International Management 3
21. Reverse innovation means designing a product for the home country and taking that innovation to a developing country.
false
14. The world does become flatter to the extent a brand is recognized, accepted, and trusted across borders.
true
18. The disadvantage of straight product extension is that a company's products may not be well suited to local needs.
true
22. The first step in inventing a product for a new country market is to understand the key product characteristics needed to succeed in that market
true
40. Dell's direct-sales model using catalogs and then the Internet is an example of: a. new-market disruption. b. low-end disruption. c. bias for action. d. venture capitalism. e. angel investment.
a
57. The Brazilian economy competes on production and product quality. Therefore, one could term the Brazilian economy as an example of: a. a factor-driven economy. b. an efficiency-driven economy. c. venture capitalism. d. an innovation-driven economy. e. bootstrapping.
b
63. Intrapreneurship refers to a form of entrepreneurship that: a. allows the hostile takeover of one organization by another. b. leads to the establishment of a new business. c. helps in the merger of two existing businesses. d. takes place in a business that is already in existence. e. helps in the demerger of an existing business.
d
21. An intrapreneur acts within the confines of an existing organization.
true
6. The purpose of segmentation is to give the company a concrete vision of its customers, so that it can better understand how to market to that customer.
true
8. Social entrepreneurs apply the same tools and skill sets as other entrepreneurs.
true
9. In the case of outsourcing, the company pays the outsource vendor for the end result; how the vendor achieves the end result is up to the vendor.
true
44. A(n) _____ is an affluent individual who provides capital for a business start-up. a. angel investor b. social entrepreneur c. venture capitalist d. intrapreneur e. small-time business owner
a
5. One of the biggest challenges in selling to emerging markets involves making the product affordable
true
6. The biggest difference in moving from corporate life to entrepreneurship is that entrepreneurs do not have a buffer between a mistake and total failure.
true
26. _____ is defined as "the recognition of opportunities and the use or creation of resources to implement innovative ideas for new, thoughtfully planned ventures." a. Entrepreneurship b. SWOT c. Globalization d. International business e. Intrapreneurship
a
27. Nestlé India has a distribution channel that consists of the central warehouse near New Delhi. The goods are handed over to carry forward agents. The agents ensure that the goods reach the distributors assigned to each territory. Then the goods are passed over to the wholesalers in each of the territories. The goods then go to the retailers and finally reach the end customers. The above constitutes an example of: a. indirect channel of distribution. b. direct channel of distribution. c. channel value proposition. d. franchising. e. licensing.
a
29. _____ typically enter established markets, providing a more traditional product or service to a local market. a. Small-business owners b. Entrepreneurs c. Intrapreneurs d. Angel investors e. Venture capitalists
a
37. New-market disruption refers to: a. targeting noncustomers to create a new market that was previously ignored by the dominant players of the existing market. b. disruptive technology that appears at the low end of an industry offering. c. the propensity to act or decide without customary analysis or sufficient information. d. a formal statement of a set of business goals. e. establishing organizations, either for-profit or nonprofit, whose focus is to implement innovative solutions to societal problems.
a
43. Owner financing, sweat equity, and minimization of the accounts receivable are the different types of: a. bootstrapping. b. venture capital financing. c. angel funding. d. hedge funding. e. crowd funding.
a
53. Efficiency-driven economies are economies that are typical in countries that compete on the basis of: a. production processes and increased product quality. b. advanced corporate infrastructure and business practices. c. cutting-edge technological know-how. d. unskilled labor and natural resources. e. business sophistication and innovation.
a
59. A(n) _____ refers to a business organization that seeks to derive significant competitive advantage from the use of resources and the sale of outputs in multiple countries. a. born-global firm b. spin-out firm c. early internationalizing firm d. young resource-poor firm e. restructured existing firm
a
61. Skype Limited developed the free Internet phone technology called voice-over Internet protocol and serves as an example of: a. a born-global firm. b. intrapreneurship. c. bootstrapping. d. angel investment. e. social entrepreneurship.
a
65. The development of the Macintosh computer within Apple is an example of: a. intrapreneurship. b. angel investment. c. venture capitalism. d. bootstrapping. e. a new-market disruption strategy.
a
67. A(n) _____ is one that seeks to systematically promote the spirit of intrapreneurship in targeted parts of the organization. a. intrapreneurial organization b. angel investor c. venture capitalist d. social entrepreneur e. small-business owner
a
68. The coexistence approach is one form of: a. organizational intrapreneurship. b. bootstrapping. c. social entrepreneurship. d. venture capitalism. e. a born-global firm.
a
70. In the structural-separation approach of organizational intrapreneurship: a. the firm sets up an internal new-venture division. b. new-venture activities are conducted within an existing business or business unit. c. an investment firm makes venture investments and brings managerial and technical expertise as well as capital to the investments. d. firms exploit a new business opportunity with limited funds. e. firms create a new market that was previously ignored by the dominant players of the existing market.
a
25. In marketing, which of the following statements holds true for a product? a. It refers to the shortest channel of distribution, consisting of just the producer and the end consumer. b. It refers to any physical good or intangible service that is offered for sale. c. It refers to the amount of money that the consumer pays for any physical good or intangible service. d. It refers to the activities that inform and encourage consumers to buy any physical good or intangible service including advertising (whether print, radio, television, online, billboard, poster, or mobile), coupons, rebates, and personal sales. e. It refers to the location at which the company offers any physical good or intangible service for sale.
b
29. A cosmetic company manufactures and markets beauty and related products. It markets its products only via the internet. This is an example of (a): a. indirect channel of distribution. b. direct channel of distribution. c. channel value proposition. d. franchising. e. licensing.
b
32. _____ refers to establishing organizations, either for-profit or nonprofit, whose focus is to implement innovative solutions to societal problems. a. Entrepreneurial process b. Social entrepreneurship c. Bootstrapping d. Angel investor e. Venture capitalist
b
46. Tom Peters and Robert Waterman, authors of "In Search of Excellence," identified _____ as a distinguishing feature of agile, entrepreneurial firms. a. new-market disruption b. bias for action c. angel investment d. venture capitalism e. low-end disruption
b
47. Time and motion indicators: a. are one of the pillars associated with factor-driven economies. b. measure how long it takes to complete a regulatory goal. c. measure the relative political and economic stability of a nation. d. ensure measures to trace early adopters. e. assess the social culture of a nation.
b
48. _____ refer(s) to the annual assessment of the national level of entrepreneurial activity across countries, started as a partnership between London Business School and Babson College. a. Doing Business Index b. Global Entrepreneurship Monitor c. Global Competitiveness Index d. Index of Economic Freedom e. The World Bank Doing Business Reports
b
55. Efficiency-driven economies are: a. highly sensitive to world economic cycles, commodity price trends, and exchange rate fluctuations. b. found in countries that have well-established higher education, well-organized goods and labor markets, and the capacity to harness existing technologies. c. found in countries that have mature financial markets, business laws, large domestic size, and flourishing innovation. d. associated with pillars such as institutions, infrastructure, macroeconomic stability, and health and primary education. e. not sensitive to world economic cycles and exchange rate fluctuations.
b
58. Chad's economy is dependent on oil reserves and is very sensitive to world economic cycles, commodity prices, and fluctuations in exchange rates. Hence, one could term this economy as an example of: a. an innovation-driven economy. b. a factor-driven economy. c. bootstrapping. d. venture capitalism. e. an efficiency-driven economy.
b
66. IBM used _____ to enable broad collaboration, gain new perspectives on problems and challenges, and find important patterns and themes, all with the goal of accelerating decision making and action. a. venture capitalism b. crowdsourcing a. organizational intrapreneurship b. bootstrapping c. social entrepreneurship
b
69. In the coexistence approach: a. the firm sets up an internal new-venture division. b. new venture activities are conducted within an existing business or business unit. c. investment firms make venture investments and bring managerial and technical expertise as well as capital to the investments. d. firms exploit a new business opportunity with limited funds. e. firms create a new market that was previously ignored by the existing market's dominant players.
b
27. A(n) _____ is defined as one who organizes, owns, manages, and assumes the risks of an economic venture. a. stakeholder b. strategist c. intrapreneur d. entrepreneur e. importer
c
28. _____ had been perceived as risk takers and nonconformists who were usually unable to work in a corporate environment. a. Angel investors b. Small-business owners c. Entrepreneurs d. Venture capitalists e. Intrapreneurs
c
35. Disruptive technology refers to: a. the process of exploiting a new business opportunity with limited funds. b. a technology that only changes existing technologies with better value. c. a technology that can make prior technologies obsolete. d. the propensity to act or decide without customary analysis or sufficient information. e. an investment firm that makes venture investments.
c
36. _____ is a technology that appears at the low end of an industry offering and usually does not lure customers away until it improves and becomes better than the incumbent offering. a. Social entrepreneurship b. New-market disruption c. Low-end disruption d. Bootstrapping e. Countertrade
c
41. The most common form of bootstrapping is: a. to delay payment. b. to minimize inventory. c. to use a personal credit card. d. subsidy finance. e. joint utilization.
c
54. Innovation-driven economies are economies that are typical in countries that compete on the basis of: a. unskilled labor and natural resources. b. cutting-edge technological know-how. c. business sophistication and innovation. d. production processes and increased product quality. e. advanced corporate infrastructure and business practices.
c
60. The traditional firm: a. develops strategies needed to expand abroad at the time of the firm's founding. b. begins with a "borderless" view of the world. c. operates in the home country for many years and gradually evolves into international trade. d. focuses on achieving superior performance in international business from the inception of the firm. e. is defined as a business organization that, from inception, seeks to derive significant competitive advantage from the use of resources and the sale of outputs in multiple countries.
c
64. In their book "Re-Inventing the Corporation," John Naisbitt and Patricia Aburdene cited _____ as a way for established businesses to find new markets and new products. a. venture capitalism b. angel investment c. intrapreneurship d. small-business ownership e. bias for action
c
28. In marketing, which of the following statements holds true for promotion? a. It refers to the shortest channel of distribution, consisting of just the producer and the end consumer. b. It refers to any physical good or intangible service that is offered for sale. c. It refers to the amount of money that the consumer pays for any physical good or intangible service. d. It refers to the activities that inform and encourage consumers to buy any physical good or intangible service including advertising (whether print, radio, television, online, billboard, poster, or mobile), coupons, rebates, and personal sales. e. It refers to the location at which the company offers any physical good or intangible service for sale.
d
30. The entrepreneur: a. is typically the intraorganizational revolutionary. b. has the backing of an organization. c. challenges the status quo and fights to change the system from within. d. recognizes opportunities and uses resources to implement innovative ideas for new, thoughtfully planned ventures. e. operates as the profit centre of an organization.
d
31. Which of the following statements is true about intrapreneurs? a. They are synonymous with entrepreneurs. b. They have lesser resources than most new ventures. c. They face the immediate risk of losing a paycheck. d. They are protected from feeling the immediate impact of failures and mistakes. e. They undertake projects that never lead to any kind of innovation in product or service.
d
34. Opportunity analysis, planning and preparing the enterprise, and resourcing the enterprise are the three essential parts of the: a. management process. b. organizational process. c. institutional plan. d. entrepreneurial process. e. hybrid strategy.
d
45. Bias for action refers to: a. targeting noncustomers to create a new market that was previously ignored by the dominant players of the existing market. b. a formal statement of a set of business goals. c. establishing organizations, either for-profit or nonprofit, whose focus is to implement innovative solutions to societal problems. d. the propensity to act or decide without customary analysis or sufficient information. e. exploiting a new business opportunity with limited funds.
d
52. Factor-driven economies are economies that are typical in countries that compete on the basis of: a. cutting-edge technological know-how. b. business sophistication and innovation. c. production processes and increased product quality. d. unskilled labor and natural resources. e. advanced corporate infrastructure and business practices.
d
26. In marketing, which of the following statements holds true for place? a. It refers to the shortest channel of distribution, consisting of just the producer and the end consumer. b. It refers to any physical good or intangible service that is offered for sale. c. It refers to the amount of money that the consumer pays for any physical good or intangible service. d. It refers to the activities that inform and encourage consumers to buy any physical good or intangible service including advertising (whether print, radio, television, online, billboard, poster, or mobile), coupons, rebates, and personal sales. e. It refers to the location at which the company offers any physical good or intangible service for sale.
e
33. _____ consists of identifying opportunities, planning and devising the venture, and resourcing the venture and taking action. a. Business plan b. Bias for action c. New-market disruption d. Bootstrapping e. Entrepreneurial process
e
38. JetBlue has focused on low-cost strategy and has been able to achieve the lowest cost position in the industry by eliminating many services. However, it has also targeted overpriced but underserved markets. This is an example of: a. a new-market disruption strategy. b. venture capitalism. c. an angel investment. d. social entrepreneurship. e. a hybrid-disruption strategy.
e
39. A _____ refers to a formal statement of a set of business goals. a. strategic plan b. service-level plan c. pro-forma invoice d. horizontal scope statement e. business plan
e
42. The probability of the success of a business venture depends: a. solely on strong execution of the strategies. b. solely on the necessary resources and capabilities. c. solely on the right entrepreneurial team. d. solely on a good opportunity. e. on a good opportunity, the right entrepreneurial team, and the necessary resources and capabilities.
e
49. _____ refer(s) to a system that ranks nations quantitatively according to a weighted index of 12 assessed pillars. a. Index of Economic Freedom b. Global Entrepreneurship Monitor c. Doing Business Index d. The World Bank Doing Business Reports e. Global Competitiveness Index
e
50. Which of the following is an example of an innovation-driven economy? a. Argentina b. Brazil c. India d. Iran e. The United States
e
51. Which of the following is an example of a factor-driven economy? a. Turkey b. Belgium c. Denmark d. Uruguay e. Egypt
e
56. The pillars associated with _____ economies are institutions, infrastructure, macroeconomic stability, and health and primary education. a. productivity-driven b. skill-driven c. innovation-driven d. efficiency-driven e. factor-driven
e
62. A(n) _____ refers to a person within an established business who takes direct responsibility for turning an idea into a profitable finished product through assertive risk taking and innovation. a. angel investor b. venture capitalist c. small-business owner d. entrepreneur e. intrapreneur
e
1. In the case of the indirect channel of distribution, there are no intermediaries between the consumer and the producer
false
10. Gray markets are illegal and the operators in the market are punishable by law
false
11. The executive summary highlights how the business operates on a day-to-day basis.
false
13. All citizens of a given country can be marketed to uniformly.
false
14. Early adopters are those consumers who generally wait for others to buy a new technology before they make use of it.
false
15. Culture plays an insignificant role in deciding whether the condition in a particular country is conducive to entrepreneurship.
false
16. A multibrand strategy is not advisable when a country has a strong, positive association with a particular brand.
false
18. Born-global firms follow the traditional pattern of businesses that operate in the home country for many years and gradually evolve into international trade.
false
19. One advantage of straight product extension is that the products may be less costly due to lower manufacturing and labour costs in the United States.
false
2. A local dry cleaner provides dry cleaning facilities to his customers in a particular locality. He would be considered an entrepreneur.
false
22. An entrepreneur challenges the status quo and fights to change the system from within.
false
24. The firm treats intrapreneurial teams as a cost center rather than as a profit center.
false
24. The main disadvantages of global sourcing are low quality and higher cost.
false
3. In the case of outsourcing, the firm retains control of the operations and directly hires the employees
false
3. Small-business owners rely on innovation and speed to a much greater extent than entrepreneurs.
false
4. In the case of offshoring, the vendor takes control of the operations and runs the operations as they see fit.
false
7. Entrepreneurs only launch commercial ventures, which sell products or services for a profit.
false
7. Understanding the market's culture and social trends is irrelevant when it comes to doing business in the emerging economies of the world.
false
8. The existence of gray-market activity across a country's border has a positive impact on the producer and their channel partners (e.g., distributors and retailers) in the higher-priced country.
false
9. Opportunity identification does not form a part of the entrepreneurial process.
false
Entrepreneurs are the same as small-business owners in terms of the methodology, new product development, and the choice of markets.
false
10. A disruptive technology is a technology that can make prior technologies obsolete.
true
11. The downsides of safety stock include the increased costs of carrying that inventory such as the investment in the products, taxes and insurance, and storage space.
true
12. Adam Smith, social philosopher and economist, argued that the free-enterprise economic system encourages entrepreneurship because it permits individuals freedom to create and produce.
true
12. Counterfeit markets hurt companies that have invested in building intellectual assets such as unique product designs, technological developments, costly media content, and carefully crafted brands.
true
13. In order to operate effectively, businesses need to know that contracts are binding, that their property and intellectual property rights are protected, and that there is a fair system for handling disputes.
true
15. Counterfeit markets are illegal because they purposely deceive the buyer.
true
16. A born-global firm is a business organization that seeks to derive significant competitive advantage from the use of resources and the sale of outputs in multiple countries.
true
17. A common characteristic of born-global firms is that their offerings complement the products or capabilities of other global players.
true
17. Multiple brands may resonate more with specific markets, especially if a company merges with or acquires a local brand that is well respected in that region.
true
19. The distinguishing feature of born-global firms is that their origins are international, as demonstrated by management's global focus and the commitment of certain types of resources to international activities.
true
2. Intermediaries in the channel of distribution can include distributors, wholesalers, agents, brokers, retailers, international freight forwarders, and trading companies
true
20. The advantage of straight product extension strategy is that the company doesn't need to invest in new research, development, or manufacturing.
true
20. There are two phases of a global start-up assessment, which consists of deciding whether a firm should become a global start-up and what the firm needs to do to make that happen.
true
23. Companies invest a lot in building their brand recognition and reputation because a brand name signals trust.
true
23. Organizations allow intrapreneurial employees to participate in the rewards of what they create in order to promote intrapreneurship.
true
24. In the case of sole-sourcing, if the company gives the supplier a lot of business, the company may have more influence over the supplier for preferential treatment.
true
25. The organization defines and supports a system of contractual agreements between internal enterprises.
true
4. A company that develops a revolutionary new way to do a particular activity and seeks to expand that new method nationally and internationally would be considered entrepreneurial.
true
5. Jeffry Timmons—one of the early leaders in entrepreneurship education—considered the opinion that entrepreneurs are born and not made, a myth.
true