MAN4720 CH 10 Quiz and Questions

National culture, according to Geert Hofstede, can be defined as different groups' distinctive ______. - cultural, political, geographic, and religious traits - racial makeup - "programming of the mind" - and explicitly understood "rules of the game"

"programming of the mind"

Select all that apply For a U.S. company doing business internationally, which of the following would be examples of local responsiveness? (Check all that apply.) - Ford selling the same car models in the United States and Mozambique - Ikea selling metal chopsticks in South Korea - Walmart selling live animals for food preparation in China - McDonald's selling teriyaki burgers in Japan

- Ikea selling metal chopsticks in South Korea - Walmart selling live animals for food preparation in China - McDonald's selling teriyaki burgers in Japan

Which country experienced rapid economic growth in the early 21st century and now challenges the United States for global economic supremacy? - China - Turkey - South Africa - Mexico

China

The process of closer integration and exchange between different countries and peoples worldwide, made possible by falling trade and investment barriers, advances in telecommunications, and reductions in transportation costs, is known as ______. - globalization - direct aid - unification - barriers to entry

Globalization

The Bluth Company is a condominium-building company that is based in the country of Veritas. It sells high-priced homes to consumers in Veritas as well as to consumers in other countries. It has extremely high brand loyalty. The industry it operates in is characterized by low pressure for local responsiveness and low pressure for cost reductions. In this scenario, The Bluth Company most likely pursues a(n) _________ strategy. - international - localization - multidomestic - transnational

International

Which of the following statements about the CAGE distance framework is true? - It helps MNEs restore their reputations after suffering from loss of reputation following international expansion - Its purpose is to help MNEs determine whether or not they should expand internationally - It instructs MNEs how to avoid the liability of foreignness - It is designed to aid MNEs in deciding where to compete in the world

It is designed to aid MNEs in deciding where to compete in the world

Which of the following statements is true of local responsiveness? - It helps reinforce a cost-leadership strategy at the business level - Local responsiveness generally entails higher costs - It reduces the differentiation of products and services - Local responsiveness forms the basis for the globalization hypothesis

Local responsiveness generally entails higher costs

When pursuing an international strategy, a company ______. - sells locally customized products in each market - does not sell domestically - sells the same product in both domestic and foreign markets - sells only low-cost options of their core product in foreign markets

Sells the same product in both domestic and foreign markets

As MNEs compete internationally, a focus on local responsiveness allows them to do which of the following? - open new production facilities quickly and without political interference - deliver the same standardized product to all markets throughout the world - independently convert foreign currency into domestic currency - tailor product offerings to fit local preferences and requirements

Tailor product offerings to fit local preferences and requirements

Which of the following factors best helps capture administrative and political distances? - the wealth and per capita income of consumers - the linguistic and religious differences between two countries - the physical size and topography of a country - the absence or presence of weak legal and financial institutions

The absence or presence of weak legal and financial institutions

True or false: U.S. MNEs have a disproportionately positive impact on the U.S. economy.

True

Foreign direct investments are investments in ______. - domestic products that are in high demand by foreign customers - reducing overhead in foreign countries - value chain activities abroad - limiting competition abroad

Value chain activities abroad

Select all that apply Which of the following are distinctive features of globalization 3.0? (Check all that apply.) - The global headquarters in the United States sets goals for all local subsidiaries - MNEs reorganize into a more seamless global enterprise - Technology helps reduce communication distances - Firms create global networks of local expertise

- MNEs reorganize into a more seamless global enterprise - Technology helps reduce communication distances - Firms create global networks of local expertise

Select all that apply Which of the following characteristics help make an MNE's international strategy successful? (Check all that apply.) - strong reputation - weak domestic-spending - prominent brand names - large domestic markets

- strong reputation - prominent brand names - large domestic markets

Which of the following statements about workers in the United States versus workers in other countries is true? - Highly skilled foreign workers employed in the United States make 20 times less than their U.S. counterparts - Foreign workers employed in the United States are generally paid according to the standard salaries in their native countries - A manufacturing worker in the United States makes significantly less than a similar worker in China - A manufacturing worker in the United States makes several times what a similar worker in China

A manufacturing worker in the United States makes several times what a similar worker in China

The cultural disparity between the internationally expanding firm's home country and its targeted host country is known as ______. - nationalism - cultural equidistance - cultural distance - uncertainty avoidance

Cultural distance

Prestige Worldwide Inc. owns coffee plantations in Brazil. The company trades its coffee produce directly with coffee merchants in foreign markets who later resell and distribute it throughout their country. In this scenario, Prestige Worldwide's activities best illustrate - a greenfield operation - a strategic alliance - exporting - importing

Exporting

The oldest form of internationalization is ______, which involves producing goods in one country to sell in another country. - licensing - importing - exporting - franchising

Exporting

Tyrell Corporation is an electronics company based in the country of Palmia. The company has manufacturing facilities in four other countries where labor costs are low. It also has its research centers in three other countries because these countries offer best-of-class capabilities. However, Tyrell Corporation does not offer much product differentiation, which means that price is the main competitive weapon. In this scenario, Tyrell Corporation most likely implements a __________ strategy. - transnational - global-standardization - multidomestic - global matrix

Global-standardization

"A process of closer integration and exchange between different countries and peoples worldwide, made possible by falling trade and investment barriers, advances in telecommunications, and reductions in transportation costs" is the definition of - traditionalism - privatization - globalization - nationalism

Globalization

Which of the following is a feature of Logitech as a global collaboration network? - It has been able to operate as a multinational company with self-contained operations in a few key countries - Logitech has been able to keep its knowledge flow one-way, from its domestic headquarters to international outposts - The company has been able to organize work continuously because its teams in different locations around the globe can work 24/7 - It has been unable to keep its costs low because of its centers of expertise that are spread across the globe

The company has been able to organize work continuously because its teams in different locations around the globe can work 24/7

Select all that apply Calculating cultural distance involves comparing the cultures of which of the following? (Check all that apply.) - a firm's employees - a targeted host country - a firm's home country - a firm's managers and executives

- a targeted host country - a firm's home country

Select all that apply Which of the following dimensions are considered in the CAGE distance framework? (Check all that apply.) - geographic distance - cultural distance - architectural distance - economic distance

- geographic distance - cultural distance - economic distance

Select all that apply Which of the following factors helped make Germany, which was a tough environment for a car company, conducive to successful car companies? - low domestic gas prices - no-speed-limit autobahn - fierce domestic competition - demanding customers

- no-speed-limit autobahn - fierce domestic competition - demanding customers

Select all that apply What are the factors in Michael Porter's model of national competitiveness? (Check all that apply.) - public utilities - related industries/complementors - competitive intensity in a focal industry - factors conditions - governmental regulations - demand conditions

- related industries/complementors - competitive intensity in a focal industry - factors conditions - demand conditions

Select all that apply Which of the following are part of culture? - social norms - national boundaries - beliefs - social mores

- social norms - beliefs - social mores

Select all that apply Which of the following were black swan events that occurred in the early 21st century and helped reshape the global economy? - the Global financial crisis - the European debt crisis - the European refugee crisis - the end of World War II

- the Global financial crisis - the European debt crisis - the European refugee crisis

Select all that apply Which of the following are common reasons for companies to make foreign direct investments? (Check all that apply.) - to avoid import restrictions - to use incentives from the company's home country to expand abroad - to reduce tax burdens - to reduce labor costs

- to avoid import restrictions - to reduce tax burdens - to reduce labor costs

Select all that apply Which of the following have the effect of shrinking the administrative and political distance between countries? (Check all that apply.) - warfare over a disputed border - trade agreements - shared currency - a colony-colonizer relationship

- trade agreements - shared currency - a colony-colonizer relationship

Swiss-based Nestlé, the largest food company in the world, is well known for customizing its product offerings to suit local preferences, tastes, and requirements. Which of the following strategies does the company pursue? - a "one product, multiple markets" strategy - a global-standardization strategy - a multidomestic strategy - a cost-reduction strategy

A multidomestic strategy

Which of the following foreign entry modes requires the highest level of investment in terms of capital and other resources and allows for a high level of control? - exporting - franchising - joint ventures - acquisitions

Acquisitions

When an MNE does not face strong pressure for cost reductions or local responsiveness, an international strategy is typically ______. - doomed to fail - dangerous - transnational - advantageous

Advantageous

When firms from wealthy countries trade with firms from poor countries, they benefit from economic _______. - standardization - arbitrage - culture - parity

Arbitrage

Spex is a leading manufacturer of eyeglasses. Spex is based in the United States but opens a facility in a Japanese city known for cutting-edge eyeglass innovations. Spex is counting on which of the following? - lower labor costs for highly skilled workers - staging hostile takeovers of Japanese eyeglass companies - gaining access to low-cost raw materials - benefiting from location economies

Benefiting from location economies

Global strategy is a firm's quest to gain a(n) ________ when competing against foreign companies around the world. - strategic alliance - absolute advantage - competitive advantage - greenfield operation

Competitive advantage

At a basic level, the concept of "liability of foreignness" refers to the additional ______. - cost of doing business in an unfamiliar cultural and economic environment - foreigners - revenues earned by conducting business in multiple countries - cost of traveling to foreign destinations

Cost of doing business in an unfamiliar cultural and economic environment

The strategic foundations of the globalization hypothesis are based primarily on - local responsiveness - cost reduction - product differentiation - superior customer service

Cost reduction

Which of the following is an advantage of using licensing or franchising as a foreign entry mode? - Licensing or franchising reduces a firm's exposure to loss of reputation - Either one reduces a firm's exposure to loss of intellectual property - Licensing or franchising allows for high levels of control - Either one requires low capital investments

Either one requires low capital investments

When looking at the modes of foreign-market entry, one could conclude that ______. - a joint venture is a recommended early option even when joint ventures with local companies are not required by the host country - an early entry strategy is a greenfield venture because it requires the firm to invest heavily and allows for a high level of control - exporting might be the earliest stage of commitment because it allows the firm to test whether a foreign market is ready for its products - licensing or franchising should only be considered after many years of experience in the foreign market as the investment required is very high

Exporting might be the earliest stage of commitment because it allows the firm to test whether a foreign market is ready for its products

Porter's diamond framework to explain national competitive advantage includes four interrelated factors: demand conditions, competitive intensity in a focal industry, related and supporting industries/complementors, and ______. - factor conditions - regional clusters - governmental regulations - planned regional obscurity

Factor conditions

True or false: Though low-skilled laborers make much less in developing countries, no such difference in wages exists for high-skilled workers.

False

Multinational enterprises that manufacture commodity products that focus on cost leadership tend to use a(n) ______ strategy. - mass-customization - local-responsiveness - global-standardization - international

Global-standardization

________ is how firms are able to source supplies at lower costs, to learn new competencies, and to further differentiate their products and services overseas. - domestic outsourcing - globalization - business-level strategy - an equity-based alliance

Globalization

In order for a company to be considered a multinational enterprise, it must operate ______. - with franchise locations in multiple countries - in every country - in more than one country - exclusively in the country where it was founded

In more than one country

Companies seek to access international markets as a means of ______. - participating in a uniform market - avoiding competition - developing transnationalism and ethnocentrism - increasing their economic value creation

Increasing their economic value creation

Due to globalization, the world's market economies are becoming more ______. - integrated and interdependent - diversified and unique - advanced and independent - export-led and undeveloped

Integrated and interdependent

IKEA offers the same products in every market. This indicates that IKEA has followed a(n) ______ strategy. - transnational - international - multidomestic - local

International

If a firm's goal is to leverage home-based core competencies in foreign markets, it should pursue a(n) ______ strategy. - international - political distance - liability of foreignness - local responsiveness

International

Which of the following statements about pursuing international expansion is true? - It is a good option for a firm struggling in a domestic market - A major benefit is gaining access to high-cost, exclusive input factors - It ensures a firm's success as a low-cost competitor - It can enhance a firm's competitive advantage

It can enhance a firm's competitive advantage

A benefit of an international strategy is ______. - reduced exchange rate exposure - leveraging core competences - high risk of IP appropriation - limited local responsiveness

Leveraging core competences

The additional costs of doing business in an unfamiliar cultural and economic environment, and of coordinating across geographic distances, are best described as a(n) - economic embargo - social cost - opportunity cost - liability of foreignness

Liability of foreignness

According to Porter, the enduring competitive advantages in a global economy lie increasingly in _____. - local things such as knowledge, relationships, and motivation - outsourcing cheap labor from developing countries such as China and India - geographic disparity - identifying internal workers as a source of innovation and change

Local things such as knowledge, relationships, and motivation

The benefits to be accrued from locating value chain activities in the world's optimal geographies for a specific activity are known as _________ economies.

Location

________ are described as the benefits from locating value chain activities in prime geographies for a specific activity. - Polycentric innovation strategies - Communities of learning - Location economies - Liability of foreignness

Location economies

A company that deploys resources and capabilities in the procurement, production, and distribution of goods and services in at least two countries is a ______. - competitive advantage - foreign subsidiary - non-equity alliance - multinational enterprise

Multinational enterprise

Global events in the 2000s and 2010s contributed to a rise of ______ political policies in the United States and Europe which could significantly alter the global trade landscape in coming years. - collectivist - anarchist - nationalist - libertarian

Nationalist

The best explanation of why Gulf airlines are giving U.S. legacy carriers stiff competition is that the Gulf carriers - offer more special deals to business travelers than do the U.S. legacy carriers - have taken advantage of U.S. trade laws that allow for unrestricted foreign competition - offer better service for lower costs than do the U.S. legacy carriers - have built luxury hubs throughout Europe and the United States

Offer better service for lower costs than do the U.S. legacy carriers

In a global-standardization strategy, the main competitive element is ______. - leveraging best-of-class competencies independent of cost - reduced cost - local responsiveness - product differentiation

Reduced cost

Companies from wealthy countries tend to trade with other rich countries rather than poor countries because they can - benefit from economic arbitrage - increase the per capita income of consumers in the poor countries - replicate their existing business model more easily - take advantage of the price differences between the two markets

Replicate their existing business model more easily

According to the CAGE distance framework, cultural distance most affects industries or products - that a foreign government views as vital to national security - that are related to national and/or religious identity - for which demand varies by income - with low value-to-weight ratio

That are related to national and/or religious identity

In the late 2010s, a trade war between which two countries threatened to upend decades of globalization and international trade? - China and Japan - India and Brazil - the United States and Germany - the United States and China

The United States and China

According to the CAGE distance framework, what does cultural distance represent? - the cultural disparity between an internationally expanding firm's home country and its targeted host country - the difference between a firm's organizational culture and its competitor's organizational culture - the cultural disparity between the employees of two companies in a joint venture - the geographical distance between two countries that have similar national cultures

The cultural disparity between an internationally expanding firm's home country and its targeted host country

All other things equal, the greater the cultural distance, ______. - the lower the liability of foreignness - the greater the liability of foreignness - the lower the cost and uncertainty of conducting business abroad

The greater the liability of foreignness

Which of the following strongly affects the cultural distance between two countries? - the difference in consumer income in the two countries - the languages spoken in each country - the status of financial institutions in each country - the transportation networks connecting the two countries

The languages spoken in each country

A(n) ______ strategy focuses on integration at the business level by attempting to reconcile product differentiations at low cost. - mass customization - transnational - globalization - international

Transnational

If an MNE wishes to be responsive to the needs of its local consumers but also wants to attain a lowest-cost position, it should follow a(n) ______ strategy. - multidomestic - global-standardization - international - transnational

Transnational

The extent to which members of a society feel anxious when faced with an unknown situation is known as ______. - power distance - uncertainty avoidance - masculinity - universalism

Uncertainty avoidance

Multinational enterprises will often make foreign direct investments (FDI) which is a firm's investment in _________ abroad. - financial markets - the host country - lobbying foreign governments - value chain activities

Value chain activities

Select all that apply Which of the following factors help define the administrative and political distance between two countries? (Check all that apply.) - The absence or presence of shared monetary associations - The absence or presence of political hostilities - The strength of legal or financial institutions - The geographic space between borders

- The absence or presence of shared monetary associations - The absence or presence of political hostilities - The strength of legal or financial institutions

Since expanding internationally, IKEA has shifted focus, concentrating on effectively managing a global supply chain in order to achieve economies of scale. This is reflective of a(n) ______ strategy. - death-of-distance - multidomestic - liability of foreignness - global-standardization

Global-standardization

Select all that apply Though many benefits exist, which of the following are among the drawbacks of a transnational strategy? (Check all that apply.) - It fails to take advantage of economies of scale and location - Managers become bored with focusing on only a single culture - It's difficult to implement - It requires implementing a complex organizational structure

- It's difficult to implement - It requires implementing a complex organizational structure

Select all that apply A multinational enterprise would likely be motivated to pursue a global-standardization strategy in order to ______. (Check all that apply.) - take advantage of economies of scale - be locally responsive - increase product differentiation - take advantage of location economies

- take advantage of economies of scale - take advantage of location economies

Select all that apply Which of the following are benefits of a transnational strategy? (Check all that apply.) - It minimizes local adaptations - It promotes global learning and the diffusion of best practices and innovations - It provides a standardization of all products and services - It harnesses economies of scale

- It promotes global learning and the diffusion of best practices and innovations - It harnesses economies of scale

Select all that apply Under Globalization 3.0, MNEs freely locate business functions anywhere in the world based on an optimal mix of which factors? (Check all that apply.) - racial makeup - PESTEL factors - capabilities - costs

- PESTEL factors - capabilities - costs

Select all that apply Which of the following statistics regarding MNEs are correct? (Check all that apply.) - They make up 74% of the private sector R&D - They account for 41% of the US gross domestic product - They pay 25% of the wages in the United States - They account for 11% of the private sector employment growth since 1990

- They make up 74% of the private sector R&D - They pay 25% of the wages in the United States - They account for 11% of the private sector employment growth since 1990

The Finnish company Nokia was an early industry leader in cell phones. This is an example of ______. - national competitive advantage - an international strategy - lack of local responsiveness - increased differentiation

National competitive advantage

When companies face a highly competitive environment at home, they are more likely to ______. - avoid engaging in global competition entirely - outperform global competition that lacks such intense domestic competition - underperform global competition because of competitive distractions at home - employ network effects to improve continuous growth and innovation

Outperform global competition that lacks such intense domestic competition

In the global economy, according to Porter, competitive advantages increasingly exist in _______, such as Silicon Valley. - models of national competitiveness - regional geographic clusters - CAGE distance frameworks - multidomestic strategies

Regional geographic clusters

Which of the following is the most important determinant of economic distance? - the exchange rate - inflation - wealth and per capita income - the balance of trade

Wealth and per capita income

Despite a growing belief in the death-of-distance hypothesis, there remains evidence that certain countries remain leaders in specific industries and maintain a kind of ______ advantage. - locally responsive - natural resources - exchange-rate - national competitive

National competitive

According to Porter's diamond of national competitive advantage, factor conditions are best described as a country's - endowments in terms of natural, human, and other resources - cultural and social environment that influence its economic health - ethnographic conditions and trends that affect its growth and development - level of political and economic integration with other countries

Endowments in terms of natural, human, and other resources

Relaxicab Inc. is a 100-year-old, multinational enterprise (MNE). Which of the following activities would the company most likely have been involved in during the stage of Globalization 2.0? - Relaxicab would have restricted all its business activities to its home country - It would have ventured into foreign markets essentially by exporting goods - Relaxicab would have organized itself as a global collaboration network with the help of internet technologies - It would have increased its local responsiveness to country-specific circumstances by duplicating business functions overseas

It would have increased its local responsiveness to country-specific circumstances by duplicating business functions overseas

Benicio's Burritos is a leader in the Mexican fast-food category in the United States. It decides to expand internationally, starting in Japan. Benicio's Burritos fails within a year, learning later that Mexican food is uncommon in Japan and that the flavor profiles are not compatible with Japanese palates. The failure of Benicio's Burritos can be attributed to which of the following? - liability of foreignness - foreign direct investment - mismanagement of funds - loss of intellectual property

Liability of foreignness

Rekall Autos Inc., an automobile company based in the country of Springfield, made a capital investment of $400,000 to set up production units and distribution channels in the country of Uganda from where it plans to access the Uganda market. Such investments are best known as - corporate leveraged buyouts - foreign direct investments - corporate venture capital investments - foreign exchange

Foreign direct investments