain

Firms prefer HCNs when _______ the parent country is keen on maintaining full control over foreign operations the host country has no specialized knowledge to share the host country environment is complex managers located in the headquarters adopt a dominantly ethnocentric approach to hiring

the host country environment is complex

In a licensing agreement, ________ is responsible for local sales. patent owner the licensee the licensor copyright partner

the licensee

Which of the following would exert pressure on a firm to become locally responsive? the desire to capitalize on converging consumer trends the need to cater to local customer needs the need to monitor and respond to global competitors the desire to provide uniform service to consumers

the need to cater to local customer needs to meet host government requirements and regulations

Focal firms typically source from external suppliers for all of the following reasons EXCEPT ________. the product can be purchased inexpensively the supplier offers the same product to competing firms the supplier specializes in providing the product or service the product or service obtained is non-core

the supplier offers the same product to competing firms

"An irrevocable letter of credit cannot be canceled without agreement by both buyer and seller" true false

true

According to the Emerging Market Potential Indicators index, ________ is an indicator of market size. real GDP growth rate urban population telephones per 100 habitants population per retail outlet

urban population

An arrangement whereby the firm owns, or seeks to own, multiple stages of a value chain for producing, selling, and delivering a product or service is termed as __ horizontal integration centralization vertical integration decentralization

vertical integration

Which of the following is an example of intellectual property? systems of measurement a phone directory Volkswagen's logo an unpublished book

volkswagen's logo

Base remuneration is also referred to as _____ benefits wages allowance incentives

wages