BUad 398 exam 3

f you own more than ________ percent of the firm's share, you are considered as a large-block shareholder.

5

Co-determination law gives the right to workers to participate in the management of the companies which they work for. This law exists in ______

Germany

What is international corporate strategy

International corporate strategy focuses on the scope of a firm's operations through both product and geographic diversification

Which of the following is NOT an internal governance mechanism?

Market for corporate control

Corporate governance primarily revolves around the relationship between which of the following two parties?

Shareholders and managers

True or False: The appropriate organizational structure for the global standard strategy is the global product structure.

True

The two criteria used to distinguish between the four basic multinational strategies are pressures due to:

cost and local adpation

ane Doe is the CEO of Company A. When she was hired, she made a deal with Company A. If Company gets acquired, the acquiring company must pay $10 million to Ms. Doe. This is a defense tactic known as a(a)_____________.

golden parachute

The problems associated with exporting include

high transportation costs and the expense of tariffs.

There are three types of directors within a board: Independent (outside), related, and inside. Which one is involved with a firm's everyday activities?

inside

One of the primary disadvantages of the global strategy and worldwide product divisional structure is that

it is difficult to respond effectively to local market needs and preferences.

what is transnational strategy

seeks to achieve both global efficiency (through global integration) and local responsiveness.

True or false: When a firm pursues a glocal (transnational) strategy, the disadvantages include high costs.

true

What is the challenge in implementing the integrated cost leadership/differentiation strategy?

Achieving a low-cost position while offering unique product features

What is managerial opportunism

An attitude and a set of behaviors seeking to maximize self-interests with guile

Which organizational structure is characterized by simple reporting relationships, centralized staff, and a strong focus on process improvements to achieve efficiencies?

Functional structure for cost leadership

Which organizational structure emphasizes cross-functional product development teams, decentralized decision-making, and a strong focus on marketing and product R&D?

Functional structure for differentiation

Ichabod Industries has a Latin American Division, a European Division, an Industrial Lubricants Division, and a Food Service Division. Ichabod Industries probably uses which organizational structure? Correct Answer

Hybrid combination

Describe the market for corporate control (external corporate governance mechanism) and its implications for organizations.

If all three internal corporate governance mechanisms fail, the firm will underperform and will be a target for acquisition. The managers of the target company will consider this as a threat, as they might be fired after an acquisition. Therefore, the managers would try to increase the performance of the firm upon the threat.

What are the three internal corporate governance mechanisms?

Managerial compensation, ownership concentration, a board of directors

What trends exist regarding executive compensation?

More stock options and performance-linked compensation

Alfred Chandler found that firms grow in a predictable pattern and that the firm's growth patterns determine its structural form. Which of the following forms corresponds to the FINAL stage in Chandler's theory?

Multidivisional

Global Hotels Inc. operates multiple hotel brands and services worldwide. By implementing an organization structure, they enjoy the benefits of focus, specialization, and efficient decision making and accountability. Which organizational structure is widely adopted to support implementation of related and unrelated diversification strategies?

Multidivisional structure

What is the relationship between strategy and structure?

Structure follows strategy.

1. Then, what are location economies?

The economies that arise from performing a value-creation activity in the optimal location for that activity in the world

What trends exist regarding the external board of directors vs. internal board of directors

The percentage of the external board of directors is increasing.

In China, Starbucks is standardizing its operations while simultaneously decentralizing some decision-making responsibility to local levels to meet customers' tastes. Starbucks is following which type of international corporate-level strategy?

Transnational

IKEA is a global furniture retailer with more than 300 outlets in 39 countries and regions. IKEA focuses on lowering its costs as well as understanding customer needs, especially younger ones. How are IKEA's international strategy and appropriate organizational structure best described, respectively

Transnational; combination

McDonald's is known for its standardized menu items, such as the Big Mac and Chicken McNuggets, which are available worldwide. However, the company also recognizes the importance of adapting its offerings to local preferences to cater to diverse consumer tastes. Which organizational structure is well-suited to implement the multidomestic strategy by tailoring products to local preferences?

Worldwide geographic area structure

Managers of a firm are __________ and shareholders the firm are ____________. This creates a(n)____________ relationship.

agents; principals; agency

The market for corporate control can work when ________________

all internal governance mechanisms failed

What is the global strategy

assumes more standardization of product demand across country boundaries.

One disadvantage of the functional structure is that

communication and coordination are difficult among organizational functions.

A global corporate-level strategy differs from a multidomestic corporate-level strategy in that in a global strategy

competitive strategy is dictated by the home office.

In global standardization strategy, a firm focus on ________.

cost reduction

As ownership of the corporation is diffused, shareholders' ability to monitor managerial decisions

decreases

The center firm in a strategic network of vertical relationships might be expected to undertake all of the following EXCEPT:

decreasing communications between network members to reduce communication costs

When there is free cash flow, shareholders tend to prefer that free cash flow be used for _________.

dividends

This mode of international expansion is characterized by shipping your products to an international partner for distribution and carries very little risk. Correct!

exporting

Implementing the multidomestic strategy requires decentralization to

facilitate the tailoring of products to the demand in local markets.

True or False:A global (standardization) strategy is an international strategy in which strategic and operating decisions are decentralized to the strategic business units in individual countries or regions, allowing each unit the opportunity to tailor products to the local market

false

All the following are liability of foreignness issues firms face when entering foreign markets except:

familiar operating environments

In exchange for a fee, royalty, an/or percentage of profits, companies allow businesses/entrepreneurs to use their intellectual property while also benefiting from corporate activities and operational support throughout their ownership. This is:

franchising

The repurchase of the target firm's shares of stock that were obtained by the acquiring firm at a premium in exchange for an agreement that the acquirer will no longer target the company for takeover is called

greenmail.

The transnational strategy is becoming increasingly necessary to compete in international markets for all of the following reasons EXCEPT:

it is easy to use because of its unifying goals.

A conglomerate of business in Japan uses cross-shareholdings and make a network. This is called as ________.

keiretsu

Ownership concentration is determined by both the number of

large-block shareholders and the total percentage of shares they own.

Allowing another organization to leverage your brand, trademark, a patent, or some other form of intellectual property in exchange for a royalty or fee would be classified as:

licensing

If a firm design a managerial compensation with a high stock option, assuming an agency problem, will the top-level manager take more risks or fewer risks?

more risks

With the global dispersion of value chains, this is the act of paying a different company in a different country to complete an activity that was formerly handled within your own organization domestically.

outsourcing and offshoring

Company A tried to acquire company B without being solicited. Company B decided to make its company less attractive. This defense tactic is called as a(n)____________. Correct!

poison pill

The primary disadvantage of the multidomestic strategy and worldwide geographic area structure relates to limited

potential for global efficiency.

A small family-owned restaurant is called Tasty Bites. Its owner, Mrs. Smith, plays the role of the owner-manager and is responsible for making all major decisions in the restaurant. Which organizational structure is characterized by the owner-manager making all major decisions and having informal relationships with employees?

simple structure

What is a multidomestic strategy?

strategy that focuses on competition within each country in which the firm operates.

A multidomestic corporate-level strategy is one in which

the firm customizes the product for each country in which it competes.

Why does a firm enter global markets

· To take advantage of globalization · To increase market size · To gain the economies of scale · To take advantage of location economies · To learn from the new environment and apply learning somewhere else