International MGMT Ch.7

Which of the following statements about small businesses in the US is FALSE? a. Small businesses represent about 99.7% of all employing firms. b. Small businesses generate about 15% of all new jobs annually. c. Small businesses employ almost 41% of all high tech workers. d. Small businesses represent almost 97% of identified exporters.

b. Small businesses generate about 15% of all new jobs annually.

During the second stage (Export Management) of the small business model of internationalization, the company a. Fills international orders only. b. Specifically seeks export sales. c. Seeks increased sales from licensing. d. Sets up a local sales office in another country.

b. Specifically seeks export sales.

International sales intensity represents a. A significant size barrier to internationalization. b. The amount of international sales as a proportion of total sales. c. The amount of local sales as a proportion of international sales. d. Is more relevant for larger businesses.

b. The amount of international sales as a proportion of total sales.

First mover advantages occur when a. A company can begin business as a global start-up. b. A company adopts global strategies faster than competitors. c. Company moves quickly into a new venture and establishes the business before other firms can react. d. A company changes production technology.

c. Company moves quickly into a new venture and establishes the business before other firms can react.

When a small business uses significant resources to seek increased sales from exporting, it is what stage of internationalization? a. Stage 1 - Passive exporting b. Stage 2 - Export management c. Stage 3 - Export department d. Stage 4 - Sales branch

c. Stage 3 - Export department

Small businesses differ from large businesses when going international primarily in a. The available participation strategies. b. The strategies they can use to go international. c. Their founder's or entrepreneur's influence. d. The available multinational strategies.

c. Their founder's or entrepreneur's influence.

Technological leadership, as a source of first mover advantage refers to a. A company beginning business as a global start-up. b. A company that adopts global strategies faster than competitors. c. A company that moves quickly into a new venture. d. A company that is the first to use a new technology.

d. A company that is the first to use a new technology.

A global start-up is a. A company that goes global from day one of its life. b. A company that starts a global strategy after exporting. c. A company that skips the first stage of the Small Business Model of Internationalization. d. None of the above

a. A company that goes global from day one of its life.

An entry wedge is a. A strategic competitive advantage for breaking into the established pattern of commercial activity. b. A competitive opening in an industry. c. A strategy used by only new companies. d. None of the above

a. A strategic competitive advantage for breaking into the established pattern of commercial activity.

The development of a global culture is affected by all of the following characteristics of the key decision makers EXCEPT a. Ability to perform well at the domestic level. b. International experience. c. Perceived psychological distance to foreign markets. d. Overall attitudes toward international strategies.

a. Ability to perform well at the domestic level.

A multinational manager is studying the data on total entrepreneurial activity ratings by country. She is most likely doing this in order to a. Assess the level of entrepreneurship in a country. b. Understand available industries. c. Assess small business failure. d. Understand opportunities for new ventures.

a. Assess the level of entrepreneurship in a country.

An entrepreneur a. Creates new ventures that seek profit and growth. b. Is seldom the primary force behind a company's decision to go international. c. Can accurately predict the risks and uncertainties of his/her ventures. d. Faces less uncertainty than a multinational.

a. Creates new ventures that seek profit and growth.

The United Nations and Organization for Economic Cooperation and Development a. Defines a small business as those having less than 500 employees. b. Defines a small business as those with less than 100 employees. c. Defines a small business based on industry and sales revenue. d. All of the above

a. Defines a small business as those having less than 500 employees.

The discovery, evaluation and exploitation of market opportunities refers to which of the following? a. Entrepreneurship b. International entrepreneurship c. Small business d. International opportunities

a. Entrepreneurship

Switching costs are a. Expenses involved when a customer switches to a competitor's product. b. Forms of copycat strategies. c. The costs incurred by a company when adopting a global standard. d. None of the above

a. Expenses involved when a customer switches to a competitor's product.

According to the text, which of the following participation strategies do small businesses emphasize? a. Importing b. Licensing c. Foreign direct investment d. Exporting

d. Exporting

Small businesses can potentially have more advantages than larger businesses in the global economy because a. Small companies can change quickly to take advantage of opportunities in new markets. b. Larger companies have more slack resources to absorb risk. c. Small companies require a lot of travel from their CEOs. d. Small companies have more access to resources.

a. Small companies can change quickly to take advantage of opportunities in new markets.

Which of the following has helped to level the playing field for small businesses wanting to go international? a. Technology and e-commerce b. Sources of venture capital c. Having a headquarters located near a major customer d. The existence of trade shows

a. Technology and e-commerce

The liabilities of size for small businesses imply that a. Small businesses can grow as a result of going international. b. Being small often means it may be more difficult to obtain necessary resources. c. Small size creates only limited liability. d. Small and new businesses can only succeed by exporting.

b. Being small often means it may be more difficult to obtain necessary resources.

Which of the following is not one of the questions to consider when a small business decides to go international? a. Do we have a global product or service? b. Do we have partners with which to go international? c. Do we have the managerial, organizational, and financial resources to go international? d. Is there a profitable market for our products or service?

b. Do we have partners with which to go international?

Many multinationals rely on the support and assistance provided by which of the following when entering a new country? a. Customers b. Entrepreneurs and small businesses c. World Bank d. Trade Shows

b. Entrepreneurs and small businesses

Which of the following is NOT a common customer contact technique used by small firms to get find customers? a. Trade shows b. Industry advisory boards c. Government sponsored trade missions d. Catalog expositions

b. Industry advisory boards

The more common techniques of making international contacts used by small businesses include all of the following EXCEPT a. Trade shows. b. Seeking advice from foreign companies. c. Government sponsored trade missions. d. Catalogue expositions.

b. Seeking advice from foreign companies.

All of the following are true about small business CEOs EXCEPT a. Opening new markets is often the personal responsibility of the CEO. b. They want to take a break from the daily management of their businesses by going overseas. c. New international ventures may threaten their family life. d. Their attitudes towards internationalization is a major factor in international success.

b. They want to take a break from the daily management of their businesses by going overseas.

One of the major advantages of being involved in Stage 5 (Production Abroad) of the stages of internationalization for small businesses is that it a. Allows the company to cut the costs of direct investment. b. Allows the company to avoid developing a globally integrated network. c. Allows the company to gain local advantages such as product adaptation or production effectiveness. d. Almost insures that the company will survive and prosper.

c. Allows the company to gain local advantages such as product adaptation or production effectiveness.

First mover advantage includes all of the following EXCEPT a. Technological leadership. b. First access to natural and other resources. c. Better ability to forecast market conditions. d. Switching costs.

c. Better ability to forecast market conditions.

Global start-ups occur when a. Companies have consistent licensing agreements. b. Companies start exporting as soon as they receive their first order. c. Companies begin as multinationals. d. Companies move rapidly through the stages of internationalization.

c. Companies begin as multinationals.

A strategic competitive advantage for breaking into the established pattern of commercial activity is a/an a. Low cost strategy. b. Differentiation Strategy. c. Entry wedge. d. Participation strategy.

c. Entry wedge.

It is now easier to overcome the barriers to small business internationalization because of all of the following reasons EXCEPT a. There are more government programs that support small business exporting and sales. b. Trade agreements (such as NAFTA) are making international trade less complex. c. Larger organizations are increasingly more willing to share their global expertise with smaller ones. d. There is a wealth of information regarding international opportunities such as those available on the World Wide Web.

c. Larger organizations are increasingly more willing to share their global expertise with smaller ones.

A small business global culture occurs when a. Small businesses face global competition. b. Key decision makers view competition as more domestic than global. c. Organizations have managerial and worker values that view strategic opportunities as global and not just domestic. d. Managers give priority to the relevance of national boundaries when conducting international business.

c. Organizations have managerial and worker values that view strategic opportunities as global and not just domestic.

Small business barriers to internationalization include all of the following EXCEPT a. Small size means limited financial and personnel resources for international operations. b. Top managers with limited international experience. c. Positive attitudes of top managers about becoming multinationals. d. Lack of sufficient scale to produce goods or services as efficiently as large companies.

c. Positive attitudes of top managers about becoming multinationals.

Future Tech International sells high tech products in Latin America, a market traditionally ignored by many high tech companies. What successful copycat strategy does this move represent? a. Acquiring existing businesses b. Becoming a dedicated distributor c. Seeking abandoned or ignored markets d. Being the first to change to a new standard

c. Seeking abandoned or ignored markets

The small business advantage refers to a. The energy and creativity entrepreneurs can put in their multinational operations. b. The ease by which small companies can become global start-ups. c. The speed by which entrepreneurs can react to changing conditions and capture significant sales before larger companies can react. d. The number of venture capitalists willing to invest in successful small businesses.

c. The speed by which entrepreneurs can react to changing conditions and capture significant sales before larger companies can react.

Although large businesses have more resources, small businesses have the advantage of: a. size. b. time. c. speed. d. a global culture.

c. speed.

Copycat businesses a. Follow the "me too" strategy. b. Adapt existing products or services to attract customers. c. Find a niche or slight innovation to gain market share from existing businesses. d. All of the above

d. All of the above

All of the following are first mover advantages EXCEPT a. First mover advantages gives the company first access to natural resources. b. First mover advantages gives the company first access to social resources. c. First mover advantages reduce switching costs. d. All of the above are first mover advantages.

d. All of the above are first mover advantages.

When demand for a small business is so high in a foreign country that it justifies setting up a local branch, which of the following stages of internationalization is the small business at? a. Export management b. Passive exporting c. Production abroad d. None of the above

d. None of the above

Successful strategies for copy cats include all of the following EXCEPT a. Being the first to change to a new standard. b. Transferring the location. c. Seeking abandoned or ignored market. d. Selling products at a global level.

d. Selling products at a global level.

When a company sets up a sales branch in a foreign country, it is at what stage of the internationalization of the small entrepreneurial business? a. Stage 1 b. Stage 2 c. Stage 3 d. Stage 4

d. Stage 4

Definitions of small businesses discussed in the text include the following EXCEPT a. Number of employees. b. Sales revenue. c. Industry. d. Type of product or service.

d. Type of product or service.