EXAM 3 - CH 7, 8, 9

Choosing how best to enter a new business 1) has no accepted set of guiding criteria or questions to ask. 2) is based solely on identifying entry barriers. 3) is best determined by the intuition of upper management. 4) depends partially on determining the least costly mode of entry.

4) depends partially on determining the least costly mode of entry.

Which of the following resulted in tighter oversight of banks and mortgage companies? 1) Banks such as Wells Fargo and Citigroup charging lenders with systematic fraud 2) A court settlement that included mechanisms for monitoring lending institutions 3) An auction of high-risk loans to government investors 4) A lawsuit initiated by the attorneys general of almost every state

2) A court settlement that included mechanisms for monitoring lending institutions 4) A lawsuit initiated by the attorneys general of almost every state

Which of the following are among the four questions that need to be asked when determining how best to enter a new business? 1) Will the choice be popular with most employees? 2) Is speed an important factor in the firm's chances for successful entry? 3) Which is the least costly mode of entry, given the company's objectives? 4) Are there entry barriers to overcome?

2) Is speed an important factor in the firm's chances for successful entry? 3) Which is the least costly mode of entry, given the company's objectives? 4) Are there entry barriers to overcome?

A domestic company wishing to enter the international market may choose to license its products or services to a foreign company for which reason? 1) The company wants to minimize its involvement in a foreign market. 2) The company has no resources to enter a foreign market directly. 3) The company has the capital to assume costs associated with entering a foreign market. 4) The company's employees enjoy the risk of entering a volatile foreign market.

2) The company has no resources to enter a foreign market directly.

Corporate Strategy helps managers understand which strategy question? 1) Where should the firm expand? 2) Where should the firm compete? 3) How can the firm buy out a competitor? 4) How should the firm compete? 5) How should the firm expand?

2) Where should the firm compete?

If it is impractical for a company to adapt to the situation in a developing-country market, the company should 1) move into the market rapidly. 2) avoid that market. 3) hire new management consultants. 4) attempt to tweak the market.

2) avoid that market.

Elements of a country's infrastructure that can contribute to factor conditions include 1) rival suppliers. 2) communication. 3) buyer preferences. 4) banking systems. 5) transportation.

2) communication. 4) banking systems. 5) transportation.

Which of the following are the ways a company can enter a new business? 1) margin buying 2) internal startup 3) acquisition 4) joint ventures

2) internal startup 3) acquisition 4) joint ventures

Through coordinating partnerships with dedicated suppliers, Warby Parker have ensured quality, built a lean manufacturing operation, and built an organization that keeps buyers happy. This is an example of which triple bottom line performance metric? 1) profit/environment 2) profit/economic 3) planet/people 4) planet/environment 5) people/social

2) profit/economic

An environmental sustainability strategy can enhance a company's competitive advantage by 1) helping the company locate cost-effective sources of wage-labor in other countries. 2) promoting the company's reputation among environmentally conscious consumers. 3) boosting internal production costs, which can be passed on to the consumer. 4) sacrificing consumer needs and preferences in order to provide other social benefits.

2) promoting the company's reputation among environmentally conscious consumers.

What do companies commonly risk losing when they develop joint ventures with companies in a foreign country? 1) their standing in the community 2) their competitive advantage 3) their political backing 4) their international reputation

2) their competitive advantage

What are reasons that companies expand into foreign markets? 1) to educate employees about new cultures 2) to gain access to new customers 3) to gain access to low-cost production 4) to help lower-income countries 5) to achieve lower costs

2) to gain access to new customers 3) to gain access to low-cost production 5) to achieve lower costs

A joint venture can hamper a company's goals for global market leadership by fostering 1) a new team spirit. 2) too much dependence on a foreign partner. 3) competition among foreign rivals. 4) good relationships with suppliers and distributors.

2) too much dependence on a foreign partner.

Ethical business strategies and behavior are least likely to be present if there is 1) constant heavy pressure on company managers to meet or beat short-term performance targets. 2) a company culture that puts profitability and business performance ahead of ethical behavior. 3) confusion over local ethical standards that conflict with those of the company 4) the "business of business is business, not ethics" kind of thinking. faulty oversight that implicitly allows the overzealous

3) confusion over local ethical standards that conflict with those of the company

Corporate parents effectively contribute to the success of their businesses by 1) duplicating administrative positions within each business. 2) creating value through the increase of companywide overhead costs. 3) utilizing popular umbrella brands. 4) providing general resources that lower their operating costs.

3) utilizing popular umbrella brands. 4) providing general resources that lower their operating costs.

Determining whether the materials needed to start a business can be readily obtained by a company is an example of answering the strategy-based question 1) entry barriers to the industry. 2) speed. 3) comparative cost. 4) critical resources and capabilities.

4) critical resources and capabilities.

Governments wishing to create a favorable business climate for foreign companies will typically 1) deny construction permits for distribution facilities. 2) increase business-related operating costs. 3) enact stringent business-related regulations. 4) seek advice from business leaders.

4) seek advice from business leaders.

A cultural norm at a company can be understood as 1) a directive from a manager to engage in unethical behavior. 2) a directive from a manager to avoid unethical behavior. 3) a list of written rules that clearly outline company practices. 4) the generally accepted methods of doing business on a day-to-day basis.

4) the generally accepted methods of doing business on a day-to-day basis.

Which CSR strategy has not contributed to how Warby Parker has achieved success and competitive advantage in the high-fashion eye wear marketplace? 1) The company voluntarily evaluates itself against benchmarks in the fields of environment, workers, customers, community, and governance. 2) Their engagement in broader philanthropic initiatives has created a positive image and reputation among consumers. 3) The company is widely seen as an employer of choice. 4) They have eliminated any adverse impact on the environment stemming from their business activities. 5) Their human resource policies discourage workforce diversity.

5) Their human resource policies discourage workforce diversity.

Disney's ability to leverage its characters across its network of theme parks, media networks and movies, and consumer products is an example of a corporate 1) synergy advantage. 2) vertical advantage. 3) expansion into new geographies. 4) integration advantage. 5) parenting advantage.

5) parenting advantage.

Coca-Cola's August 2018 move to acquire Costa Coffee, an international coffee chain, meant that the acquired company had to first pass which three Tests of Corporate Advantage? 1) the capability test, the industry attractiveness test, and the shareholder value test 2) the better-off (synergy) test, the competitive advantage test, and the cost-of-entry test 3) the resource fit test, the profitability test, and the shareholder value test 4) the shareholder value test, the cost-of-entry test, and the competitive advantage test 5) the industry attractiveness test, the cost-of-entry test, and the better-off (synergy) test

5) the industry attractiveness test, the cost-of-entry test, and the better-off (synergy) test

Participating in community service activities and donating to charities are the two main requirements of maintaining good corporate citizenship. True False

False

Cultural differences are a major source of the cross-country variations that affect buyer preferences. True False

True

Which of the following statements about corporate social responsibility (CSR) are true? 1) CSR strategies are often linked to a company's core values. 2) Most major corporations, including General Mills and Starbucks, have identical approaches to corporate social responsibility. 3) Many firms organize their CSR strategies around themes that are consistent with their production or marketing strategies. 4) "Corporate citizenship" is a term commonly used to describe CSR initiatives.

1) CSR strategies are often linked to a company's core values. 3) Many firms organize their CSR strategies around themes that are consistent with their production or marketing strategies. 4) "Corporate citizenship" is a term commonly used to describe CSR initiatives.

Building production facilities in which countries presents a competitive advantage because of low-wage labor? 1) China 2) Canada 3) the United States 4) India

1) China 4) India

Which of the following allow businesses with strategic fit in supply chain activities perform better together? 1) Cooperating with common supply chain partners 2) Using a single sales force for all the businesses' products 3) Obtaining volume discounts on incoming components 4) Sharing logistical resources

1) Cooperating with common supply chain partners 3) Obtaining volume discounts on incoming components 4) Sharing logistical resources

Car manufacturers often employ a multidomestic approach and allow local managers to market the vehicles according to which of the following? 1) Cultural preferences 2) Government regulations 3) Buyer tastes 4) Competitive conditions 5) Specific company guidelines

1) Cultural preferences 2) Government regulations 3) Buyer tastes 4) Competitive conditions

What are reasons why domestic companies often have an advantage over global companies? 1) Domestic companies are familiar with local culture and consumer needs. 2) Domestic companies are familiar with the local labor force. 3) Domestic companies lack technological know-how. 4) Domestic companies are less likely to invest in cross-border coordination.

1) Domestic companies are familiar with local culture and consumer needs. 2) Domestic companies are familiar with the local labor force.

Which of the following examples show how a commitment to environmental sustainability strategies can offer opportunities for a company to develop new products or increase sales of existing products? 1) General Electric expanded sales of wind turbines. 2) Starbucks reduced employee turnover by adding a full benefits package for employees. 3) Nissan and Chevy created electric cars.

1) General Electric expanded sales of wind turbines. 3) Nissan and Chevy created electric cars.

Which of the following is an example of a multidomestic strategy? 1) Heinz ketchup in India does not have garlic and onion. 2) Mattel's black Barbie is popular in Africa. 3) Red Bull products are packaged differently for the Chinese market. 4) BMW designed its 3 Series cars for multiple markets. 5) Microsoft offers the same software programs around the world.

1) Heinz ketchup in India does not have garlic and onion.

What questions can be answered by determining the competitive value of strategic fit in diversified companies? 1) How much competitive value will come from the cross-business transfer of skills, technology, or intellectual capital? 2) Are the cost savings associated with economies of scope likely to give one or more businesses a cost-based advantage? 3) Will leveraging a potent umbrella brand or corporate image strengthen the businesses and increase sales? 4) Are there other unrelated businesses that can be added to the company's holdings for the purposes of gaining a strategic fit?

1) How much competitive value will come from the cross-business transfer of skills, technology, or intellectual capital? 2) Are the cost savings associated with economies of scope likely to give one or more businesses a cost-based advantage? 3) Will leveraging a potent umbrella brand or corporate image strengthen the businesses and increase sales?

Which of the following are among the four questions that need to be asked when determining how best to enter a new business? 1) Is speed an important factor in the firm's chances for successful entry? 2) Are there entry barriers to overcome? 3) Will the choice be popular with most employees? 4) Which is the least costly mode of entry, given the company's objectives?

1) Is speed an important factor in the firm's chances for successful entry? 2) Are there entry barriers to overcome? 4) Which is the least costly mode of entry, given the company's objectives?

Which statement is true concerning the pursuit of growth through unrelated diversification? 1) It can be misguided if the growth is not profitable growth. 2) It should be undertaken without considering the effects on shareholder value. 3) It works well as long as the growth is pursued for growth's sake. 4) It eliminates the risk that the parent company will fail.

1) It can be misguided if the growth is not profitable growth.

Which of the following statements concerning the relationship between business and the environment is true? 1) Maintaining the finite supply of the world's natural resources is crucial to the long-term economic interests of corporations. 2) Business strategies that seek to manage and maintain the finite supply of the world's resources could be considered unethical. 3) Corporations use a negligible amount of the world's resources when conducting business. 4) Corporations' use of natural resources refers to the use of fossil fuels but not to other resources such as land and water.

1) Maintaining the finite supply of the world's natural resources is crucial to the long-term economic interests of corporations.

Which of the following statements are true of unrelated diversification? 1) Most management teams are not capable of effectively managing a diversified group of unrelated businesses. 2) A very small number of unanticipated problems or mistakes can have a major negative effect on corporate earnings. 3) The overwhelming majority of companies that undertake unrelated diversification succeed because of its distribution of risk. 4) Problems can occur when corporate management makes decisions for businesses they do not know well.

1) Most management teams are not capable of effectively managing a diversified group of unrelated businesses. 2) A very small number of unanticipated problems or mistakes can have a major negative effect on corporate earnings. 4) Problems can occur when corporate management makes decisions for businesses they do not know well.

Which of the following are policies that governments adopt to stimulate business investment? (Check all that apply.) 1) Providing government-sponsored job training 2) Offering low-cost business loans 3) Enacting environmental controls for production facilities 4) Increasing corporate taxes

1) Providing government-sponsored job training 2) Offering low-cost business loans

Which of the following statements are true of multibusiness diversification strategies? 1) Some multi-business enterprises are diversified into unrelated areas but have a group of related businesses within each area. 2) Combination-related-unrelated diversification strategies are attractive to companies with a mix of valuable competitive assets. 3) In dominant-business enterprises, no single business generates more than 25% of the overall revenues. 4) Some companies are narrowly diversified around two to five related or unrelated businesses.

1) Some multi-business enterprises are diversified into unrelated areas but have a group of related businesses within each area. 2) Combination-related-unrelated diversification strategies are attractive to companies with a mix of valuable competitive assets. 4) Some companies are narrowly diversified around two to five related or unrelated businesses.

Which of the following statements are true concerning the ranking of a diversified company's business units from best to worst? 1) The position of different businesses in the nine-cell matrix is a good criteria for identifying high-opportunity and low-opportunity businesses. 2) It is not necessary to take into account past performance of a business unit if the nine-cell matrix is used properly. 3) Future revenue and earnings for fast-growing industries usually look superior to those for slow-growing industries. 4) The rankings help high-level executives prioritize businesses for resource support and capital investment.

1) The position of different businesses in the nine-cell matrix is a good criteria for identifying high-opportunity and low-opportunity businesses. 3) Future revenue and earnings for fast-growing industries usually look superior to those for slow-growing industries. 4) The rankings help high-level executives prioritize businesses for resource support and capital investment.

Which of the following are drawbacks of acquisition? 1) There are often excessive premiums. 2) Integration of the company into the existing firm can be time consuming. 3) It can quickly establish supplier relationships. 4) There can be high integration costs.

1) There are often excessive premiums. 2) Integration of the company into the existing firm can be time consuming. 4) There can be high integration costs.

Internal development of a new business is a good idea when which of the following conditions are met? 1) There is plenty of time to start the business. 2) It is cheaper to enter internally than through an acquisition. 3) The parent company has the in-house resources needed to launch the company. 4) Incumbent firms are likely to respond quickly to a new entrant into the market.

1) There is plenty of time to start the business. 2) It is cheaper to enter internally than through an acquisition. 3) The parent company has the in-house resources needed to launch the company.

Which of the following statements are true of economies of scope? 1) They are available only to firms engaging in related diversification. 2) They are a distinct concept from economies of scale. 3) They result from strategic fit among related businesses, allowing the sharing of resources among diversified businesses. 4) They are cost savings that accrue directly from a larger-sized operation. 5) They are directly related to a business's size rather than to level of diversification.

1) They are available only to firms engaging in related diversification. 2) They are a distinct concept from economies of scale. 3) They result from strategic fit among related businesses, allowing the sharing of resources among diversified businesses.

Which of the following is true about joint ventures? 1) They are usually short-lived, ending as soon as the partners decide to part ways. 2) They are successful only if the companies involved are both domestic companies. 3) They are the most durable of the diversification options. 4) They tend to decrease conflict and disagreement within management.

1) They are usually short-lived, ending as soon as the partners decide to part ways.

Which of the following are true of related businesses? 1) They can be combined to perform better than the sum of the individual businesses. 2) They have similar resources and capabilities. 3) They have different resource requirements. 4) They have compatible value chain activities.

1) They can be combined to perform better than the sum of the individual businesses. 2) They have similar resources and capabilities. 4) They have compatible value chain activities.

In an unrelated diversification strategy, managers must make sure acquisition candidates have which of the following characteristics? 1) They meet corporate targets for profitability and return on investment. 2) They have a potential growth in profits equal to that of a mutual fund or holding company. 3) They are big enough to significantly contribute to the parent company's bottom line. 4) They are in an industry with attractive growth potential.

1) They meet corporate targets for profitability and return on investment. 3) They are big enough to significantly contribute to the parent company's bottom line. 4) They are in an industry with attractive growth potential.

Which of the following examples illustrate how socially responsible policies can save a company money in other areas? 1) a company investing in a program that helped employees quit smoking and saving millions in health care costs 2) a company offering insurance benefits to full-time and part-time employees and having lower rates of employee turnover 3) a company maximizing employee production through intense internal competition and creating a culture where workers could break rules to meet goals 4) a company delaying the recall of defective products and being forced to pay legal fees when a class-action suit was filed

1) a company investing in a program that helped employees quit smoking and saving millions in health care costs 2) a company offering insurance benefits to full-time and part-time employees and having lower rates of employee turnover

The means of entering a new business by buying an existing business is referred to as 1) acquisition. 2) internal startup. 3) joint venture. 4) bankruptcy.

1) acquisition.

Companies that practice cross-border coordination often gain which benefits? 1) adaptation to tariff and quota changes 2) cleaner working facilities 3) higher health care standards 4) better workload distribution 5) coordinated production schedules

1) adaptation to tariff and quota changes 4) better workload distribution 5) coordinated production schedules

A major drawback of ethical relativism is that 1) adoption of ethical relativism can be dangerous and might lead to the conclusion that if a country's culture is accepting of bribery, environmental degradation, and exposing workers to dangerous conditions, then so much the worse for honest people, environmental protection, and safe working conditions. 2) a one-size-fits-all set of ethical standards hinders personnel to do their work properly and effectively. 3) it is not possible to measure the compliance of company personnel to ethical relativism due to the different standards worldwide. 4) adoption of ethical relativism creates unnecessary rigidity that comes from having universal ethical standards for company personnel.

1) adoption of ethical relativism can be dangerous and might lead to the conclusion that if a country's culture is accepting of bribery, environmental degradation, and exposing workers to dangerous conditions, then so much the worse for honest people, environmental protection, and safe working conditions.

A company may find it easier to operate in one country than in others because of the country's 1) advantages for specific value chain activities. 2) unstable currency advantages for specific value chain activities. unstable currency exchange rates. 3) strong economic conditions. 4) favorable political conditions.

1) advantages for specific value chain activities. 3) strong economic conditions. 4) favorable political conditions.

Currency exchange rates can pose a risk for businesses because they 1) affect a company's profit. 2) drive the expropriation of assets. 3) can change by more than 20% a year. 4) vary unpredictability.

1) affect a company's profit. 3) can change by more than 20% a year. 4) vary unpredictability.

A good resource fit would include solid parenting capabilities in companies that pursue which of the following? 1) an unrelated diversification strategy 2) low employee turnover rate 3) high industry attractiveness 4) a related diversification strategy

1) an unrelated diversification strategy

Using domestic plants as a production base for exporting goods to selected foreign country 1) can be an excellent initial strategy to pursue international sales. 2) can be a powerful strategy because the company is not vulnerable to fluctuating exchange rates. 3) works well when exchange rate fluctuations prevent the adoption of a transnational strategy. 4) is usually a weak strategy when competitors are pursuing multi-domestic strategies. 5) can be a successful strategy when a company is focusing on vacant market niches in each market. markets

1) can be an excellent initial strategy to pursue international sales.

Which of the following have been cited as reasons why a company has a moral obligation to act in a manner that benefits all stakeholders? 1) civic-mindedness 2) the profit motive 3) the need to prioritize shareholder interests 4) ordinary decency

1) civic-mindedness 4) ordinary decency

Countries with which characteristics present advantages for becoming principal production sites? 1) close proximity to suppliers 2) lower labor costs 3) relaxed government regulations 4) strict quality controls

1) close proximity to suppliers 2) lower labor costs 3) relaxed government regulations

Related diversification strategies are strong when built upon sharing 1) competitively valuable resources. 2) generalized resources and capabilities. 3) human resource management capabilities. 4) resources that have a broad utility and application outside a diversified company's core industry. 5) general management capabilities.

1) competitively valuable resources.

Factors that can be used to quantify the competitive strengths of a diversified company's business subsidiaries include 1) costs relative to competitors' costs. 2) relative market share. 3) ability to match or beat rivals on key product attributes. 4) absolute industry market share.

1) costs relative to competitors' costs. 2) relative market share. 3) ability to match or beat rivals on key product attributes.

A company that employs a global strategy will do which of the following? 1) create a strong headquarters to oversee its global activities 2) build a global brand 3) coordinate efforts across country boundaries 4) produce a variety of product versions for each new market 5) sell a standardized global product

1) create a strong headquarters to oversee its global activities 2) build a global brand 3) coordinate efforts across country boundaries 5) sell a standardized global product

Cultural pressure at a company to hit goals at all costs 1) creates an environment in which workers have license to pursue any profitable strategy they can get away with. 2) can cause even honorable employees to behave unethically. 3) paves the way for managers to keep the company focused on ethical long-term goals. 4) virtually ensures that unethical employees will minimize the importance of observing ethical standards.

1) creates an environment in which workers have license to pursue any profitable strategy they can get away with. 2) can cause even honorable employees to behave unethically. 4) virtually ensures that unethical employees will minimize the importance of observing ethical standards.

In order to pass the three tests of corporate advantage, executives must 1) diversify into industries where the businesses can produce consistently good earnings and return on investment. 2) negotiate favorable acquisition prices. 3) acquire a growing number of companies in successive years. 4) do a superior job of corporate parenting via high-level managerial oversight.

1) diversify into industries where the businesses can produce consistently good earnings and return on investment. 2) negotiate favorable acquisition prices. 4) do a superior job of corporate parenting via high-level managerial oversight

The term "triple bottom line" refers to which of the following performance metrics? 1) economic 2) conversion 3) social 4) environmental

1) economic 3) social 4) environmental

When ethical principles are deeply ingrained in a company's culture, 1) employees tend to abide by the company's business principles and values. 2) companies are often forced to spend money to repair their reputations. 3) employees tend to break rules to achieve short-term goals. 4) companies tend to risk scandals similar to the one Enron experienced.

1) employees tend to abide by the company's business principles and values.

Companies with a reputation for social responsibility and sustainable business practices 1) enhance their ability to retain employees. 2) are likely to have difficulty attracting talented employees. 3) often have issues concerning low morale in their workforce. 4) generally have lower costs for staff training and recruitment.

1) enhance their ability to retain employees. 4) generally have lower costs for staff training and recruitment.

A company that is committed to environmental sustainability strategies can enhance revenues by 1) finding ways to sell rather than dispose of the byproducts of manufacturing. 2) allocating extra funds to advertising campaigns that market the company's most recognizable products. 3) outsourcing key business activities to manufacturers that face minimal government regulation. 4) adding energy-saving products to its line of core products.

1) finding ways to sell rather than dispose of the byproducts of manufacturing. 4) adding energy-saving products to its line of core products.

A think-local, act-local strategy gives local managers the decision-making capability to do which of the following? 1) focus competitive efforts 2) react to rivals' moves only in consultation with the home office 3) address market needs 4) disregard potential new opportunities

1) focus competitive efforts 3) address market needs

McDonald's, 7-Eleven, and Hilton Hotels have all entered the international market by using Multiple choice question. 1) franchising strategies. 2) export strategies. 3) joint-venture strategies. 4) licensing strategies.

1) franchising strategies.

In the business world, the term "sustainability" 1) has been used interchangeably with the term "corporate social responsibility." 2) refers to the race among corporations to use their share of the world's resources before those resources are depleted. 3) is used to refer to the relationship of a company to its environment and its use of natural resources. 4) refers to the fact that the world's resources are infinitely renewable and self-sustaining.

1) has been used interchangeably with the term "corporate social responsibility." 3) is used to refer to the relationship of a company to its environment and its use of natural resources.

Cross-business strategic fit can exist 1) in supply chain activities. 2) at only one point along the value chain. 3) in customer service activities. 4) at various points along the value chain.

1) in supply chain activities. 3) in customer service activities. 4) at various points along the value chain.

A diversified company can add value by shifting capital from business units generating free cash flow to those needing capital to grow by having a strong 1) internal capital market. 2) external capital market. 3) industry attractiveness score. 4) competitive strength score.

1) internal capital market.

Which of the following are terms that refer to diversification by starting a new business subsidiary from scratch? 1) internal development 2) new venture development 3) acquisition premium 4) corporate venturing

1) internal development 2) new venture development 4) corporate venturing

The biggest risk a company assumes with a licensing strategy is that Multiple choice question. 1) it will lose control over the use of its technological know-how. 2) the licensing will incur high fees. 3) it will enter into disputes over royalties. 4) the foreign country will impose tariffs on imports.

1) it will lose control over the use of its technological know-how.

The effect of ethical standards on a company's strategy does not 1) lead to lower employee morale and higher employee cynicism. 2) define what is unethical in whole or in part as morally wrong. 3) always reflect badly on the character of the company personnel involved. 4) automatically result in damage to a company's reputation and produce costly consequences. 5) constitute good business and pursue the best interest of shareholders.

1) lead to lower employee morale and higher employee cynicism.

What are among the five primary strategic options for a company wishing to enter international markets? 1) licensing foreign firms to produce and distribute the company's products abroad 2) relying on joint ventures with foreign companies 3) asking a foreign competitor to set up and operate its own franchising operation 4) establishing a subsidiary in a foreign market

1) licensing foreign firms to produce and distribute the company's products abroad 2) relying on joint ventures with foreign companies 4) establishing a subsidiary in a foreign market

Focusing on a limited number of locations can increase a company's competitive advantage when 1) manufacturing costs are lower in a certain area. 2) employees are eager to prove themselves. 3) the company is on the verge of bankruptcy. 4) efficiency is not a concern. 5) a large learning curve is associated with a particular task.

1) manufacturing costs are lower in a certain area. 5) a large learning curve is associated with a particular task.

What is the term used to describe rivals competing against one another in many of the same markets? 1) multimarket competition 2) mutual restraint 3) multidomestic strategy 4) laissez-faire economics

1) multimarket competition

Ethical business managers 1) provide an example to other employees by consciously living by the company's business principles. 2) understand that there is a difference between simply having a code of ethics and seeing that the company follows it. 3) abide by the company's code of ethics in nearly all circumstances but are willing to make exceptions in times of financial crisis. 4) place the highest value on employees who bring in the most revenue by whatever means.

1) provide an example to other employees by consciously living by the company's business principles. 2) understand that there is a difference between simply having a code of ethics and seeing that the company follows it.

A company that distributes its activities across multiple locations can seek which advantages? 1) providing customers with timely service and technical support 2) reducing the risks of fluctuating exchange rates 3) lowering distribution costs 4) reducing the cost of training employees 5) limiting its customer base to better serve clients

1) providing customers with timely service and technical support 2) reducing the risks of fluctuating exchange rates 3) lowering distribution costs

Which of the following actions can be effective ways to stop companies that practice socially irresponsible behaviors? 1) publicizing the bad behavior of companies 2) reducing regulation of the companies' practices 3) enacting legislation that makes the activity illegal 4) boycotting the companies' products and services

1) publicizing the bad behavior of companies 3) enacting legislation that makes the activity illegal 4) boycotting the companies' products and services

Sharing resources with its international operations allows a company to 1) reduce the cost of creating them at each location. 2) freely share operational strategies with competitors. 3) ignore changes in local-market conditions. 4) spread the development costs over a larger volume of unit sales.

1) reduce the cost of creating them at each location. 4) spread the development costs over a larger volume of unit sales.

For domestic manufacturers, positive aspects of a weak domestic currency include 1) reduced domestic demand for foreign-made goods. 2) increased foreign-made imports. 3) a lack of foreign-buyer demand. 4) lower prices for domestic products. 5) fewer export opportunities.

1) reduced domestic demand for foreign-made goods. 4) lower prices for domestic products.

A weak domestic currency can result in a favorable exchange rate shift for domestic companies by 1) reducing the cost advantage for foreign companies. 2) increasing the tariffs on foreign goods. 3) reducing the availability of domestic jobs. 4) increasing foreign competition.

1) reducing the cost advantage for foreign companies.

Differences in which of the following cause variations in ethical standards across cultures? 1) religious beliefs 2) social customs 3) standards of intelligence 4) core values

1) religious beliefs 2) social customs 4) core values

Examples of opportunities for strategic fit include 1) sharing costs between businesses by combining their related value chain activities into a single operation. 2) ensuring that a business's resources remain the sole property of that business throughout the diversification process. 3) exploiting the common use of a well-known brand name. 4) transferring specialized expertise from the value chain of one business to another.

1) sharing costs between businesses by combining their related value chain activities into a single operation. 3) exploiting the common use of a well-known brand name. 4) transferring specialized expertise from the value chain of one business to another.

Corporate social responsibility programs commonly include actions that 1) sustain the environment. 2) provide earning incentives. 3) enhance employee well-being. 4) promote diversity in the workforce.

1) sustain the environment. 3) enhance employee well-being. 4) promote diversity in the workforce.

Business ethics can be defined as 1) the application of ethical principles and standards to the actions and decisions of business organizations and the conduct of their personnel. 2) rules that each company makes about "what is right" and "what is wrong" for top management and the board of directors. 3) special standards that are only applicable in business situations. 4) principles that are popular in conducting business, but not when crafting and executing a strategy. 5) the application of general ethical principles and standards to the various stakeholders of businesses.

1) the application of ethical principles and standards to the actions and decisions of business organizations and the conduct of their personnel.

Which of the following is an intangible or invisible cost that companies incur when ethical wrongdoing is disclosed? 1) the costs of complying with often harsher government regulations 2) the costs of taking corrective actions 3) legal and investigative costs incurred by the company 4) administrative costs associated with ensuring future compliance 5) the costs of providing remedial education and ethics training to company personnel

1) the costs of complying with often harsher government regulations

It makes sense to stick closely with a diversified company's present business lineup when 1) the existing business lineup provides ample opportunity for growth. 2) there are rapidly changing conditions and technological innovations in the company's core business. 3) the current lineup reliably creates economic value for shareholders. 4) the company's existing businesses match the company's diversification strategy.

1) the existing business lineup provides ample opportunity for growth. 3) the current lineup reliably creates economic value for shareholders. 4) the company's existing businesses match the company's diversification strategy.

Examining which of the following are ways to determine whether a company is actually guided by its official code of ethics? 1) the extent to which daily operations follow the code of ethics 2) the increase in company profits from year to year 3) whether the company adheres to the code of ethics when crafting strategy 4) whether the company has registered with the Securities and Exchange Commission

1) the extent to which daily operations follow the code of ethics 3) whether the company adheres to the code of ethics when crafting strategy

Which factors make dispersing a company's activities competitively important? 1) the threat of supply interruptions 2) low transportation costs for raw materials and product distribution 3) trade barriers to importing manufactured goods 4) major customers in areas without low-cost production

1) the threat of supply interruptions 3) trade barriers to importing manufactured goods 4) major customers in areas without low-cost production

In a world of ethical relativism, 1) there are few absolutes for judging the conduct of a company in various markets. 2) no moral or ethical standards can be applied to business conduct. 3) the rules governing ethical behavior are arbitrary and change at a moment's notice. 4) there is a set of strict codes used to judge a company's conduct no matter where the market is.

1) there are few absolutes for judging the conduct of a company in various markets.

A transnational strategy is a ______ approach. 1) think-global, act-local 2) think-local, act-local 3) think-global, act-global 4) think-blue, act-green

1) think-global, act-local

Another way to define the concept of multidomestic strategy is as a 1) think-local, act-local approach. 2) think-long-term, act-global approach. 3) think-environmental, act-local approach. 4) think-local, act-global approach.

1) think-local, act-local approach.

What are reasons a company would share a valuable competitive asset with its international locations? 1) to attract customers 2) to increase its global market share 3) to pay its employees less than competitors pay their workers 4) to duplicate important technical know-how for safekeeping

1) to attract customers 2) to increase its global market share

According to the concept of ethical universalism, fundamental concepts of right and wrong 1) transcend culture, society, and religion. 2) vary among cultures and religions. 3) change over time. 4) depend on whether cultures are on friendly terms.

1) transcend culture, society, and religion.

Ethical business managers 1) understand that there is a difference between simply having a code of ethics and seeing that the company follows it. 2) abide by the company's code of ethics in nearly all circumstances but are willing to make exceptions in times of financial crisis. 3) place the highest value on employees who bring in the most revenue by whatever means. 4) provide an example to other employees by consciously living by the company's business principles.

1) understand that there is a difference between simply having a code of ethics and seeing that the company follows it. 4) provide an example to other employees by consciously living by the company's business principles.

Entering a new business via a joint venture can be useful in which of the following situations? 1) when an opportunity in a new industry requires more know-how than one company has alone 2) when an opportunity is too complicated or risky for one company to attempt alone 3) when both companies have different visions for product development 4) when diversification entails operations in a foreign country

1) when an opportunity in a new industry requires more know-how than one company has alone 2) when an opportunity is too complicated or risky for one company to attempt alone 4) when diversification entails operations in a foreign country

Business managers who are not deeply committed to ethical principles may nevertheless act ethically because they 1) wish to avoid scandal and disciplinary action. 2) are in the habit of doing the right thing for the right reason. 3) recognize the risks associated with unethical strategies. 4) hope to prevent their staff from thinking negatively of them.

1) wish to avoid scandal and disciplinary action. 3) recognize the risks associated with unethical strategies. 4) hope to prevent their staff from thinking negatively of them.

Which of the following would be examples of sustainable business practices? 1) A corporation introduces changes to its products that require increased usage of resources in order to manufacture them. 2) A corporation enters into business relationships only with suppliers that have taken steps to minimize their carbon footprint. 3) A corporation resists a shift to technologies that would reduce emissions because the implementation costs are too high. 4) A corporation conducts a study in order to choose a production site where manufacturing will have the least impact on the environment.

2) A corporation enters into business relationships only with suppliers that have taken steps to minimize their carbon footprint. 4) A corporation conducts a study in order to choose a production site where manufacturing will have the least impact on the environment.

To be successful, a think-global, act-global approach generally requires which of the following? 1) A strong emphasis on customized product offerings 2) A global brand name 3) A willingness to work with rivals 4) Centralized production and distribution

2) A global brand name 4) Centralized production and distribution

Which of the following would be an example of a company shifting the environmental cost of its business onto society? 1) A restaurant chain mandates that all cleaning products used in its restaurants be biodegradable. 2) A manufacturer disposes of waste in public waters that must be treated and cleaned with tax revenues. 3) A small local store refuses to sell products of manufacturers with a track record of exploiting labor in overseas markets. 4) A food wholesaler screens all processed food items for ingredients the wholesaler has identified as unhealthy.

2) A manufacturer disposes of waste in public waters that must be treated and cleaned with tax revenues.

If your company's product is dry soup mixes and canned soups, would a multidomestic strategy, a transnational strategy, or a global strategy seem to be more advisable? 1) multidomestic strategy since customer needs and preferences vary greatly in the soup industry 2) A transnational approach is appropriate. Country-to-country customization to accommodate differences in taste preferences is necessary. 3) transnational strategy since processed food companies compete in two or more countries simultaneously 4) multidomestic as local market conditions preclude a uniform, coordinated worldwide strategic approach 5) global strategy since local managers need little latitude in decision-makingBottom of Form

2) A transnational approach is appropriate. Country-to-country customization to accommodate differences in taste preferences is necessary.

Which statement points out the main difference between the global and the transnational strategy? 1) A global strategy involves selling under a single brand name worldwide, whereas a transnational strategy focuses on utilizing multiple brands. 2) A transnational strategy gives local managers more room to make strategy changes to better satisfy local buyers and to better match local market conditions. 3) A global strategy must cope with high production and distribution costs due to greater variety, whereas a transnational strategy can create large economies. 4) A global strategy involves selling a standardized product worldwide, whereas a transnational strategy entails selling products that are highly differentiated from country to country. 5) A "think-global, act-global" approach entails extensive strategy coordination across countries, while a "think-global, act-local" approach entails little or no strategy coordination across countries.

2) A transnational strategy gives local managers more room to make strategy changes to better satisfy local buyers and to better match local market conditions.

What is the benefit of calculating quantitative attractiveness ratings for the industries a diversified company? 1) Attractiveness ratings identify which industry has the best/worst value chain matchups from the standpoint of cost reduction potential. 2) Calculating attractiveness ratings is a systematic and reasonably reliable method for ranking a diversified company's industries, i.e. from most attractive to least attractive. 3) Attractiveness ratings help to identify competitively valuable resources and capabilities. 4) Attractiveness ratings help to identify the ability to match or beat rivals on key product attributes. 5) Attractiveness ratings help to identify the opportunities to exercise bargaining leverage with key suppliers or customers and help identify which industry is likely to be the largest/smallest contributor to the company's growth and profitability.

2) Calculating attractiveness ratings is a systematic and reasonably reliable method for ranking a diversified company's industries, i.e. from most attractive to least attractive.

Steps involved in assessing the positive and negative aspects of a diversified company's strategy and determining how to improve performance include which of the following? 1) Eliminating the previous management team and selecting leaders with strengths in specialized areas. 2) Determining the competitive strength of the company's business units. 3) Evaluating the individual and group attractiveness of the industries the company has diversified into. 4) Determining if the firm's resources fit the requirements of its current business lineup.

2) Determining the competitive strength of the company's business units. 3) Evaluating the individual and group attractiveness of the industries the company has diversified into. 4) Determining if the firm's resources fit the requirements of its current business lineup.

Which of the following statements accurately reflect how ethical standards vary among different cultures? 1) Managers in Muslim countries, in contrast to European managers, tend to derive business ethics from secular standards instead of religious values. 2) European managers, in contrast to Chinese managers, tend to emphasize business standards that protect workers' freedom of political opinion. 3) Chinese managers, in contrast to American and European managers, are likely to establish ethical standards that protect human rights. 4) Japanese managers, in contrast to managers in other countries, are likely to highly value showing respect for the collective good of society.

2) European managers, in contrast to Chinese managers, tend to emphasize business standards that protect workers' freedom of political opinion. 4) Japanese managers, in contrast to managers in other countries, are likely to highly value showing respect for the collective good of society.

Which of the following statements about official codes of ethical conduct is most accurate? 1) The Sarbanes-Oxley Act has established a test that determines whether an official code of ethics is cosmetic. 2) In the United States, publicly traded companies must have an official code of ethics or explain why they do not have one. 3) The Securities and Exchange Commission requires companies based overseas to have an official code of ethics. 4) Having a mandated code of ethics ensures that a company will abide by ethical standards.

2) In the United States, publicly traded companies must have an official code of ethics or explain why they do not have one.

Which of the following are true of the nine-cell attractiveness-strength matrix? 1) It accurately calculates the probability of a business failing within the next five years. 2) It identifies the business strength of businesses. 3) It identifies the industry attractiveness of businesses. 4) It helps craft new strategic moves to improve overall corporate performance. 5) It helps diversified companies allocate resources among their businesses.

2) It identifies the business strength of businesses. 3) It identifies the industry attractiveness of businesses. 5) It helps diversified companies allocate resources among their businesses.

Why is acquisition considered to be an attractive approach for companies seeking diversification into another industry? 1) Due diligence and integration can be done easily and at low cost. 2) It is quicker than trying to launch a brand-new operation, offers an effective way to hurdle entry barriers, and allows the acquirer to move directly to the task of building a strong position in the target industry. 3) It satisfies all three diversity tests (industry attractiveness test, cost-of-entry-test, better-off test) to grow shareholder value over the long term. 4) It is not time-consuming and allows the firm to realize great profits in the end. 5) It is less expensive, less risky, and more effective than launching a new startup operation.

2) It is quicker than trying to launch a brand-new operation, offers an effective way to hurdle entry barriers, and allows the acquirer to move directly to the task of building a strong position in the target industry.

Which of the following are the benefits of acquisition? 1) It creates a longer period of time to develop an adequate scale of operation. 2) It is quicker than trying to launch a new operation. 3) It is a useful way to get over entry barriers, such as building brand awareness. 4) It allows access to hard-to-find resources and capabilities that work well with those of the acquiring company.

2) It is quicker than trying to launch a new operation. 3) It is a useful way to get over entry barriers, such as building brand awareness. 4) It allows access to hard-to-find resources and capabilities that work well with those of the acquiring company.

Which of the following statements are true about a successful diversification effort? 1) It must provide more value than real estate investments. 2) It must give shareholders value that they cannot get by purchasing different stocks on their own. 3) It must add long-term economic value for shareholders. 4) It must focus purely on spreading the risk.

2) It must give shareholders value that they cannot get by purchasing different stocks on their own. 3) It must add long-term economic value for shareholders.

Although many people would agree that child labor is lamentable, others have noted that which of the following are true? 1) Child labor is an important way of teaching children the values of hard work and determination. 2) Labor opportunities for children are preferable to a life of begging, drug trafficking, or prostitution. 3) Many poor families throughout the world require financial contributions from their children in order to survive. 4) Child labor in many industrialized countries is essential for maintaining their GDP.

2) Labor opportunities for children are preferable to a life of begging, drug trafficking, or prostitution. 3) Many poor families throughout the world require financial contributions from their children in order to survive.

Which of the following statements is true concerning the thinking that the "business of business is business, not ethics"? 1) That type of thinking guides companies that consistently take measures to ensure that their policies are in line with their code of ethics. 2) That type of thinking has been apparent in a number business scandals covered in the media. 3) That type of thinking is dangerous because it increases the likelihood that a company will adopt unethical strategies. 4) That type of thinking has been an effective way for companies to avoid disciplinary action and public embarrassment.

2) That type of thinking has been apparent in a number business scandals covered in the media. 3) That type of thinking is dangerous because it increases the likelihood that a company will adopt unethical strategies.

Which of the following is true concerning relative market share? 1) It is a ratio of a business unit's market share to the market share held by the rest of the industry. 2) The further below 1 a business unit's relative market share is, the weaker its competitive strength and market position with its rivals. 3) Business units cannot have a relative market share greater than 1. 4) The further below 1 a business unit's relative market share is, the stronger its competitive strength

2) The further below 1 a business unit's relative market share is, the weaker its competitive strength and market position with its rivals.

Some people have argued that there is an implied social contract between a business and the members of society, according to which of the following? 1) The members of society agree to purchase the products and services that the business brings to market. 2) The members of society agree not to unreasonably restrain a business's pursuit of fair profit. 3) A business is obligated to make charitable donations to community foundations. 4) A business has a moral responsibility to promote the general welfare and avoid doing harm.

2) The members of society agree not to unreasonably restrain a business's pursuit of fair profit. 4) A business has a moral responsibility to promote the general welfare and avoid doing harm.

What is not associated with the triple bottom line? 1) The three dimensions of performance are often referred to in terms of the "three pillars" of people, planet, and profit. 2) The term planet refers to the company's overriding legal obligation to incorporate protection of the environment into its mission. 3) The triple bottom line refers to three types of performance metrics: economic, social, environmental. 4) The term profit not only encompasses the profit earned for its shareholders but also the economic impact that the company has on society. 5) The term people refers to various social initiatives such as charitable contributions, serving endeavors, and engaging in broader philanthropic initiatives.

2) The term planet refers to the company's overriding legal obligation to incorporate protection of the environment into its mission.

Which of the following actions should a company consider according to the nine-cell attractiveness-strength matrix? 1) To withdraw capital resources from companies that are not evenly matched in industry attractiveness and business strength 2) To remove resources from ventures that are low in attractiveness and strength unless they offer superior profit or cash flow opportunity 3) To be cautious about investing in companies located intermediately on the grid 4) To concentrate resources in businesses that possess higher degrees of attractiveness and competitive strength

2) To remove resources from ventures that are low in attractiveness and strength unless they offer superior profit or cash flow opportunity 3) To be cautious about investing in companies located intermediately on the grid 4) To concentrate resources in businesses that possess higher degrees of attractiveness and competitive strength

Which of the following are actions a company should take according to integrative social contracts theory? 1) Sign official documents that publicly outline the company's ethical standards. 2) Uphold a small number of universal ethical principles that are applicable in all situations. 3) Adhere to local values and customs that define the boundaries of ethical behavior. 4) Take a middle position when considering questions regarding the breach of ethical standards.

2) Uphold a small number of universal ethical principles that are applicable in all situations. 3) Adhere to local values and customs that define the boundaries of ethical behavior.

Producing goods in domestic plants and exporting them is considered 1) the most difficult way to enter a foreign market. 2) a conservative way to enter a foreign market. 3) a risky way to enter a foreign market. 4) the most profitable way to enter a foreign market.

2) a conservative way to enter a foreign market.

The environmental sustainability strategies of Ford and Green Mountain Coffee Roasters have shown that 1) few customers are willing to pay added costs that may be associated with a company's environmental sustainability strategies. 2) a significant number of consumers will buy a company's products in part to encourage environmentally sustainable business practices. 3) environmental sustainability strategies can do irreparable damage to a company's brand. 4) it is not possible for a company to create products that provide social benefits and fulfill customer needs satisfactorily.

2) a significant number of consumers will buy a company's products in part to encourage environmentally sustainable business practices.

Strategic fit 1) prevents one company from usurping the resources of another. 2) allows cross-business sharing of resources that enable value chain activities. 3) refers to a diversification strategy used with unrelated businesses. 4) ensures that each company's resources are only fitted to suit its value chain activities.

2) allows cross-business sharing of resources that enable value chain activities.

The decision to diversify should begin with 1) demand from dissatisfied shareholders. 2) an economic justification. 3) a moral justification. 4) a desire to expand creativity and expression.

2) an economic justification.

Sustainable business practices can be defined as those practices that 1) prioritize the short-term business targets over long-term goals. 2) are capable of meeting the needs of the present without compromising the needs of the future. 3) threaten the triple bottom line of a company and lower its ranking in the Dow Jones Sustainability World Index. 4) protect the planet in the long term but jeopardize the short-term viability of a corporation.

2) are capable of meeting the needs of the present without compromising the needs of the future.

In some cultures, the practices of bribing customs officials and paying kickbacks to customers have been justified on the grounds that they 1) are essential for a country's GDP. 2) are similar to tipping a server in a restaurant. 3) help to grow important sectors of the economy. 4) help to fight poverty by funding education.

2) are similar to tipping a server in a restaurant.

What are elements of factor conditions for production? 1) consumer demand 2) availability of raw materials 3) market size 4) cost of labor

2) availability of raw materials 4) cost of labor

A sound justification for unrelated diversification is 1) based on the premise that this strategy can result in risk reduction by spreading a company's investments over a set of diverse industries. 2) based on the premise that this strategy could resuscitate struggling companies whose operations can be turned around with the aid of the parent company's financial resources and managerial know-how. 3) based on the premise that this strategy can support managerial motives including prospects for higher compensation. 4) based on the premise that this strategy will help to stabilize earnings, i.e. offsetting market downtrends in some of the company's businesses by cyclical upswings in its other businesses. 5) based on the premise that this strategy can help meet or exceed the company's expectations for rapid or continuous growth.

2) based on the premise that this strategy could resuscitate struggling companies whose operations can be turned around with the aid of the parent company's financial resources and managerial know-how.

The multidomestic strategy of "think local, act local" 1)facilitates the transfer of a company's capabilities, knowledge, and other resources across country bord ers. 2) becomes more appealing when country-to-country differences in buyer tastes, cultural traditions, and market conditions vary significantly. 3) avoids host country ownership requirements and import quotas. 4) is most appropriate when the need for local responsiveness is low. 5) is conducive to building a single worldwide competitive advantage.

2) becomes more appealing when country-to-country differences in buyer tastes, cultural traditions, and market conditions vary significantly.

Which of the following are strategic options for increasing a corporation's overall success? 1) avoiding any restructuring that might put a new face on the company's business lineup 2) broadening the scope of diversification by entering additional industries 3) sticking closely with the existing business lineup and pursuing opportunities presented by these businesses 4) retrenching to a narrower scope of diversification by divesting poorly performing businesses

2) broadening the scope of diversification by entering additional industries 3) sticking closely with the existing business lineup and pursuing opportunities presented by these businesses 4) retrenching to a narrower scope of diversification by divesting poorly performing businesses

Acquiring a foreign company as a means of entering a foreign market can allow a business to do which of the following? 1) create a joint venture from the ground up 2) build supplier relationships 3) gain access to local distribution channels 4) avoid the risks of a greenfield venture

2) build supplier relationships 3) gain access to local distribution channels 4) avoid the risks of a greenfield venture

Companies whose success depends on sustaining high morale are most likely to pursue CSR strategies that 1) focus on the company's relationship with suppliers and other business partners. 2) create a culture in the workplace that inspires dedication. 3) demonstrate the company's commitment to improving the welfare of the local community. 4) emphasize their commitment to environmentally sustainable business practices.

2) create a culture in the workplace that inspires dedication.

A greenfield venture strategy involves 1) 1sing a domestic plant as its production base. 2) creating a subsidiary business by setting up all aspects of the operation from the ground up. 3) avoiding the risk of committing resources to enter foreign markets. 4) building a presence in a foreign market by allocating limited resources, thus hedging the economic risk. 5) exporting into a foreign market by marketing indirectly thru local forward channel allies.

2) creating a subsidiary business by setting up all aspects of the operation from the ground up.

The broad categories of action for crafting strategic moves to improve a diversified company's overall performance include 1) building cash reserves and investing in short-term securities. 2) divesting certain businesses and retrenching to a narrower base of business operations. 3) sticking closely with the existing business lineup and pursuing opportunities that those businesses present. 4) widening the company's business scope by making new acquisitions in new industries.

2) divesting certain businesses and retrenching to a narrower base of business operations. 3) sticking closely with the existing business lineup and pursuing opportunities that those businesses present. 4) widening the company's business scope by making new acquisitions in new industries.

Assessing the competitive advantage potential of cross-business strategic fit involves 1) considering what competitive value can be generated from strategic fit. 2) evaluating how much benefit a diversified company can gain from cross-business value chain matchups and resource sharing. 3) evaluating a diversified company's profitability relative to competitors. 4) determining if there are opportunities to exploit outsourcing opportunities by a diversified company's lineup of businesses. 5) examining a company's costs relative to the costs of its chief rivals in the industry.

2) evaluating how much benefit a diversified company can gain from cross-business value chain matchups and resource sharing.

In some countries it is common to pay bribes to government officials in order to accomplish which of the following? 1) get service in a restaurant 2) facilitate an administrative ruling 3) win a government contract 4) obtain a license or permit

2) facilitate an administrative ruling 3) win a government contract 4) obtain a license or permit

Which the following practices increase the likelihood that a company will pursue unethical business strategies? 1) creating a culture that prioritizes ethical behavior above profitability 2) faulty oversight of daily business practices 3) putting pressure on company managers to meet short-term targets 4) adjusting short-term goals when necessary to adapt to changes in the business climate

2) faulty oversight of daily business practices 3) putting pressure on company managers to meet short-term targets

Short-termism can be defined as the tendency for managers to 1) hold a job with a company for a short time before pursuing other career options. 2) focus excessive attention on near-term performance objectives. 3) create widespread insecurity at a company by firing employees after only a short time on the job. 4) fail to see the benefits of consistently hitting short-term financial targets.

2) focus excessive attention on near-term performance objectives.

What are examples of demand conditions? 1) shifts in currency exchange rates 2) growth potential 3) competitive strengths 4) relative size of the market 5) domestic buyers' needs and wants

2) growth potential 4) relative size of the market 5) domestic buyers' needs and wants

Adherents of the concept of ethical relativism believe that 1) for businesses to succeed there can be no cross-country or cross-cultural variation in ethical standards. 2) holding a common template for judging the ethics of business actions everywhere is ethically problematic. 3) businesses operating in dominant cultures have the power to set the ethical standards for businesses operating in weaker cultures. 4) given actions are ethically right or wrong depending on the ethical norms of the country in which they take place.

2) holding a common template for judging the ethics of business actions everywhere is ethically problematic. 4) given actions are ethically right or wrong depending on the ethical norms of the country in which they take place.

When Wells Fargo employees fraudulently opened customer accounts in order to meet extremely high sales quotas, rehabilitating this bank's shattered reputation was expected to be time-consuming and costly because 1) its employees' actions could result in the increased costs of servicing the bank's customers. 2) its employees' actions could lead to unnerved creditors and increased risk of default on loans due to potential business fallout. 3) its employees' actions could result in poaching talented employees from rival banks. 4) its employees' actions could result in increased corporate taxes on the bank's profits. 5) its employees' actions could result in higher stock prices and higher returns on invested capital.

2) its employees' actions could lead to unnerved creditors and increased risk of default on loans due to potential business fallout.

Which set of standards takes precedence in integrative social contracts theory? 1) whatever the managers of the company decide 2) local ethical standards 3) universal ethical norms 4) whatever is prescribed in the "moral-free space" of the contract

2) local ethical standards

The main disadvantage of using a franchising strategy to pursue opportunities in foreign markets is 1) giving up autonomy and profit. 2) maintaining quality control. 3) bearing costs and risks of foreign establishments. 4) diverting company resources from the daily business. 5) paying taxes and tariffs in order to be able to enter.

2) maintaining quality control.

Businesses have a moral obligation to act in a socially responsible manner because 1) the interests of shareholders depend upon the well-being of society. 2) ordinary decency, civic-mindedness, and contributions to the well-being of society should be expected of any business. 3) such actions can lead to increased buyer patronage. 4) such an obligation reduces the need to oversee ethical lapses. 5) society at large influences the strategy and most long-term goals of a company.

2) ordinary decency, civic-mindedness, and contributions to the well-being of society should be expected of any business.

The steps involved in creating a diversified company's corporate strategy include 1) requiring corporate executives to become involved in all details of business-level strategies. 2) picking new industries to enter and the means for entering them. 3) establishing investment priorities. 4) leveraging cross-business value chain relationships into competitive advantage.

2) picking new industries to enter and the means for entering them. 3) establishing investment priorities. 4) leveraging cross-business value chain relationships into competitive advantage.

Warby Parker's running an entirely carbon neutral operation is an example of which triple bottom line performance metric? 1) social 2) planet 3) people 4) natural 5) profit

2) planet

Which of the following would be misguided reasons for pursuing unrelated diversification? 1) building shareholder value 2) reducing earnings volatility 3) boosting managerial compensation 4) risk reduction

2) reducing earnings volatility 3) boosting managerial compensation 4) risk reduction

Unrelated diversification strategies 1) are fairly safe ways to diversify from a management point of view. 2) tend to have more overall failures than successes. 3) are highly suited for handling unforeseen problems and strategic mistakes. 4) tend to have more overall successes than failures.

2) tend to have more overall failures than successes.

Unrelated diversification strategies 1) are fairly safe ways to diversify from a management point of view. 2) tend to have more overall failures than successes. 3) tend to have more overall successes than failures. 4) are highly suited for handling unforeseen problems and strategic mistakes.

2) tend to have more overall failures than successes.

A company has good financial resource fit if 1) the excess cash flow of its cash hog businesses is sufficient to fund its cash cow businesses. 2) the company can adequately fund all its businesses while keeping a good credit rating. 3) the company can create enough internal cash flow to provide the capital required by its businesses. 4) each individual business sufficiently contributes to meeting companywide performance targets.

2) the company can adequately fund all its businesses while keeping a good credit rating. 3) the company can create enough internal cash flow to provide the capital required by its businesses. 4) each individual business sufficiently contributes to meeting companywide performance targets.

Which two issues do companies commonly encounter when undergoing international expansion? 1) the difficulty of finding and training competent employees 2) the cost-effectiveness of providing a standardized product globally 3) the possibility of an economic recession 4) the demand to customize products to suit local preferences

2) the cost-effectiveness of providing a standardized product globally 4) the demand to customize products to suit local preferences

The global strategy that emphasizes a "think-global, act-global" strategic theme focuses on 1) utilizing the different competitive capabilities, distribution channels, and marketing approaches available in a company's international markets. 2) the same basic competitive approach (low-cost, differentiation, best-cost, focused) in all countries where the firm does business. 3) incorporating elements of both multidomestic and transnational strategies. 4) varying its product offering and competitive approach from country to country.

2) the same basic competitive approach (low-cost, differentiation, best-cost, focused) in all countries where the firm does business.

Short-termism at a company can do which of the following? 1) improve competitiveness by providing steps toward larger company goals 2) undermine activities that promote long-term success 3) shore up resources that create value for shareholders 4) weaken the company's brand

2) undermine activities that promote long-term success 4) weaken the company's brand

Imagine that you are the CEO of a multinational corporate consumer food company. What would make it attractive to you to consider related diversification via acquisition, rather than unrelated diversification into a new industry, such by forming an internal startup subsidiary to enter and compete in the target industry? 1) when internal entry for your company is cheaper than entry via acquisition 2) when the incumbent industry enables your company to create strategic fits with the acquired firm to exploit cross-business value chain activities and resource similarities that could lead to more efficient production, distribution, and sale of profitable processed food products 3) when rival incumbent consumer food companies are likely to be slow or ineffective in combating a new entrant's efforts to crack the market 4) when your company possesses the skills and resources to overcome entry barriers and there is ample time to launch the business and compete effectively 5) when adding new production capacity will not adversely impact the supply demand balance in the industry by creating oversupply conditions

2) when the incumbent industry enables your company to create strategic fits with the acquired firm to exploit cross-business value chain activities and resource similarities that could lead to more efficient production, distribution, and sale of profitable processed food products

Ethical strategies are good business because they are likely to 1) help the company meet short-term goals. 2) win the approval of suppliers, employees, and investors. 3) sustain the reputation of the company. 4) increase the internal costs of damage control.

2) win the approval of suppliers, employees, and investors. 3) sustain the reputation of the company.

If your company's product is large home appliances such as washing machines, ranges, ovens, and refrigerators, would it seem to make more sense to pursue a multidomestic strategy, a transnational strategy, or a global strategy? 1) A multidomestic strategy is advised because of the need for manufacturers to utilize the same marketing approaches worldwide. 2) A global strategy would make more strategic sense because of the opportunities for economies of scale in appliance manufacturing and the operation of centralized distribution centers. 3) A multidomestic strategy is recommended because of significant country-to-country differences in customer preferences, buying habits, and government regulations in the large appliance industry. 4) A multidomestic strategy would fit the industry environment best since customer preferences and electrical standards vary from country to country. 5) A global strategy would be advised since buyer needs are universal across the world.

3) A multidomestic strategy is recommended because of significant country-to-country differences in customer preferences, buying habits, and government regulations in the large appliance industry.

If your company's product is apparel and footwear, would a multidomestic strategy, a transnational strategy, or a global strategy seem to have more appeal? 1) A global strategy would be advised since buyer needs are universal across the world. 2) A multidomestic strategy is advised because of the need for manufacturers to utilize the same marketing approaches worldwide. 3) A transnational strategy is preferred since apparel and footwear items can reflect global fashion trends while being customized as needed because of country-to-country differences in customer preferences and tastes. 4) A global strategy would make more strategic sense because of the opportunities for economies of scale in apparel and footwear manufacturing and the operation of centralized distribution centers. 5) A multidomestic strategy would fit the industry environment best since customer preferences and style preferences vary from country to country.

3) A transnational strategy is preferred since apparel and footwear items can reflect global fashion trends while being customized as needed because of country-to-country differences in customer preferences and tastes.

Which of the following statements about corporate culture is true? 1) Most employees are quick to ignore company culture if they can reach a bonus or hit a short-term target. 2) Company culture has minimal effect on the extent to which employees buy into company values. 3) Company culture can be a powerful mechanism for communicating the degree to which a company is committed to its values. 4) Companies have little power to send to employees the message that ethics matter.

3) Company culture can be a powerful mechanism for communicating the degree to which a company is committed to its values.

Tailoring a company's business model to accommodate the unique local circumstances of developing countries is best exemplified by 1) Unilever's development of a low-cost detergent, named Wheel, for the Indian market. 2) Tata Motors' number one ranking in J. D. Power Asia Pacific's annual new-vehicle overall quality category. 3) Dell's entry into China by deviating from its traditional Internet-based orders to accommodate orders over phone and fax. 4) Home Depot's reliance on its value propositions only in some developing countries.

3) Dell's entry into China by deviating from its traditional Internet-based orders to accommodate orders over phone and fax.

What is a downside to an unethical business strategy? 1) It hurts the company's bottom line. 2) It is harder to implement. 3) It reflects badly on the character of the company and its employees. 4) It only serves the self-interest of shareholders.

3) It reflects badly on the character of the company and its employees.

Warby Parker's partnership with international nonprofit organizations like VisionSpring is an example of which triple bottom line performance metric? 1) Planet 2) Economic 3) People 4) Profit 5) Environment

3) People

In what ways do economic risks differ from political risks? 1) Political risks stem from hostility to foreign currencies, while economic risks stem from the instability of the monetary system. 2) Political risks stem from stability in foreign business, and economic risks stem from an excess of property right protections. 3) Political risks stem from instability in national governments, while economic risks stem from the stability of a country's monetary system, and its economic and regulatory policies. 4) Political risks stem from foreign businesses' hostilities to government, while economic risks stem from the instability of the monetary system. 5) Political risks stem from the stability of a country's monetary system, and economic risks stem from instability in national business.

3) Political risks stem from instability in national governments, while economic risks stem from the stability of a country's monetary system, and its economic and regulatory policies.

Which of the following is true of economies of scope? 1) They increase the costs of transferring resources among related businesses. 2) They are cost savings that accrue directly from a larger-sized operation. 3) They come directly from strategic fit along the value chains of related businesses. 4) They are no longer possible once a company becomes diversified.

3) They come directly from strategic fit along the value chains of related businesses.

A diversified company in which one core business accounts for 50% to 80% of total revenues and other businesses account for the remainder is known as 1) an emerging enterprise. 2) a broadly diversified enterprise. 3) a dominant-business enterprise. 4) a single-business enterprise.

3) a dominant-business enterprise.

Company cultures that spawn an ethically corrupt or amoral work climate encourage 1) self-dealing much more often than short-termism. 2) managerial actions to boost short-term revenues and earnings at the expense of long-term financial gains. 3) a tendency in employees to ignore "what's right" and engage in any behavior they think they can get away with. 4) a disregard for "first-order" ethical norms and a preference for "second-order" ethical norms. 5) a disregard for "second-order" ethical norms and a preference for "first-order" ethical norms.

3) a tendency in employees to ignore "what's right" and engage in any behavior they think they can get away with.

Companies that implement a transnational strategy often employ mass-customization techniques designed to 1) address the needs of only wealthy consumers in any given market. 2) ignore local preferences in favor of a highly efficient, standardized model. 3) accommodate local preferences in a semi-standardized way. 4) accommodate local preferences by any means necessary.

3) accommodate local preferences in a semi-standardized way.

If significant economies of scale exist, a company that concentrates on a limited number of locations can do what? 1) drive up distribution costs for its rivals 2) disregard all the costs of distribution 3) achieve major cost savings 4) benefit from cross-border coordination

3) achieve major cost savings

Economies of scope 1) stem from cost-saving efficiencies of operating overseas. 2) accrue from a larger-sized operation. 3) are cost reductions that flow from strategic fit along the value chains of related businesses. 4) arise mainly from strategic fit relationships in the distribution portions of the value chains of unrelated businesses. 5) create more value for shareholders just as economies of scale do.

3) are cost reductions that flow from strategic fit along the value chains of related businesses.

When activist groups criticized Nike for the working conditions in the Asian factories that produced Nike footwear, company chairman Phil Knight 1) argued that working conditions in the factories were excellent compared to those in other factories in Asia. 2) ignored the accusations, believing that the negative publicity would not last. 3) began to monitor working conditions in the factories that made Nike products. 4) launched a smear campaign against the activist groups that had criticized the company.

3) began to monitor working conditions in the factories that made Nike products.

A crisis in the residential real estate market was caused in part by which of the following strategies by some banks and mortgage companies? 1) raising lending standards to ensure that only the wealthiest, safest customers purchased mortgages 2) keeping higher-risk loans separate from low-risk loans as part of their loan portfolios 3) boosting fees earned on home mortgages by lending to high-risk clients 4) disguising the nature of the loans and repackaging them for sale to investors

3) boosting fees earned on home mortgages by lending to high-risk clients 4) disguising the nature of the loans and repackaging them for sale to investors

Adherents of ethical universalism are likely to believe that 1) treating others with decency is something a businessperson learns how to do over time. 2) a corporation needs to be pragmatic as it balances financial goals with notions of right and wrong. 3) common agreement about right and wrong is the basis for ethical standards that apply to all businesspeople. 4) societies with strong religious traditions produce the most ethical businesspeople.

3) common agreement about right and wrong is the basis for ethical standards that apply to all businesspeople.

A company's environmental sustainability strategy 1) is incompatible with the triple-bottom-line approach because it does not take into account people and profits.. 2) entails business practices that meet the needs of the future by rationing what is provided to present-day customers. 3) consists of a company's actions to protect the environment, provide for the longevity of natural resources, and maintain ecological support systems for future generations. 4) has a strong historical correlation with increases in the well-being of the environment and economic growth 5) always takes a back seat to strategies designed to improve a company's standing in the marketplace.

3) consists of a company's actions to protect the environment, provide for the longevity of natural resources, and maintain ecological support systems for future generations.

A company trying to gain advantages over domestic rivals by shifting production from a plant in one country to a plant in another to profit from exchange rate fluctuations is using cross-border 1) sales. 2) taxation. 3) coordination. 4) shipping.

3) coordination.

A country's desirability as a low-cost manufacturing location can vary frequently depending on shifts in the country's 1) seasonal rainfall average. 2) population growth. 3) currency exchange rate. 4) transportation infrastructure.

3) currency exchange rate.

To compete in an international market, a basic decision companies must make is whether to ______ to accommodate cross-country differences in buyer tastes and preferences. 1) provide free samples 2) open physical retail locations 3) customize products and services 4) implement door-to-door selling

3) customize products and services

Research has shown a link between product-boycott announcements and 1) positive media attention. 2) consumer satisfaction. 3) declining stock prices. 4) increased sales.

3) declining stock prices.

The most important strategic issue for companies to resolve when competing in international markets is 1) deciding which price strategy to follow 2) finding out about the regulation process and political and capital requirements 3) determining whether to standardize or customize the company's offerings 4) avoiding the risks of shifting exchange rates 5) choosing between a global, transnational, or international strategy

3) determining whether to standardize or customize the company's offerings

Relative market share as a measure of competitive strength is calculated by 1) subtracting the company's market share (based on dollar volume) from the industry-average market share and comparing it to the main competitors. 2) dividing the total market volume by the company's sales to determine its relative market share. 3) dividing the business's percentage share of total industry sales volume by the percentage share held by its largest rival—it is a better indicator of a business's competitive strength than is a simple percentage measure of market share. 4) dividing the business's percentage share of total industry sales volume by the percentage share held by its five largest rivals. 5) subtracting the industry-average market share (based on dollar volume) from a company's market share to determine how much a company's market share is above/below the industry average—this amount is a better indicator of a business's competitive strength than is just looking at the firm's market share percentage.

3) dividing the business's percentage share of total industry sales volume by the percentage share held by its largest rival—it is a better indicator of a business's competitive strength than is a simple percentage measure of market share.

In terms of a country's business climate, a country's inflation rate and level of deficit spending are types of 1) demand conditions. 2) social risk. 3) economic risk. 4) factor conditions.

3) economic risk.

Cost reductions stemming from strategic fit along the value chains of related businesses can result in 1) cross-business strategic fits. 2) related diversification. 3) economies of scope. 4) economies of scale. 5) unrelated diversification.

3) economies of scope.

Disney's expansion from short films to animated films to live action films to television is an example of 1) expansion into vertical markets to address critical supplier power. 2) expansion into vertical markets by leveraging a core asset. 3) expansion into new markets by leveraging a core capability. 4) expansion into new geographies by leveraging assets. 5) expansion into new geographies by leveraging a core capability.

3) expansion into new markets by leveraging a core capability.

Combination related-unrelated diversification strategies have particular appeal for companies 1) desiring high compensation and reduced employment risk. 2) focusing on growth for growth's sake to maximize shareholder value. 3) having a mix of valuable competitive assets, covering the spectrum from generalized to special resources and capabilities. 4) operating in niche markets where specialized resources and capabilities are needed. 5) looking to reduce risk by spreading the company's investments over a set of truly diverse industries.

3) having a mix of valuable competitive assets, covering the spectrum from generalized to special resources and capabilities.

Spurring market growth in a domestic market can translate into an international competitive advantage owing to which of the following? 1) challenging cultural norms 2) fostering community growth 3) increasing innovation and quality improvements 4) reducing the need for domestic partnerships

3) increasing innovation and quality improvements

If the question of critical resources and capabilities demonstrates that a company has or can easily lease all of the materials necessary to start a new business, it will probably do so by 1) acquisition. 2) joint venture. 3) internal development. 4) liquidation.

3) internal development.

Determining the competitive value of strategic fit in diversified companies 1) is based on the skills and other assets that cannot be shared between related businesses. 2) can be bypassed for companies with related businesses. 3) is important in evaluating their related diversification strategies. 4) is most useful for companies with unrelated businesses.

3) is important in evaluating their related diversification strategies.

One of the five primary strategic options a company can use to expand into a foreign market is to 1) pressure foreign manufacturers to shut down. 2) donate money to the foreign country's state religion. 3) maintain a domestic production base while exporting goods. 4) bribe government officials to lower import tariffs.

3) maintain a domestic production base while exporting goods.

A company's corporate social responsibility strategy commonly does not include actions to 1) promote workforce diversity. 2) ensure the company operates honorably and ethically. 3) maximize returns for shareholders. 4) enhance employee well-being and make the company a great workplace. 5) protect and sustain the environment.

3) maximize returns for shareholders.

The effects of fluctuating exchange rates on companies competing in foreign markets 1) may harm domestic companies under pressure from lower-cost imports when their government's currency grows weaker in relation to the currencies of the countries where the imported goods are being made. 2) can produce sometimes favorable and sometimes unfavorable effects on a company's competitiveness. 3) may benefit domestic companies under pressure from lower-cost imports when their home currency grows weaker in relation to the currencies of the countries where the imported goods are being made. 4) favor exporters if their home currencies weaken relative to those currencies of the particular export markets. 5) pose significant risks to a company's competitiveness in foreign markets.

3) may benefit domestic companies under pressure from lower-cost imports when their home currency grows weaker in relation to the currencies of the countries where the imported goods are being made.

The strategic option of home-based production and export allows a company to do what? 1) make use of the expertise of a company in a foreign country 2) provide better conditions for the poor in a foreign country 3) minimize its direct investment in foreign countries 4) limit its involvement in foreign markets

3) minimize its direct investment in foreign countries 4) limit its involvement in foreign markets

Companies practicing unrelated diversification overwhelmingly enter new businesses by 1) forming a startup subsidiary within their own corporate structure. 2) participating in joint ventures. 3) obtaining an established company. 4) selling their trade secrets to another company in exchange for a share of that company's profits.

3) obtaining an established company.

Companies that place little importance on operating in a socially responsible manner may be vulnerable to criticism from pressure groups whose tactics include 1) using the Internet to help companies avoid embarrassment. 2) public relations campaigns that put a positive spin on company behaviors. 3) promoting product boycotts. 4) generating negative publicity in the media.

3) promoting product boycotts. 4) generating negative publicity in the media.

Regulations, government policies, and requirements in host countries have a major effect on the operations of foreign companies. Which of the following does not reflect a typical regulation? 1) implementing rules and policies that protect and prefer local companies over foreign firms 2) establishing local content requirement on goods sold inside their borders by foreign companies 3) providing low-interest loans to foreign companies 4) placing restrictions on imports to support domestic production 5) imposing tariffs on imported goods

3) providing low-interest loans to foreign companies

A domestic company can defend against expanding international companies through which methods? 1) avoiding expansion of the company and its facilities 2) disregarding their rivals' marketing tactics 3) pursuing mergers and acquisitions 4) spreading rumors that there is too much competition 5) employing a rapid-growth strategy

3) pursuing mergers and acquisitions 5) employing a rapid-growth strategy

After a evaluating the strength, attractiveness, and fit of a diversified company's strategy, the next move is to 1) evaluate each business's brand recognition. 2) classify each business as a cash hog or a cash cow. 3) rank the performance potential of the businesses. 4) rank each of the businesses in terms of how long the company has held them.

3) rank the performance potential of the businesses.

Corporate strategic options for diversified companies would not normally entail 1) restructuring the company's business lineup through a mix of divestitures and new acquisitions. 2) broadening the diversification base by adding and acquiring more businesses. 3) repurchasing shares of the company's common stock and building cash reserves by investing in short-term securities. 4) sticking closely with the existing business line when the current business line offers attractive growth opportunities. 5) divesting weak-performing businesses and retrenching to a narrower base of business operations.

3) repurchasing shares of the company's common stock and building cash reserves by investing in short-term securities.

When a firm with a related diversification strategy has businesses that match specialized resource requirements at points along their value chains that are critical for the business's market success, they are said to have 1) corporate parenting. 2) competitive value. 3) resource fit. 4) moderate growth potential.

3) resource fit.

Diversifying into new industries 1) is a poor idea when a single-business company sees stagnating sales in its principal business. 2) is generally regarded as a last-ditch strategy to save a failing company. 3) should be explored when a single-business company encounters dwindling opportunities in its principal business. 4) becomes urgent when a company has plentiful opportunities for growth in its present industry.

3) should be explored when a single-business company encounters dwindling opportunities in its principal business.

Social activists in industrialized countries who focus on the issue of child labor claim that corporations 1) should support firms in Zimbabwe, Somalia, and Pakistan by outsourcing work in those countries. 2) should employ children as long as no children engage in hazardous work. 3) should not obtain products from foreign suppliers that use underage workers. 4) should source products from countries where child can work to help support their families.

3) should not obtain products from foreign suppliers that use underage workers.

The major benefit of a related diversification strategy is 1) that this strategy passes not only the industry attractiveness test but also offers the best route to 2 + 2 = 4 benefits. ·2) that this strategy is less capital intensive and usually less risky than unrelated diversification. 3) that it offers potential 1 + 1 = 3 or "synergy" benefits because of valuable cross-business relationships among the value chains of the corporation's different businesses. 4) that this strategy leads to competitive advantage and increased profitability. 5) that it can propel the company's business forward and help it gain ground over its market rivals.

3) that it offers potential 1 + 1 = 3 or "synergy" benefits because of valuable cross-business relationships among the value chains of the corporation's different businesses.

In general, business ethics consists of 1) violations of signed contracts or informal agreements between two agents acting on behalf of their employers. 2) breaches in moral and ethical standards that occur in the business world. 3) the application of ethical principles and standards to the actions and decisions of business organizations. 4) the application of theological principles to the conduct of business in international trade relations.

3) the application of ethical principles and standards to the actions and decisions of business organizations.

Businesses are said to be related when 1) customers make a brand association linking them. 2) one business cannot function without resources or supplies provided by the other. 3) their value chains exhibit competitively important cross-business commonalities. 4) they use similar marketing strategies.

3) their value chains exhibit competitively important cross-business commonalities.

Which of the following is a reason for a business to establish an ethical business strategy? 1) to imitate the business practices of the most successful companies in the United States 2) to donate most of its profits to socially responsible causes in its community 3) to provide a competitive advantage, serving the self-interest of shareholders 4) to put the interests of the shareholders above the interests of other constituents the corporations serves.

3) to provide a competitive advantage, serving the self-interest of shareholders

By transferring company expertise to cross-border markets, a domestic company can successfully do what? 1) avoid the downsides of becoming a giant global company 2) give more back to the international community 3) transform into a global company in its own right 4) bypass competition with industry rivals

3) transform into a global company in its own right

Self-dealing refers to instances when managers 1) resign from their positions to address family issues rather than keeping work their number one priority. 2) use their position to promote the interests of the firm rather than their own personal interests. 3) use their position to promote their own private interests rather than the interests of the firm. 4) participate in investigations of insider trading and other ethical violations.

3) use their position to promote their own private interests rather than the interests of the firm.

A company that wishes to control all aspects of its operation when it expands into foreign markets should establish a 1) licensor-licensee agreement. 2) resource transfer. 3) wholly owned subsidiary. 4) venture franchise.

3) wholly owned subsidiary.

Which of the following is a way by which a company can successfully compete in a developing country market as shown by Japan's Suzuki when it entered India? 1) Purchase local air time on public radio. 2) Launch attack ads at rival companies. 3) Force officials to award the company government contracts. 4) Change the local market to match the company's core operations.

4) Change the local market to match the company's core operations.

Disney relied on licensing agreements with the Oriental Land Company to open its first foreign theme park, Tokyo Disneyland, which resulted in 1) Disney's taking advantage of the Japanese consumer buying habits and demographics that no longer posed a challenge. 2) Disney's reaping the windfall from the agreement because of learning curve effects. 3) Disney's meeting the challenge of localizing its product offerings in Japan, leading to a low-cost advantage. 4) Disney's licensing partner, the Oriental Land Company, reaping the windfall, since the partner who bore the risk was also likely to be the biggest beneficiary from any upside gain. 5) Disney's reduced concerns over fluctuating exchange rates and country-to-country variations

4) Disney's licensing partner, the Oriental Land Company, reaping the windfall, since the partner who bore the risk was also likely to be the biggest beneficiary from any upside gain.

Which of the following is true of economies of scope? 1) They increase the costs of transferring resources among related businesses. 2) They are cost savings that accrue directly from a larger-sized operation. 3) They are no longer possible once a company becomes diversified. 4) They come directly from strategic fit along the value chains of related businesses.

4) They come directly from strategic fit along the value chains of related businesses.

Which company in the list below is not noted as an example of firms that pursue sustainability strategies? 1) Staples 2) Keurig Green Mountain 3) Johnson & Johnson 4) Wells Fargo Bank 5) Unilever

4) Wells Fargo Bank

The core concept of corporate social responsibility (CSR) can best be expressed as 1) deliberate actions to protect the environment, provide for the longevity of natural resources, maintain ecological support systems for future generations, and guard against endangering the planet. 2) fostering social betterment while disregarding shareholders' expectations of maximum return. 3) the specific combination of financially beneficial activities the company opts to support with its contributions of time, money, and other resources. 4) a company's duty to operate in an honorable manner, provide good working conditions for employees, encourage workforce diversity, be a good steward of the environment, and actively work to better the quality of life in local communities and in society at large. 5) the responsibility that top management has for ensuring that the company's actions and decisions are in the best interest of society.

4) a company's duty to operate in an honorable manner, provide good working conditions for employees, encourage workforce diversity, be a good steward of the environment, and actively work to better the quality of life in local communities and in society at large.

Diversified companies that are able to create more value in their businesses than other diversified companies have what is called 1) an advantage of fit. 2) a related advantage. 3) an unrelated advantage. 4) a parenting advantage.

4) a parenting advantage.

Natural-resource companies move into foreign markets to 1) develop alternative-fuel technology. 2) increase market competition. 3) learn about and support different cultures. 4) access supplies of raw material more cost-effectively.

4) access supplies of raw material more cost-effectively.

A diversified company's base can be broadened by 1) focusing corporate resources on businesses in a few, carefully selected industries. 2) Msticking closely with the existing business lineup. 3) getting out of businesses that are competitively weak. 4) acquiring more businesses and building positions in new industries.

4) acquiring more businesses and building positions in new industries.

When a company's existing businesses provide opportunities for growth and produce economic value for shareholders, it makes sense to 1) retrench to a narrower base of business operations. 2) put a new face on the company's business makeup. 3) broaden the company's business scope. 4) adhere to the existing business lineup.

4) adhere to the existing business lineup.

CSR and environmental sustainability strategies are most likely to be effective when they 1) promote diversity in the workplace. 2) require little effort to launch and sustain over time. 3) involve charitable donations and community service. 4) are linked to a company's value chain or to its most important resources.

4) are linked to a company's value chain or to its most important resources.

According to the school of ethical universalism, the most important concepts of what is right and what is wrong 1) vary significantly according to local cultural beliefs, traditions, or religious convictions. 2) are mandatory, and every company has to apply and adhere to a set of rules. 3) are based on the belief that local moral standards should take precedence over the ethical standards in the company's home market. 4) are universal and transcend culture, society, and religion. 5) are dictated by subjectively provable moral principles, but not by objectively provable moral principles.

4) are universal and transcend culture, society, and religion.

Strategic analysis of diversified companies _____. 1) requires mastery of fewer analytic tools than single-business companies 2) serves as a basis to build on when analyzing single-business companies 3) requires three steps 4) builds on the same ideas and techniques used for analyzing single-business companies

4) builds on the same ideas and techniques used for analyzing single-business companies

Creating a strategy for entering an international market can be more difficult than entering a domestic market because 1) non-domestic companies that produce similar products are not allowed to operate in the same country. 2) most countries require companies to pay hefty bribes to enter a new market. 3) consumers everywhere are naturally reluctant to accept new products and services. 4) buyer preferences in foreign markets force companies to customize their products.

4) buyer preferences in foreign markets force companies to customize their products.

The crafting of strategic moves to improve a diversified company's overall performance 1) can be applied only to diversification into unrelated businesses. 2) can be determined by using a nine-cell matrix. 3) all fall under the category of broadening a company's scope. 4) can be placed into four broad categories of action.

4) can be placed into four broad categories of action.

In response to Nike's efforts to restore its reputation, human rights activist groups have 1) publicly apologized to Nike for making false accusations against the company. 2) promoted Nike products as a way of recognizing the company's commitment to socially responsible behavior. 3) attempted to help Nike restore its reputation. 4) continued to monitor and criticize Nike.

4) continued to monitor and criticize Nike.

The primary reason that Facebook Inc. decided to expand outside its United States home market was to 1) achieve differentiation through economies of scale, experience, and increased purchasing power. 2) match its core competencies and capabilities with rival social media companies such as Snapchat and Instagram. 3) identify new and stronger resources and capabilities in its home market 4) gain access to new customers for the company's products/services. 5) increase its business risk by competing with local social media providers such as WeChat.

4) gain access to new customers for the company's products/services.

Under the concept of the triple bottom line, profit 1) refers to the impact of a firm's environmental practices on the planet. 2) is the money the company makes from social initiatives and charitable ventures. 3) has the same meaning that it has in the ordinary context of business discussions. 4) includes the value the company creates and the costs it imposes on society.

4) includes the value the company creates and the costs it imposes on society.

Companies that employ a multidomestic strategy attempt to meet buyer needs by 1) providing add-on services to first-time buyers. 2) partnering with government officials to advertise new products. 3) offering a standardized product or service in all countries. 4) offering different products and services in different countries.

4) offering different products and services in different countries.

In order to be a good market for a company to be in, an industry should 1) have been around for at least a decade. 2) have broad internal diversification. 3) be recovering from a period of steep decline. 4) pass the industry attractiveness test.

4) pass the industry attractiveness test.

In terms of a country's business climate, the instability or weakness of a national government is a type of 1) economic risk. 2) nationalization. 3) factor condition. 4) political risk.

4) political risk.

The financial options for allocating a diversified company's financial resources do not include 1) repurchasing shares of the company's common stock. 2) making acquisitions to establish positions in new industries or to complement existing businesses. 3) funding long-range R&D ventures aimed at opening market opportunities in new or existing businesses. 4) purchasing competitively weak businesses or businesses in unattractive industries. 5) investing in ways to strengthen or grow existing businesses

4) purchasing competitively weak businesses or businesses in unattractive industries.

The primary problem that franchisors face over foreign-market expansion is the lack of ______ control. 1) political 2) legal 3) inventory 4) quality

4) quality

A competitively valuable strategic fit is not derived from 1) sharing other resources that support corresponding value chain activities of the businesses, such as relationships with suppliers or a dealer network 2) combining the related value chain activities of separate businesses into a single operation to achieve lower costs 3) transferring specialized expertise, technological know-how, or other competitively valuable capabilities from one business's value chain to another's value chain. 4) restricting cross-business linkages among value chain activities 5) exploiting common use of a well-known brand name

4) restricting cross-business linkages among value chain activities

A corporate social responsibility strategy can be defined as 1) a list of a company's ethical standards and core values. 2) government regulation of a corporation's business strategy. 3) a networking strategy that promotes brand recognition and opens new revenue streams. 4) the combination of socially responsible endeavors a company elects to pursue.

4) the combination of socially responsible endeavors a company elects to pursue.

Factors that do not make competing across national borders more difficult than competing domestically include 1) country-to-country differences in consumer buying habits and buyer tastes and preferences 2) the potential for location-based advantages in some countries 3) vulnerability to adverse shifts in currency exchange rates 4) the difficulty in achieving strategic fit in sales and marketing activities 5) variations in government policies, tax rates, inflation rates, and other economic conditions from country to country

4) the difficulty in achieving strategic fit in sales and marketing activities

A major advantage of using export strategies to enter international markets is that 1) these are less costly and the most efficient compared to the other options for entering and competing in international markets. 2) these are the best method to overcome high entry barriers. 3) these are the most efficient and flexible method to discover and accommodate changes in local demand. 4) these minimize risks and capital requirements. 5) these can be used to avoid tariffs and curb the effects of fluctuating exchange rates.

4) these minimize risks and capital requirements.

Ethical business strategies 1) can usually be sustained in a company with minimal effort. 2) usually contain some ethically questionable components. 3) require highly paid management to be sustained. 4) typically arise from managers with strong moral characters.

4) typically arise from managers with strong moral characters.

Corporate brands that do not have a connotation of any specific type of product are known as 1) scope brands. 2) scale brands. 3) generic brands. 4) umbrella brands.

4) umbrella brands.

The drawbacks of an unrelated diversification strategy include 1) cultural conflicts and very demanding financial requirements. 2) limited competitive advantage potential. 3) minimal potential for shareholder value creation and financial stability. 4) very demanding managerial requirements and limited competitive advantage potential. 5) financial instability and very demanding managerial requirements.

4) very demanding managerial requirements and limited competitive advantage potential.

The basic tenet of the school of ethical relativism states that 1) concepts of right and wrong as applied to business situations are always a function of each company's own set of values, beliefs, and ethical convictions. 2) the standards of what constitutes ethical and unethical behavior in business situations are partly universal, but are mainly governed by local business norms. 3) individuals and businesses have a basic right to "moral free space," and it is inappropriate to specify permissible and impermissible actions and behaviors. 4) what constitutes ethical or unethical behavior on the part of local businesspeople is properly governed by local ethical standards rather than the standards that prevail in other locations. 5) many basic moral standards travel well across cultures and countries and really do not vary significantly according to local beliefs, mores, convictions, or circumstances.

4) what constitutes ethical or unethical behavior on the part of local businesspeople is properly governed by local ethical standards rather than the standards that prevail in other locations.

Unrelated diversification requires that company managers spend much time and effort screening acquisition candidates using all of the following criteria except 1) whether the business can meet corporate targets for profitability. 2) whether the business can meet corporate targets for return on investment. 3) whether the business is in an industry with attractive growth potential. 4) whether the business has a cross-business strategic fit. 5) whether the business is big enough to contribute significantly to the parent firm's bottom line.

4) whether the business has a cross-business strategic fit.

Diversification is not really viewed as a success unless it _____. 1) results in short-term gains for shareholders 2) more than doubles the annual cash flow of a company 3) lowers the overall tax burden on a company 4) yields added long-term economic value for shareholders

4) yields added long-term economic value for shareholders

1. If your company's product is mobile phones, do you think it would make better strategic sense to employ a multidomestic strategy, a transnational strategy, or a global strategy? 1) A transnational strategy would be appropriate since the same strategic theme could be employed, but country-to-country customization is necessary to accommodate consumer preferences in mobile phone features. 2) A transnational strategy would make better strategic sense since it would be difficult to employ essentially the same strategic theme in all country markets. 4) A global strategy makes best strategic sense since country-to-country customization to fit local market conditions is necessary. 5) A global strategy would be appropriate since most mobile phones are constructed to work globally and buyer needs across the world are relatively universal.

5) A global strategy would be appropriate since most mobile phones are constructed to work globally and buyer needs across the world are relatively universal.

Imagine that you have been asked to justify to your top management team several reasons why the exercise of social and environmental responsibility may also be good business for your company. What justification would you not likely use? 1) Such actions can lead to increased buyer patronage. 2) New opportunities for revenue enhancement may also come from CSR and environmental sustainability strategies. 3) Well-conceived CSR strategies and sustainable business practices are in the best long-term interests of shareholders. 4) Our strong commitment to socially responsible behavior will reduce the risk of reputation-damaging incidents. 5) Passing the environmental and other social costs associated with our company's activities on to society as a whole can help us to reap large short-term profits.

5) Passing the environmental and other social costs associated with our company's activities on to society as a whole can help us to reap large short-term profits.

The procedure for evaluating a diversified company's strategy does not entail 1) assessing the competitive strength of each business the company has diversified into and determining which ones are strong/weak contenders in their respective industries. 2) ranking the performance prospects of the various businesses from best to worst and determining what the corporate parent's priorities should be in allocating resources to its different businesses. 3) checking whether the firm's resources fit the requirements of its present business lineup. 4) checking the competitive advantage potential of cross-business strategic fit among the company's various business units. 5) determining the degree of risk involved with each business unit

5) determining the degree of risk involved with each business unit

Key indicators of industry attractiveness include 1) social and political factors, barriers to entry, and the intensity of competition. 2) barriers to entry, overall profitability of the industry, and whether there are only a few major players in the market. 3) strategic-fit, existence of economies of scope, and social and political factors 4) the existence of economies of scope and whether an industry has significant social, political, regulatory, and environmental problems. 5) emerging opportunities and threats, industry profitability, and market size and projected growth rate.

5) emerging opportunities and threats, industry profitability, and market size and projected growth rate.

A "cash hog" type of business 1) is always a candidate for divestiture. 2) generates cash flows over and above its internal requirements. 3) generates cash flows exactly matching the demand for operations and growth. 4) has a good resource fit with a cash cow business and is essential to a diversified company's lineup of businesses. 5) generates cash flows that are too small to fully fund its operations and growth.

5) generates cash flows that are too small to fully fund its operations and growth.

Cross-border acquisition strategies provide companies with the advantage of 1) being able to avoid the addition of debt 2) minimizing the costs and risks associated with establishing a foreign business location 3) being able to benefit from collaborative research 4) setting up every aspect of the operation to its specification 5) having a high level of control, as well as speed, when entering a market on a large scale

5) having a high level of control, as well as speed, when entering a market on a large scale

An unlikely pitfall that is associated with pursuing strategic alliances with foreign partners is 1) getting alliance partners to reach decisions fast enough to stay abreast of rapid advances 2) dealing with diverse operating practices, conflicting objectives, and strategies 3) reaching mutual agreements to deal with key issues and resolve differences 4) overcoming cultural and language barriers 5) making it harder to pursue a multidomestic strategy as compared to a global strategy

5) making it harder to pursue a multidomestic strategy as compared to a global strategy

Short-termism involves 1) managers assessing only the short-term costs of complying with government regulations. 2) managers taking advantage of their position to further their own private interest rather than those of the firm. 3) managers developing short-term corporate social responsibility strategies and failing to develop long-term sustainability strategies. 4) managers overly focusing on long-term performance and disregarding both the day-to-day business and short-term goals. 5) managers focusing excessively on short-term performance objectives at the expense of long-term strategic objectives.

5) managers focusing excessively on short-term performance objectives at the expense of long-term strategic objectives.

Sustainability does not 1) concern a firm's relationship to the environment and its use of natural resources. 2) serve to meet the needs of the present without compromising the world's ability to meet future needs. 3) have a close association with corporate social responsibility. 4) consist of deliberate actions to protect the environment, provide for the longevity of natural resources, maintain ecological support systems for future generations, and guard against ultimate endangerment of the planet. 5) require that shareholders be prepared to accept lower returns to support environmental protection.

5) require that shareholders be prepared to accept lower returns to support environmental protection.

Self-dealing occurs when managers 1) refuse to accept oversight by the company's corporate board. 2) focus excessive attention on short-term performance objectives at the expense of longer-term strategic objectives. 3) entrust their employees to behave ethically and implement self-regulating processes. 4) try to overcome ethical issues by implementing a code of conduct and control the adherence. 5) take advantage of their position to further their own private interests rather than those of the firm.

5) take advantage of their position to further their own private interests rather than those of the firm.

Integrated social contracts theory states that 1) there is no "moral free space" for the people in a particular country (or local culture or even a company) to decide what actions may or may not be permissible within the bounds of business ethics. 2) the slippery slope of ethical relativism is rejected and ethical universalism is embraced. 3) local ethical norms always take precedence over universal ethical norms, thus local ethical norms can be less stringent than the universal ethical standards. 4) cultural differences give rise to different ethical standards, meaning there is no one culture that is more "ethically correct" than another. 5) universal ethical principles or norms are based on the collective views of multiple cultures, and societies combine to form a "social contract" that all individuals, groups, organizations and businesses in all situations have a duty to observe.

5) universal ethical principles or norms are based on the collective views of multiple cultures, and societies combine to form a "social contract" that all individuals, groups, organizations and businesses in all situations have a duty to observe.

subsidization refers to supporting competitive offensives in one market with resources and profits diverted from operations in another market.

Cross-market

True or false: Ethical principles in business differ substantially from general ethical principles in society. True False

False

__________ __________, or the decision on the part of two companies to refrain from launching aggressive actions against each other, may occur when the companies compete against one another in multiple geographic markets

Mutaul restraint

Cross-market subsidization can be a powerful competitive weapon for companies operating in numerous markets. True False

True

One method of broadening a company's diversification base is to add businesses that will complement and strengthen the market position of businesses in industries where the company already has a stake. True False

True

One way a domestic company can successfully compete against a global business giant is by exploiting shortcomings in the global company's local distribution networks. True False

True

An international strategy is a company's strategy for competing in two or more ______ simultaneously. cities countries product lines business models

countries

Which of the following measures is most likely to reduce the practice of self-dealing in a company? encouraging the practice of sharing confidential information to give others an advantage in the stock market offering managers large bonuses for hitting quarterly targets putting pressure on managers to reach short-term goals establishing an independent board to hold managers accountable for their actions

establishing an independent board to hold managers accountable for their actions