International Business Chapter 11 Brian Rawson

According to value-chain analysis, inbound and outbound logistics are considered as ________. A) tertiary activities B) primary activities C) support activities D) core competencies

B) primary activities

Which of the following business-level strategies should a company follow in order to charge a higher price for its products and enjoy greater customer loyalty? A) differentiation strategy B) stability strategy C) mass customization strategy D) retrenchment strategy

A) differentiation strategy

________ decision making disperses decisions to lower organizational levels, such as to international subsidiaries. A) Decentralized B) Top-down C) Authoritative D) Top management

A) Decentralized

The objectives at the ________ of an organization are typically more precise and contain numerical targets of performance. A) department-level B) business-level C) global-level D) corporate-level

A) department-level

A ________ strategy is one in which a company designs its products to be perceived by buyers as unique throughout its industry. A) differentiation B) stability C) low-cost leadership D) retrenchment

A) differentiation

True or False: Objectives at the highest level in a company are always stated in the most specific terms.

False

True or False: Technology development is an example of a primary activity in the value chain of an organization.

False

True or False: The closing of factories with unused capacity is an example of a stability strategy.

False

True or False: The main benefit of a global strategy is that it allows companies to monitor buyer preferences closely in each local market.

False

True or False: The main purpose of self-managed teams is to help break down barriers between departments.

False

True or False: The scope of a corporation's operations refers to the size of its operations.

False

________ decision making occurs at a high organizational level in one location, such as an organization's headquarters. A) Centralized B) Facilitative C) Participative D) Consultative

A) Centralized

________ teams can help break down barriers between departments and reorganize operations around processes in an organization. A) Cross-functional B) Self-managed C) Global D) Virtual

A) Cross-functional

Offering the same products using the same marketing strategy in all national markets of an organization is referred to as a ________ strategy. A) global B) retrenchment C) multinational D) blue ocean

A) global

Which of the following is considered as a primary activity in an organization? A) infrastructure B) marketing and sales C) procurement D) human resource management

B) marketing and sales

Which of the following refers to a written statement of why a company exists and what it plans to accomplish? A) memorandum of association B) mission statement C) vision statement D) articles of association

B) mission statement

Which of the following statements is true of the environmental forces that affect strategy formulation? A) Socialist economic systems normally levy light taxes on business profits. B) Countries that excessively spend on R&D tend to have lower levels of prosperity. C) Approval of the host government is almost always necessary for making direct investments. D) Free-market economies tend to levy high taxes on business profits.

C) Approval of the host government is almost always necessary for making direct investments.

Which of the following is a special ability of a company that competitors find extremely difficult to equal? A) comparative advantage B) absolute advantage C) core competency D) economy of scale

C) core competency

Companies involved in more than one line of business must first formulate a ________ strategy. A) business-level B) department-level C) corporate-level D) global-level

C) corporate-level

________ is the process of dividing a company's activities into primary and support activities and identifying those that create value for customers. A) Fundamental analysis B) Technical analysis C) Structural analysis D) Value-chain analysis

D) Value-chain analysis

The main benefit of a multidomestic strategy is that it ________. A) exploits scale economies in product development and marketing B) is cost-saving due to product and marketing standardization C) takes advantage of location economies D) responds quickly and effectively to emerging buyer preferences

D) responds quickly and effectively to emerging buyer preferences

Global products are most commonly seen in industries where there is ________. A) little convergence of buyer preference across national borders B) low pressure to contain costs C) high demand for customized products D) significant price competition

D) significant price competition

True or False: A differentiation strategy is often implemented when a company wants to exploit economies of scale to have the lowest cost structure.

False

True or False: A focus strategy works best with mass-marketed products aimed at price-sensitive buyers.

False

True or False: A global matrix structure is an organizational structure that divides worldwide operations according to a company's product areas.

False

True or False: A joint venture is an example of a retrenchment strategy of an organization.

False

True or False: A main goal of the global product structure is to bring together geographic and product area managers in joint decision making.

False

True or False: A multinational strategy is best suited to industries in which price competitiveness is a key success factor.

False

True or False: A multinational strategy is most appropriate for companies that do not have foreign direct investments but rather export their products to foreign markets.

False

True or False: All parties ranging from suppliers and employers to consumers who are affected by a company's activities are called its stockholders.

False

True or False: An international area structure separates domestic from international business activities by creating a separate international division with its own manager.

False

True or False: Centralized decision making is beneficial when fast-changing national business environments put a premium on local responsiveness.

False

True or False: Core competencies of organizations are the special skills of certain employees that give a company an edge over other organizations.

False

True or False: Customer service is an example of a support activity in the value chain of an organization.

False

True or False: Free-market economies tend to levy high taxes on business profits whereas socialist economic systems normally levy lighter taxes.

False

True or False: A global strategy does not allow a company to modify its products except for the most superficial features.

True

True or False: A growth strategy is designed to increase the scale or scope of a corporation's operations.

True

True or False: A low-cost leadership strategy typically requires a company to have a large market share.

True

True or False: A multinational strategy entails having a separate strategy for each nation in which a company markets its products.

True

True or False: A negative aspect of a low-cost leadership strategy is low customer loyalty.

True

True or False: An international division structure reduces the authority of country managers in an organization's subsidiaries.

True

True or False: Core competencies are developed by organizations over long periods of time.

True

True or False: Decentralization can help foster participative management practices.

True

True or False: Objectives of individual business units in an organization exclusively contain numerical targets of performance.

True

True or False: Strategy is the set of planned actions that managers take to help a company meet its objectives.

True

True or False: Support activities assist companies in performing their primary activities.

True

True or False: The purpose of a combination strategy is to mix growth, retrenchment, and stability strategies across a corporation's business units.

True

A ________ is a set of planned actions taken by managers to help a company meet its objectives. A) mission statement B) vision C) strategy D) core competency

C) strategy

Beanstalk International is a rapidly growing company with well-established subsidiaries in several nations. The company wants to follow a strategy of adapting its products and marketing activities in each national market to suit local preferences. This strategy aims at creating value for its customers. Beanstalk managers know that the drawback of such an adaptive strategy is that it ________. A) does not allow companies to exploit scale economies in product development, manufacturing, and marketing B) can cause a company to overlook important differences in buyer preferences across various markets C) is applicable only to industries in which price-competitiveness is a key success factor D) does not allow a company to modify its products except for the most superficial features

A) does not allow companies to exploit scale economies in product development, manufacturing, and marketing

The main drawback of a multinational strategy is that it does not allow a company to ________. A) exploit scale economies in product development or marketing B) closely monitor buyer preferences in each local market C) modify its products except for the most superficial features D) respond quickly and effectively to emerging buyer preferences

A) exploit scale economies in product development or marketing

TeleToys Inc., a U.S.-based company, recently opened eighteen new toy stores in Brazil, acquired a women's clothing company in Canada, and closed its men's clothing line in Australia. The company has a structure that organizes its global operations into geographic regions. TeleToys recently opened eighteen new toy stores in Brazil. This move can best be described as a ________ strategy. A) growth B) stability C) retrenchment D) differentiation

A) growth

An organizational structure that organizes a company's entire global operations into countries or geographic regions is referred to as a(n) ________ structure. A) international area B) international division C) global matrix D) global product

A) international area

Adapting products and their marketing strategies in each of the national markets of a company to suit local preferences is called a ________ strategy. A) multinational B) blue ocean C) global D) retrenchment

A) multinational

Beanstalk International is a rapidly growing company with well-established subsidiaries in several nations. The company wants to follow a strategy of adapting its products and marketing activities in each national market to suit local preferences. This strategy aims at creating value for its customers. The strategy that Beanstalk would most likely want to follow is called a ________ strategy. A) multinational B) retrenchment C) global D) stability

A) multinational

The way in which a company divides its activities among separate units and coordinates activities among those units is referred to as ________. A) organizational structure B) organizational network analysis C) organizational diagnostics D) organizational climate

A) organizational structure

Which of the following strategies is designed to guard an organization against change? A) stability strategy B) growth strategy C) retrenchment strategy D) differentiation strategy

A) stability strategy

Which of the following statements is true of objectives? A) Objectives of individual business units in a company tend to be stated in the most general terms. B) Objectives become more precise at the level of individual departments. C) Objectives at the highest level in an organization tend to be more specific. D) Objectives at the highest level in an organization are more concrete as they contain numerical targets.

B) Objectives become more precise at the level of individual departments.

________ is the process of identifying and selecting an organization's objectives and deciding how the organization will achieve those objectives. A) Stratification B) Planning C) Economic transition D) Value chain analysis

B) Planning

________ teams are self-managed teams that help reduce waste in the production processes of many manufacturing companies. A) Cross-functional B) Quality-improvement C) Interdependent D) Virtual

B) Quality-improvement

A(n) ________ strategy deals with the primary and support activities in an organization that create value for customers. A) business-level B) department-level C) corporate-level D) international

B) department-level

Decentralized decision making is beneficial when ________. A) all subsidiaries use the same inputs in production B) fast-changing national business environments put a premium on local responsiveness C) one subsidiary's output is another's input D) it aims to create a single global organizational culture

B) fast-changing national business environments put a premium on local responsiveness

A ________ strategy is one in which a company emphasizes on serving the needs of a narrowly defined market segment by being the low-cost leader, differentiating its product, or both. A) global B) focus C) stability D) retrenchment

B) focus

Companies that produce entire inventories of products or components in one or very few optimal locations are most likely to follow a ________ strategy. A) retrenchment B) global C) blue ocean D) multinational

B) global

Companies that typically design promotional campaigns and advertising strategies at their headquarters are most likely to follow a ________ strategy. A) retrenchment B) global C) blue ocean D) multidomestic

B) global

A team of top managers from both headquarters and international subsidiaries who meet to develop solutions to company-wide problems is referred to as a ________ team. A) virtual B) global team C) cross-functional team D) self-managed team

B) global team

Which of the following strategies is designed to increase the scale or scope of a corporation's operations? A) differentiation strategy B) growth strategy C) stability strategy D) retrenchment strategy

B) growth strategy

A growth strategy is designed to ________. A) guard against organizational change B) increase the scale or scope of a corporation's operations C) support the stability strategies of an organization D) support the retrenchment strategies of an organization

B) increase the scale or scope of a corporation's operations

A(n) ________ structure is best suited to companies that treat each national market as unique due to the vast cultural, political, or economic differences between nations. A) international division B) international area C) global matrix D) global product

B) international area

A(n) ________ structure separates domestic from international business activities by creating a separate global branch with its own manager. A) international area B) international division C) global matrix D) global product

B) international division

A retrenchment strategy is designed to ________. A) encourage growth through joint ventures B) reduce the scale or scope of a corporation's operations C) focus exclusively on internally generated growth D) guard against organizational change

B) reduce the scale or scope of a corporation's operations

A company that is closing factories with unused capacity and laying-off workers is most likely following a ________ strategy. A) growth B) retrenchment C) stability D) combined

B) retrenchment

A company that is selling unprofitable business units is most likely following a ________ strategy. A) growth B) retrenchment C) stability D) combined

B) retrenchment

The main benefit of a global strategy is that it allows a company to ________. A) closely monitor buyer preferences in each local market B) save costs due to product and marketing standardization C) customize its products and services D) respond effectively to emerging buyer preferences

B) save costs due to product and marketing standardization

A team in which employees from a single department take on responsibilities of their former supervisors is called a ________ team. A) cross-functional B) self-managed C) global D) virtual

B) self-managed

TeleToys Inc., a U.S.-based company, recently opened eighteen new toy stores in Brazil, acquired a women's clothing company in Canada, and closed its men's clothing line in Australia. The company has a structure that organizes its global operations into geographic regions. Which of the following strategies should TeleToys follow if it wants buyers to perceive its products as unique? A) retrenchment strategy B) global strategy C) differentiation strategy D) low-cost leadership strategy

C) differentiation strategy

Organic growth refers to an organization's corporate strategy that relies on growth ________. A) through mergers and acquisitions B) based on strategic alliances C) generated internally D) achieved from joint ventures

C) generated internally

An organizational structure that splits the chain of command between product and area divisions is referred to as a(n) ________ structure. A) international area B) international division C) global matrix D) global product

C) global matrix

Which of the following is the first stage of the strategy-formulation process? A) identification of value-creating activities B) formulation of strategies C) identification of company mission and goals D) identification of core competency

C) identification of company mission and goals

Decreasing levels of customer loyalty to an organization's products is a major disadvantage of the ________ strategy. A) blue ocean B) stability C) low-cost leadership D) growth

C) low-cost leadership

A business-level strategy in which a company exploits economies of scale is called a ________. A) differentiation strategy B) stability strategy C) low-cost leadership strategy D) retrenchment strategy

C) low-cost leadership strategy

Which of the following strategies works best for an organization that practices mass production and mass-marketing? A) differentiation strategy B) focus strategy C) low-cost leadership strategy D) retrenchment strategy

C) low-cost leadership strategy

A ________ strategy typically increases the cost structure for international companies and forces them to charge higher prices to recover such costs. A) retrenchment B) global C) multidomestic D) blue ocean

C) multidomestic

Which of the following strategies is appropriate for companies in industries where buyer preferences do not converge across national borders? A) retrenchment strategy B) global strategy C) multidomestic strategy D) mass customization strategy

C) multidomestic strategy

Companies often establish largely independent, self-contained units in each of its national markets to implement a ________ strategy. A) retrenchment B) global C) multinational D) blue ocean

C) multinational

Which of the following is considered as a support activity in an organization? A) inbound logistics B) marketing and sales C) procurement D) customer service

C) procurement

Which of the following is a characteristic based on which products are typically differentiated? A) brand loyalty B) brand equity C) product design D) product cost

C) product design

A strategy designed to reduce the scale or scope of a corporation's business is called a ________ strategy. A) growth B) differentiation C) retrenchment D) stability

C) retrenchment

TeleToys Inc., a U.S.-based company, recently opened eighteen new toy stores in Brazil, acquired a women's clothing company in Canada, and closed its men's clothing line in Australia. The company has a structure that organizes its global operations into geographic regions. The closing of TeleToys' Australian men's clothing line can best be described as a(n) ________ strategy. A) organic growth B) stability C) retrenchment D) global

C) retrenchment

Beanstalk International is a rapidly growing company with well-established subsidiaries in several nations. The company wants to follow a strategy of adapting its products and marketing activities in each national market to suit local preferences. This strategy aims at creating value for its customers. Which of the following should managers at Beanstalk conduct to identify and distinguish between the primary and support activities in the organization? A) fundamental analysis B) structural analysis C) value chain analysis D) technical analysis

C) value chain analysis

Which of the following is a disadvantage of a company with an international area structure? A) Country managers have very little authority. B) The subsidiaries fail to develop organizational cultures suited to their locations. C) Individual responsibility and accountability is foggy. D) Cross-fertilization of knowledge from one unit to another may be less than desirable.

D) Cross-fertilization of knowledge from one unit to another may be less than desirable.

The lines of authority in an organization that run from top management to individual employees and specify internal reporting relationships is called ________. A) grapevine communication B) symbolic interactionism C) value chain D) chains of command

D) chains of command

A ________ team is one composed of employees who work at similar levels in different operative departments in an organization. A) self-managed B) global C) virtual D) cross-functional

D) cross-functional

A ________ strategy often means designing products and promotions aimed at consumers who are either dissatisfied with existing choices or who want something distinctive. A) global B) stability C) low-cost leadership D) focus

D) focus

A ________ strategy can create cost savings due to product and marketing standardization. A) retrenchment B) multidomestic C) blue ocean D) global

D) global

Beanstalk International is a rapidly growing company with well-established subsidiaries in several nations. The company wants to follow a strategy of adapting its products and marketing activities in each national market to suit local preferences. This strategy aims at creating value for its customers. Which of the following is a primary activity that creates value for Beanstalk's customers? A) firm infrastructure B) procurement C) human resource management D) inbound logistics

D) inbound logistics

TeleToys Inc., a U.S.-based company, recently opened eighteen new toy stores in Brazil, acquired a women's clothing company in Canada, and closed its men's clothing line in Australia. The company has a structure that organizes its global operations into geographic regions. TeleToys' organizational structure can best be referred to as a(n) ________ structure. A) international division B) global product C) global matrix D) international area

D) international area

TeleToys Inc., a U.S.-based company, recently opened eighteen new toy stores in Brazil, acquired a women's clothing company in Canada, and closed its men's clothing line in Australia. The company has a structure that organizes its global operations into geographic regions. Which of the following features is TeleToys least likely to use in order to create a perception of having unique products? A) brand image B) reputation for quality C) product design D) low cost

D) low cost

Beanstalk International is a rapidly growing company with well-established subsidiaries in several nations. The company wants to follow a strategy of adapting its products and marketing activities in each national market to suit local preferences. This strategy aims at creating value for its customers. Which of the following is a support activity that creates value for Beanstalk's customers? A) production B) marketing and sales C) customer service D) technology development

D) technology development