International Business Chapter 12 exam 3
The home replication strategy is often employed as a means of extending a product's life cycle in a foreign market and to replicate home-market success. T/F
True
When using a multidomestic strategy, products and services are carefully adapted to suit the unique needs of each country. T/F
True
With a global strategy, headquarters seeks substantial control over its country operations in order to minimize redundancy and achieve maximum efficiency, learning, and integration worldwide T/F
True
Brogj Inc. is a cosmetics manufacturer based in California, United States. The firm varies its products to suit the different conditions abroad. Brogj is an example of a ________. A) multidomestic industry B) regional industry C) global industry D) globally integrated industry
A) multidomestic industry
Global strategy is an approach to internationalization in which headquarters delegates considerable autonomy to each country manager, allowing him or her to operate independently and pursue local responsiveness. T/F
False
Headquarters of a firm is the primary contributor to decisions about local market research. T/F
False
In a multidomestic strategy, there is maximum pressure on headquarters staff because there is little incentive for decision making by individual managers. T/F
False
One of the advantages of a global matrix structure is that it provides better management of subsidiaries or products, or operations in many foreign markets T/F
False
Organizational culture refers to managerial routines, behaviors, and mechanisms that allow the firm to function as intended T/F
False
Visionary leadership is more complex and important in domestic firms than global firms because corporate headquarters is where major decisions are made T/F
False
When using a home replication strategy, firms delegate autonomy to managers in each foreign unit, allowing them to operate independently and pursue local responsiveness T/F
False
Coordinating the international value-chain activities of a firm across multiple countries to achieve maximum efficiency is known as ________. A) local responsiveness B) global integration C) adaptation D) country-by-country responsiveness
B) global integration
Which of the following is characteristic of a global industry? A) A small number of major players compete head-on in multiple markets. B) Competition is designed on a country-by-country basis. C) Numerous firms compete within the industry worldwide. D) Different marketing activities are designed to meet local needs across the globe.
A) A small number of major players compete head-on in multiple markets
________ refers to lowering the cost of the firm's operations and activities on a global scale. A) Efficiency B) Protectionism C) Flexibility D) Currency control
A) Efficiency
Quik Meal is a fast-growing MNE that manufactures and sells energy gels for consumption by serious athletes, such as marathoners and triathletes. The energy gels produced by Quik Meal taste much better than the gels sold by other firms, which has led to an increase in sales. Managers and executives with Quik Meal need to determine the best organizational structure for the young firm. Quik Meal has subsidiaries in Japan and Brazil, while company headquarters are based in San Francisco. Which of the following questions would be more important for Quik Meal executives to evaluate when determining whether to centralize or decentralize the firm's structure? A) How much modification is needed for Quik Meal products in Japan and Brazil? B) How many athletes from each country participated in the Olympics? C) What sports drinks are available and popular in Asia? D) What is the possibility of Quik Meal establishing a subsidiary in India?
A) How much modification is needed for Quik Meal products in Japan and Brazil?
Which of the following is necessary for local responsiveness to effectively increase a firm's competitiveness? A) Local managers need to be able to make decisions based on local needs. B) Corporate executives must standardize marketing and merchandising. C) Employees must be hired and trained only within a local region. D) A firm's bankers and financial managers must be locally based.
A) Local managers need to be able to make decisions based on local needs.
Which of the following characterizes a multidomestic strategy? A) Subsidiary managers adapt products and services to meet local needs. B) Management practices are universal across local businesses. C) Firm executives control all subsidiaries to maximize efficiency. D) The firm allows subsidiaries to standardize products and services across countries.
A) Subsidiary managers adapt products and services to meet local needs.
Which of the following is an example of a global industry? A) automobiles B) beverages C) publishing D) retailing
A) automobiles
The Ace Children's Clothing Company is a mature MNE that has been manufacturing and selling children's clothing in Ace stores around the world for 30 years. Ace has seen a downturn in global sales recently due to trendy adult clothing companies branching out into children's clothing. The Ace board of directors is interviewing candidates to replace the outgoing CEO. The board wants a CEO who will take Ace into the future and pull customers back into Ace stores. Two candidates are being interviewed for the position: Dan Elizarde and Tanya Carson. Tanya and Dan have comparable executive experience with retail clothing companies. Therefore, the board will be basing its final decision on visionary leadership skills. During the interview, Dan states that he expects Ace to surpass the competition in two years if he becomes CEO. Which of the following traits does Dan most likely exhibit with his statement that might appeal to the board of directors? A) commitment to the success of Ace B) arrogance about his abilities to help Ace C) recognition of the homogeneity across communities D) subjective ethical standards
A) commitment to the success of Ace
Which of the following is a characteristic of a global team? A) culturally diverse B) similarly trained C) domestically based D) constant face-to-face interaction
A) culturally diverse
In which of the following are substantial autonomy and decision making authority delegated to a firm's subsidiaries around the world? A) decentralized approach B) global strategy C) transnational strategy D) nationalization
A) 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 most centralized? A) decision about building factories in Cambodia B) decision about hiring a marketing manager for its India operations C) decision to open a retail store in Vietnam D) decision about marketing newly developed products for the Chinese market
A) decision about building factories in Cambodia
Which of the following organizational arrangements for foreign operations is most closely associated with home replication strategy? A) export department B) international division C) geographic area structure D) product structure
A) export department
Which of the following is a disadvantage of a geographic area structure? A) geographic area managers' lack of global orientation for developing and managing products B) limited communications and coordination among the subsidiaries within each geographic region C) minimal balance between global integration and local adaptation D) decreased responsiveness to customer needs and wants in each regional/local market
A) geographic area managers' lack of global orientation for developing and managing products
90) In which of the following organizational structures does an employee at a foreign subsidiary report to both a local manager and a corporate manager? A) global matrix structure B) functional structure C) home replication structure D) multidomestic structure
A) global matrix structure
In the ________ strategy, a firm views international business as separate from, and secondary to, its domestic business. A) home replication B) multilocal C) global D) transnational
A) home replication
The Ace Children's Clothing Company is a mature MNE that has been manufacturing and selling children's clothing in Ace stores around the world for 30 years. Ace has seen a downturn in global sales recently due to trendy adult clothing companies branching out into children's clothing. The Ace board of directors is interviewing candidates to replace the outgoing CEO. The board wants a CEO who will take Ace into the future and pull customers back into Ace stores. Two candidates are being interviewed for the position: Dan Elizarde and Tanya Carson. Tanya and Dan have comparable executive experience with retail clothing companies. Therefore, the board will be basing its final decision on visionary leadership skills. Which of the following characteristics should the winning candidate most likely possess if Ace executives desire a CEO with a global mind-set? A) open-minded about diversity B) subjective ethical standards C) fluency in two languages D) proponent of cultural imperialism
A) open-minded about diversity
Organizational culture is ________. A) the pattern of shared values, behavioral norms, systems, policies, and procedures that employees learn and adopt B) an approach in which a firm views international business as separate from, and secondary to, its domestic business C) a reporting structure inside the firm that specifies the links between people, functions, and processes D) an organizational design in which all international activities are centralized within one division in the firm, separate from domestic units
A) the pattern of shared values, behavioral norms, systems, policies, and procedures that employees learn and adopt
Extra Clean Soap Company has been manufacturing soap products, such as dishwashing liquid, bath soap, and shampoo, for over 20 years from its facility and headquarters in Dublin, Ireland. A recent opportunity allowed Extra Clean to purchase soap companies in Taiwan and India. Extra Clean is now servicing both foreign and domestic markets with its products and manufacturing in all three locations. Recent reports from managers in the foreign facilities indicate that Extra Clean sales in Taiwan and India are low due to a lack of local responsiveness. Extra Clean managers from Ireland, India, and Taiwan are having a teleconference in an attempt to devise a strategy to improve the profitability of Extra Clean. Which of the following most likely supports Extra Clean implementing a multidomestic strategy instead of a global strategy? A) The Taiwan manufacturing facility requires an update in equipments. B) Extra Clean managers lack internationalization experience. C) Recent studies have shown that consumer trends in Taiwan, India, and Ireland are converging. D) Foreign rivals of Extra Clean compete at a global level.
B) Extra Clean managers lack internationalization experience.
Which of the following best supports the decision by the Ace board of directors to hire Tanya as the CEO? A) Tanya's recognition of the homogeneity across communities B) Tanya's innovative ideas and ability to spot future retail trends C) Tanya's subjective moral and ethical standards D) Tanya's competitive personality and dogmatic determination
B) Tanya's innovative ideas and ability to spot future retail trends
Which of the following is true about global teams? A) It is a locally distributed group of employees charged with specific problem solving that affects company operations at the domestic scale. B) To develop global strategies, the team should include culturally diverse managers whose business activities span the globe. C) Strategic global teams focus on the efficient and effective operation of the business across the whole network. D) Operational global teams identify or implement initiatives that enhance the long-term direction of the firm in its global industry.
B) To develop global strategies, the team should include culturally diverse managers whose business activities span the globe.
A firm's headquarters is the primary contributor to ________. A) local market research B) capital planning C) human resource management D) compliance with local laws and regulations
B) capital planning
Which of the following activities would be considered last by a manager while developing strategies? A) analyzing the particular challenges that confront the firm B) deciding how best to contend with competitors C) examining the firm's specific strengths and weaknesses D) analyzing the particular opportunities for the firm
B) deciding how best to contend with competitors
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? A) decision about building factories in Cambodia B) decision about hiring a marketing manager in the United States C) decision to open a retail store in Vietnam D) decision about developing new products for foreign markets
B) decision about hiring a marketing manager in the United States
Marketing the same product worldwide is most appropriate for the ________ industry. A) furniture B) electronics C) food and beverage D) retailing
B) electronics
In which of the following types of organizational arrangements would a firm most likely have a division that focused solely on global marketing? A) product structure B) functional structure C) geographic area structure D) international division
B) functional structure
In establishing a firm's organizational structure, a fundamental issue is ________. A) how to optimize local responsiveness and flexibility B) how much decision-making responsibility the firm should retain at headquarters C) how to leverage natural endowments available to the firm D) how the firm should invest in human assets
B) how much decision-making responsibility the firm should retain at headquarters
Which of the following is an advantage of a multidomestic strategy? A) standardized organizational culture B) minimal pressure on headquarters staff C) minimum redundancy D) low operating costs
B) minimal pressure on headquarters staff
Which of the following would exert pressure on a firm to become locally responsive? A) the need to monitor and respond to global competitors B) the need to cater to local customer needs C) the desire to capitalize on converging consumer trends D) the desire to provide uniform service to consumers
B) the need to cater to local customer needs
GramTech Solutions is a software development firm based in the United States. The firm's CEO, David Ghaster, wants to open an outlet in India. Being a visionary leader, he would ________. A) require employees to discover a strategic vision for the firm B) understand the market and culture in India and develop international supermanagers C) commit minimum resources for international ventures because of the currency risk involved D) cut down on employees' cross-cultural training to save capital to open a firm in India
B) understand the market and culture in India and develop international supermanagers
Which of the following best characterizes the concept of global integration? A) Effective global competition requires that products be specialized based on the market. B) Making adjustments for unique markets is an essential element of international business. C) Creating variations of the same product for different markets is an unnecessary expense. D) The differences in market-to-market distribution channels must be accommodated.
C) Creating variations of the same product for different markets is an unnecessary expense.
Extra Clean Soap Company has been manufacturing soap products, such as dishwashing liquid, bath soap, and shampoo, for over 20 years from its facility and headquarters in Dublin, Ireland. A recent opportunity allowed Extra Clean to purchase soap companies in Taiwan and India. Extra Clean is now servicing both foreign and domestic markets with its products and manufacturing in all three locations. Recent reports from managers in the foreign facilities indicate that Extra Clean sales in Taiwan and India are low due to a lack of local responsiveness. Extra Clean managers from Ireland, India, and Taiwan are having a teleconference in an attempt to devise a strategy to improve the profitability of Extra Clean. Which of the following most likely supports Extra Clean implementing a transnational strategy? A) The country managers have been trained in the United States. B) Extra Clean is a highly centralized organization. C) Extra Clean could reduce the number of global suppliers. D) There is high local competition in each of the markets.
C) Extra Clean could reduce the number of global suppliers.
Converging buyer characteristics, growing acceptance of global brands, and increased diffusion of uniform technology make it difficult to pursue a global strategy. T/F
False
Which of the following is true about foreign units of a company using a multidomestic strategy? A) They are centralized to ensure efficiency and learning. B) They are highly controlled by the company's headquarters. C) They are autonomous and operate independently. D) They pursue global integration.
C) They are autonomous and operate independently.
Strategy is ________. A) a quality of executive management that provides inspirational guidance and motivation to personnel, leading the firm to a better future B) the pattern of shared values, behavioral norms, systems, policies, and procedures that employees learn and adopt C) a planned set of actions that managers employ to make best use of the firm's resources and core competencies to gain competitive advantage D) the procurement of selected value-chain activities, including production of intermediate goods or finished products, from independent suppliers
C) a planned set of actions that managers employ to make best use of the firm's resources and core competencies to gain competitive advantage
A firm would be compelled to seek global integration when it has to ________. A) adjust to cultural differences B) cater to local customer needs C) capitalize on converging consumer trends and universal needs D) accommodate differences in distribution channels
C) capitalize on converging consumer trends and universal needs
Which of the following gives headquarters considerable authority and control over the firm's activities worldwide? A) nationalization B) home replication strategy C) centralized approach D) decentralized approach
C) centralized approach
Global integration is the coordination of the firm's value-chain activities across multiple countries to achieve worldwide efficiency, synergy, and ________ in order to take advantage of similarities between countries. A) capability B) expertise C) cross-fertilization D) redundancy
C) cross-fertilization
International division managers usually oversee ________. A) large-scale investments B) product development C) distributor relationships D) corporate accounting
C) distributor relationships
Which of the following is an example of a multidomestic industry? A) chemicals B) telecommunications C) fashion D) aerospace
C) fashion
The computer industry is an example of a ________. A) locally responsive industry B) multidomestic industry C) global industry D) country-by-country competitor
C) global industry
Due to the competition involved in global industries, marketing strategies are determined by the unique needs and regulations of each nation T/F
False
The Ace Children's Clothing Company is a mature MNE that has been manufacturing and selling children's clothing in Ace stores around the world for 30 years. Ace has seen a downturn in global sales recently due to trendy adult clothing companies branching out into children's clothing. The Ace board of directors is interviewing candidates to replace the outgoing CEO. The board wants a CEO who will take Ace into the future and pull customers back into Ace stores. Two candidates are being interviewed for the position: Dan Elizarde and Tanya Carson. Tanya and Dan have comparable executive experience with retail clothing companies. Therefore, the board will be basing its final decision on visionary leadership skills. During the interview, Tanya describes her idea of expanding the Ace line into maternity clothes to draw in expecting mothers. Which of the following traits of a visionary leader is Tanya most likely exhibiting? A) subjective morality B) cultural imperialism C) global strategic vision D) dogmatic view
C) global strategic vision
Which of the following is the most critical asset of any organization? A) goodwill B) computer programs C) human capital D) bonds
C) human capital
Which of the following is a disadvantage of a multidomestic strategy? A) lack of opportunities to delegate tasks B) high pressure on headquarters staff C) inefficient manufacturing D) standardized products in culturally different markets
C) inefficient manufacturing
To establish positive relationships with country managers, senior corporate managers should ________. A) transfer employees to different countries to maintain a centralized power structure B) encourage subjective ethical and moral standards across different countries C) invite local managers to discuss their experiences at regional and global conferences D) minimize decision making at the local level
C) invite local managers to discuss their experiences at regional and global conferences
Which of the following is a characteristic of a transnational strategy to internationalization? A) minimal pressure on headquarters staff B) decision making is delegated to local managers C) local responsiveness with central control D) international business is viewed as separate from, and secondary to domestic business
C) local responsiveness with central control
Companies that proactively build a global organizational culture will ________. A) promote independent headquarters and subsidiaries to avoid miscommunication B) subscribe to ethical standards developed in the home market to avert misunderstanding C) maintain a global perspective in all major initiatives D) adopt multiple corporate languages for business communications
C) maintain a global perspective in all major initiatives
A firm's subsidiary is the primary contributor to ________. A) transfer pricing B) capital planning C) marketing D) global profitability
C) marketing
The managerial routines, behaviors, and mechanisms that allow a firm to function as intended are known as ________. A) organizational designs B) organizational culture C) organizational processes D) organizational structure
C) organizational processes
Graham Technologies is a U.K.-based consumer electronics manufacturer. The company markets netbooks, smartphones, laptops, and desktops in the international market and each product division operates as a stand-alone profit center with substantial autonomy. This is an example of a ________. A) global matrix structure B) functional structure C) product structure D) geographic area structure
C) product structure
Firms that emphasize global integration make and sell ________. A) unique products that follow a multilocal strategy B) an excessive variety of complex products C) products that require minimal adaptation D) products designed specifically for local markets
C) products that require minimal adaptation
Managers who exemplify an open-minded attitude and who appreciate cultural diversity are described as applying a global ________. A) sensitivity B) standard C) posture D) mind-set
D) mind-set
Which of the following is an advantage of an international division structure? A) It leverages the benefits of global strategy while responding to local needs. B) It allows better balance between global integration and local adaptation. C) It requires a small resource commitment. D) It allows concentration and development of international expertise.
D) It allows concentration and development of international expertise.
Efficiency refers to emphasizing consensus-based decision making and problem solving, in which managers readily share their knowledge T/F
False
Quik Meal is a fast-growing MNE that manufactures and sells energy gels for consumption by serious athletes, such as marathoners and triathletes. The energy gels produced by Quik Meal taste much better than the gels sold by other firms, which has led to an increase in sales. Managers and executives with Quik Meal need to determine the best organizational structure for the young firm. Quik Meal has subsidiaries in Japan and Brazil, while company headquarters are based in San Francisco. Which of the following strengthens the decision by Quik Meal executives to centralize operations? A) Quik Meal offers five different flavors of energy gels for athletes. B) Quik Meal executives report a steady rate of sales in the U.S. market. C) Quik Meal country managers report few requests to alter product ingredients. D) Quik Meal products use the same trademark and packaging in every country.
D) Quik Meal products use the same trademark and packaging in every country.
Extra Clean Soap Company has been manufacturing soap products, such as dishwashing liquid, bath soap, and shampoo, for over 20 years from its facility and headquarters in Dublin, Ireland. A recent opportunity allowed Extra Clean to purchase soap companies in Taiwan and India. Extra Clean is now servicing both foreign and domestic markets with its products and manufacturing in all three locations. Recent reports from managers in the foreign facilities indicate that Extra Clean sales in Taiwan and India are low due to a lack of local responsiveness. Extra Clean managers from Ireland, India, and Taiwan are having a teleconference in an attempt to devise a strategy to improve the profitability of Extra Clean. Which of the following questions would be most important for Extra Clean managers to evaluate the integration-responsiveness framework? A) What types of global IT infrastructure and tools should be used in Dublin to maintain efficiency? B) Should the Extra Clean headquarters relocate to Taiwan for six months? C) Would the foreign managers benefit from a training session in Ireland? D) What type of balance is appropriate between headquarters and country managers?
D) What type of balance is appropriate between headquarters and country managers?
A culturally diverse team would ________. A) use diverse languages for business communications across various teams across the globe B) follow country-specific ethical standards across the globe C) use local employees, for accountability, for all major company decisions D) create a global view inside the firm while remaining in touch with local realities
D) create a global view inside the firm while remaining in touch with local realities
When developing strategies, managers start by ________. A) configuring and coordinating the firm's activities around the world B) deciding which customers to target C) analyzing the particular opportunities and challenges that confront the firm D) examining the firm's specific strengths and weaknesses
D) examining the firm's specific strengths and weaknesses
A ________ strategy is characterized by substantial control over country operations by headquarters in order to increase efficiency and integration. A) multilocal B) home replication C) multidomestic D) global
D) global
An advantage to firms that use a product structure arrangement is that ________. A) it requires a small resource commitment B) duplication of corporate support functions for each product division is avoided C) there is limited possibility for excessive focus on products D) individual product lines are coordinated and managed globally
D) individual product lines are coordinated and managed globally
Managing a firm's value-chain activities on a country-by-country basis to address diverse opportunities and risks is known as ________. A) global integration B) global aggregation C) regional coordination D) local responsiveness
D) local responsiveness
Which of the following would exert pressure on a U.S.-based clothing company, ZSource Ltd., to become locally responsive? A) to seek cost reduction through scale economies B) to conduct global sourcing of raw materials, components, energy, and labor C) to monitor and respond to global competitors D) to meet host government requirements and regulations
D) to meet host government requirements and regulations
Global integration is a plan of action that accounts for competition on a country-by-country basis. T/F
False
An export department structure requires considerable resource commitment. T/F
False
Companies that proactively build a global organizational culture subscribe to subjective ethical and moral standards T/F
False
A centralized approach means substantial autonomy and decision-making authority are delegated to the firm's subsidiaries around the world T/F
False
A company can be compelled to be locally responsive in individual countries to provide uniform services to global customers. T/F
False
A multidomestic industry is one in which competition takes place on a regional or worldwide basis T/F
False
A company can be compelled to globally integrate its activities to seek cost reduction through scale economies T/F
True
By standardizing international operations as much as possible yet being adaptable to the needs of local markets, a firm is utilizing a transnational strategy of globalization. T/F
True
Decisions about local products that will be sold in only one country are typically the joint responsibility of corporate and country-level managers, with the latter taking the lead role. T/F
True
During the recent global financial crisis, efficiency and flexibility became particularly important to the success of multinational firms. T/F
True
Firms that want to become globally competitive must seek simultaneously three strategic objectives—efficiency, flexibility, and learning. T/F
True
Geographic area structure is an organizational design in which management and control are decentralized to the level of individual geographic regions. T/F
True
Global IT infrastructure and tools such as intranets, the Internet, and electronic data interchange ensure that distant parts of the global network share knowledge and learn from each other T/F
True
In order to facilitate shared decision-making between headquarters and country managers, corporate representatives should often visit subsidiary locations T/F
True
Organizational structure describes the reporting relationships inside the firm that specify the links between people, functions, and processes. T/F
True
Sourcing inputs from large-scale, centralized suppliers allows firms to obtain economies of scale, more consistent quality, lower costs, and generally more efficient operations T/F
True
Strategic global teams identify or implement initiatives that enhance the long-term direction of the firm in its global industry. T/F
True
