Strategic Management- Chapter 9

What is the difference between licensing and​ franchising? A. Licensing firm grants rights to another firm in the host country to produce​ and/or sell a product. B. Licensing grants rights to another company in the host country to open a retail store using the​ company's name. C. Licensing provides an opportunity for a firm to establish a presence in countries where the per capita spending is not sufficient for expansion. D. Licensing lets another firm in the host country to expand rapidly with minimal capital investment. E. In licensing the firm pays a percentage of its sales as a royalty.

A. Licensing firm grants rights to another firm in the host country to produce​ and/or sell a product.

In which stage of international development can the organization now establish its manufacturing​ facilities, sales​ offices, and service offices in a key​ country? A. Stage III B. Stage II C. Stage IV D. Stage V E. Stage I

A. Stage III (primarily domestic company with international division)

Stealth expatriates are those managers or workers who are​ _______________________. A. cross-border commuters who go on many business trips and temporary assignments around the world B. Individuals who are dissatisfied and return home due to the customs and values in other countries. C. Individuals who are open to the assignment and committed to adapt to the new environment in a different country D. cross-border commuters who go on a permanent assignment by a multinational corporation around the world E. assigned to a particular country on permanent assignment by a multinational corporation

A. cross-border commuters who go on many business trips and temporary assignments around the world

Facts that should be considered before implementing strategy for international employment includes all of the following EXCEPT that​ ___________________. A. of those employees who stayed for the duration of their assignment performed better than expected B. nearly​ 80% of larger companies send some of their employees as expats C. three-quarters of companies report spending two to three times an​ expat's annual salary on a typical assignment D. between​ 20% and​ 45% of expatriate assignments are failures. E. about half of the managers return from abroad assignments due to job dissatisfaction

A. of those employees who stayed for the duration of their assignment performed better than expected

One of the common mistakes resulting in early returning home of the expatriated employees is​ ________________. A. designing an advance plan for repatriation B. failing to educate the person about the customs and values in other countries C. the compelling reason for sending a current employee to a new country. D. the selection of an individual who is open to the assignment in a new environment E. sharing the lessons learned from previous failures

B. failing to educate the person about the customs and values in other countries

A relatively quick way to move into an international area is through​ __________________________. A. green-field development B. exporting C. acquisitions D. turnkey operations E. franchising

C. Acquisitions

A good way to minimize risk and experiment with a specific product is​ _________________. A. acquisitions B. turnkey operations C. exporting D. franchising E. green-field development

C. Exporting

All of the following statements describe what a multinational corporation​ (MNC) is​ EXCEPT: A. MNC faces the dual challenge of achieving scale economies through standardization while responding to local customer differences. B. MNC has strategic alliances that may complement or even substitute for an internal functional activity. C. MNC is a company that engages in any combination of activities from​ exporting/importing to​ full-scale manufacturing, in foreign countries. D. MNC is a highly developed international company with deep involvement throughout the world. E. MNC manages its worldwide operations as if they are totally interconnected.

C. MNC is a company that engages in any combination of activities from​ exporting/importing to​ full-scale manufacturing, in foreign countries.

Key drivers for strategic fit between international strategic alliance partners include all of the following EXCEPT​ ________. A. Partners contribute key strengths but protect core competencies B. Alliance strategy must be derived from​ business, corporate, and functional strategy. C. Partners must be mutually independent for achieving clear and realistic objectives. D. Partners must agree on fundamental values and have a shared vision about for joint value creation. E. Joint activities must have added value for customers and the partners.

C. Partners must be mutually independent for achieving clear and realistic objectives.

The three most widely used techniques for international performance evaluation are​ ___________________________. A. ROI, budget​ analyses, and profitability B. net​ income, historical​ comparisons, and ROI C. ROI, historical​ comparisons, and budget analyses D. transfer​ pricing, ROI, and inflation rate E. ROI, inflation​ rate, and budget analyses

C. ROI, historical​ comparisons, and budget analyses

In which stage of international development is the organization primarily a domestic company that exports its products through local distributors and dealers in a foreign​ country? A. Stage II B. Stage III C. Stage I D. Stage V E. Stage IV

C. Stage I (Domestic Company)

In which stage of international development is the organization a global industry that denationalizes its operations when it establishes operations in a key​ country(s)? A. Stage I B. Stage III C. Stage V D. Stage II E. Stage IV

C. Stage V (MNC with global emphasis)

What happens at Stage 2 during the process of international​ development? A. Success in earlier stage leads the company to establish manufacturing facilities in the foreign countries. B. The company becomes the most successful MNC with worldwide human resources. C. Success at the earlier stage leads to establishment of a sales company with offices in the foreign countries. D. The company becomes a​ full-fledged MNC, with increase investments in the foreign countries. E. The domestic company exports some of its products through distributors in the foreign countries.

C. Success at the earlier stage leads to establishment of a sales company with offices in the foreign countries.

The​ green-field development is a recommended method for international entry when a​ __________________________________. A. company would like to join with a foreign corporation to combine resources B. company would like to purchase another company operating in a foreign country C. company does not want to purchase another​ company's problem along with its assets D. company would like to grant rights to another company to open retail store using its name E. corporation operating throughout the world has a large amount of management talent at its disposal

C. company does not want to purchase another​ company's problem along with its assets

ROI can cause problems when it is applied to international operations due to all of the following reasons EXCEPT​ ___________________________. A. accounting systems B. transfer pricing C. stealth expatriates D. foreign currencies E. inflation rates

C. stealth expatriates

In which stage of international development can the organization establish its own sales company to control marketing and to eliminate the middlemen in the​ organization? A. Stage III B. Stage IV C. Stage I D. Stage II E. Stage V

D. Stage II (Domestic company with export division)

One of the fastest growing MNCs in the recent years who tries to hire managers with local experience is​ ________________. A. ​AT&T B. Subway C. KFC D. Uber E. Apple

D. Uber

The three common categories of standards for products and services are​ _________________________. A. ​safety/environmental; transfer​ pricing; and testing procedures B. testing​ procedures; transfer​ pricing; and energy efficiency C. home​ appliances; energy​ efficiency; testing procedures D. safety/environmental; energy​ efficiency; and testing procedures E. energy​ efficiency; safety/environment; home appliances

D. safety/environmental; energy​ efficiency; and testing procedures

Existing standards for products and services are drafted by different bodies for different countries. All of the following identify correctly the bodies and countries EXCEPT​ _________________________. A. AFNOR in France B. CSA in Canada C. BSI in the United Kingdom D. DIN in Germany E. IEC in the United States

E. IEC in the United States

To deal with different accounting systems throughout the​ world, the​ London-based International Accounting Standards developed the​ ________________________. A. International Electrotechnical Commission​ (IEC) B. British Standards Institute​ (BSI-K) C. Generally Accepted Accounting Principles​ (GAAP) D. Financial Accounting Standards Board​ (FASB) E. International Financial Reporting Standards​ (IFRS)

E. International Financial Reporting Standards​ (IFRS)

In which stage of international development does the organization typically establish a local operating division or company in the host​ country? A. Stage V B. Stage II C. Stage I D. Stage III E. Stage IV

E. Stage IV (Multinational corporation with multidomestic emphasis)

All of the following assessments are correct statements about the stages of international development EXCEPT​ ________. A. a firm that is considered an MNC in Stage V of international development is considered a regional firm B. developments in information technology change the way international organizations operate in the marketplace C. an organization can be at different stages of international development at the same​ time, with a different product in a different market at a different level D. an organization that implements the stages of international development might initiate production and sales in many countries without the use of the steps to export products out of a local sales subsidiary E. an international company always follows the five steps of international development to initiate the export process out of a country

E. an international company always follows the five steps of international development to initiate the export process out of a country

A set of recommendations to improve the entire expatriation process include all of the following EXCEPT​ _______________________. A. designing a plan for repatriation B. having a compelling reason for sending a current employee to a new country C. developing a means of maintaining open and frequent communications D. choosing individuals who are open to the assignment E. assigning sponsors and mentors in home country and not in new country

E. assigning sponsors and mentors in home country and not in new country

Coined by Peter​ Drucker, the term​ "production sharing" is commonly referred to as​ _______________________. A. licensing B. joint venture C. franchising D. exporting E. outsourcing

E. outsourcing