Chap 10
Which of the following factors help define the administrative and political distance between two countries?
The absence or presence of political hostilities The absence or presence of shared monetary associations The strength of legal or financial institutions
Companies from wealthy countries benefit from cross-border trade with other wealthy countries when their competitive advantage is based on which of the following factors?
economies of experience economies of scale standardization
National culture, according to Geert Hofstede, can be defined as different groups' distinctive
"programming of the mind"
Which of the following statements about workers in the United States versus workers in other countries is true?
A manufacturing worker in the United States makes several times what a similar worker in China.
The decision framework that is based on the relative distance between home and a foreign target country is the
CAGE distance framework
Which country experienced rapid economic growth in the early 21st century and now challenges the United States for global economic supremacy?
China
Which of the following have helped make globalization possible?
Falling trade barriers Reductions in transportation costs Advances in telecommunications
Which of the following statements about pursuing international expansion is true?
It can enhance a firm's competitive advantage.
Relaxicab Inc. is a 100-year-old, multinational enterprise (MNE). Which of the following activities would the company most likely have been involved in during the stage of Globalization 2.0?
It would have increased its local responsiveness to country-specific circumstances by duplicating business functions overseas.
Which of the following are distinctive features of globalization 3.0?
MNEs reorganize into a more seamless global enterprise. Firms create global networks of local expertise. Technology helps reduce communication distances.
Which of the following statistics regarding MNEs are correct?
They pay 25% of the wages in the United States. They account for 11% of the private sector employment growth since 1990. They make up 74% of the private sector R&D.
Which of the following have the effect of shrinking the administrative and political distance between countries?
a colony-colonizer relationship trade agreements shared currency
Calculating cultural distance involves comparing the cultures of which of the following?
a firm's home country a targeted host country
When firms from wealthy countries trade with firms from poor countries, they benefit from economic
arbitrage
Spex is a leading manufacturer of eyeglasses. Spex is based in the United States but opens a facility in a Japanese city known for cutting-edge eyeglass innovations. Spex is counting on which of the following?
benefiting from location economies
At a basic level, the concept of "liability of foreignness" refers to the additional
cost of doing business in an unfamiliar cultural and economic environment
Under Globalization 3.0, MNEs freely locate business functions anywhere in the world based on an optimal mix of which factors?
costs PESTEL factors capabilities
The cultural disparity between the internationally expanding firm's home country and its targeted host country is known as
cultural distance
When looking at the modes of foreign-market entry, one could conclude that
exporting might be the earliest stage of commitment because it allows the firm to test whether a foreign market is ready for its products
Porter's diamond framework to explain national competitive advantage includes four interrelated factors: demand conditions, competitive intensity in a focal industry, related and supporting industries/complementors, and
factor conditions
Which of the following dimensions are considered in the CAGE distance framework?
geographic distance cultural distance economic distance admin & political distance
Since expanding internationally, IKEA has shifted focus, concentrating on effectively managing a global supply chain in order to achieve economies of scale. This is reflective of a(n) ______ strategy.
global-standardization
The process of closer integration and exchange between different countries and peoples worldwide, made possible by falling trade and investment barriers, advances in telecommunications, and reductions in transportation costs, is known as
globalization
In order for a company to be considered a multinational enterprise, it must operate
in more than one country
Due to globalization, the world's market economies are becoming more
integrated and interdependent
IKEA offers the same products in every market. This indicates that IKEA has followed a(n) ______ strategy.
international
If a firm's goal is to leverage home-based core competencies in foreign markets, it should pursue a(n) ______ strategy.
international
Benicio's Burritos is a leader in the Mexican fast-food category in the United States. It decides to expand internationally, starting in Japan. Benicio's Burritos fails within a year, learning later that Mexican food is uncommon in Japan and that the flavor profiles are not compatible with Japanese palates. The failure of Benicio's Burritos can be attributed to which of the following?
liability of foreignness
The benefits to be accrued from locating value chain activities in the world's optimal geographies for a specific activity are known as
location economies
In ______ societies, competitiveness, assertiveness, and the exercise of power are considered ideal.
masculine
A company that deploys resources and capabilities in the procurement, production, and distribution of goods and services in at least two countries is a ______.
multinational enterprise
Despite a growing belief in the death-of-distance hypothesis, there remains evidence that certain countries remain leaders in specific industries and maintain a kind of ______ advantage.
national competitive
Global events in the 2000s and 2010s contributed to a rise of ______ political policies in the United States and Europe which could significantly alter the global trade landscape in coming years.
nationalist
When companies face a highly competitive environment at home, they are more likely to
outperform global competition that lacks such intense domestic competition
In a global-standardization strategy, the main competitive element is
reduced cost
As MNEs compete internationally, a focus on local responsiveness allows them to do which of the following?
tailor product offerings to fit local preferences and requirements
Which of the following were black swan events that occurred in the early 21st century and helped reshape the global economy?
the Global financial crisis the European refugee crisis the European debt crisis
In the late 2010s, a trade war between which two countries threatened to upend decades of globalization and international trade?
the United States and China
Which of the following are common reasons for companies to make foreign direct investments?
to avoid import restrictions to reduce labor costs to reduce tax burdens
Which of the following are reasons firms expand internationally?
to gain access to low-cost input factors to develop new competencies to gain access to a larger market
A(n) ______ strategy focuses on integration at the business level by attempting to reconcile product differentiations at low cost.
transitional
U.S. MNEs have a disproportionately positive impact on the U.S. economy.
true
Foreign direct investments are investments in
value chain activities abroad
Which of the following is the most important determinant of economic distance?
wealth and per capita income