Deck 9: Strategy Implementation: Global Strategy

Question 1

In international dealings,green-field development is

A) a way in which an MNC may contract with a foreign government or local firm to trade raw materials for certain resources belonging to the MNC.
B) a way in which an MNC can take total control of operations by acquiring a firm already established in the host country.
C) when a corporation chooses to build a facility from scratch allowing it the freedom to design the plant, choose suppliers, and hire its workforce.
D) when an MNC has a large amount of management talent available and chooses to use its personnel to assist a firm in a host country for a specified fee and period of time.
E) contracting for construction of operating facilities in exchange for a fee.

Answer 1

C

Question 2

In international dealings,turnkey operations are

A) a way in which an MNC may contract with a foreign government or local firm to trade raw materials for certain resources belonging to the MNC.
B) a way in which an MNC can take total control of operations by either starting a business from scratch or acquiring a firm already established in the host country.
C) when a corporation chooses to build a facility from scratch allowing it the freedom to design the plant, choose suppliers, and hire a workforce.
D) when an MNC has a large amount of management talent available and chooses to use its personnel to assist a firm in a host country for a specified fee and period of time.
E) contracting for construction of operating facilities in exchange for a fee.

Answer 2

E

Question 3

Management contracts are used in international dealings

A) as a way in which an MNC may contract with a foreign government or local firm to trade raw materials for certain resources belonging to the MNC.
B) as a way in which an MNC can take total control of operations by either starting a business from scratch or acquiring a firm already established in the host country.
C) when a corporation chooses to build a facility from scratch allowing it the freedom to design the plant, choose suppliers, and hire a workforce.
D) when an MNC has a large amount of management talent available and chooses to use its personnel to assist a firm in a host country for a specified fee and period of time.
E) when an MNC typically contracts for construction of operating facilities in exchange for a fee.

Answer 3

D

Question 4

A relatively quick way to move into an international area is through green-field development.

Question 5

Which means of international entry is a variation of the turnkey operation?

A) joint venture
B) acquisition
C) green-field development
D) production sharing
E) BOT

Question 6

When a host government expropriates part or all of a foreign-owned company's holdings in its country,which means of international entry is common for firms to use?

A) joint venture
B) acquisition
C) management contracts
D) production sharing
E) BOT

Question 7

Exporting is popular for small businesses because of the Internet and rapid advance of overnight express services.

Question 8

An MNC uses which international strategy for entering a foreign market by associating itself with a firm in the host country or a government agency in that country to combine resources and expertise needed for the development of a new product or technologies?

A) licensing
B) joint ventures
C) production sharing
D) exporting
E) acquisitions

Question 9

Forming a joint venture between a foreign corporation and a domestic company is the most popular strategy used to enter a new country.

Question 10

A joint venture reduces the risks of expropriation and harassment by host country officials.

Question 11

An MNC uses which international strategy for entering a foreign market by purchasing another company already operating in the area developing synergistic benefits gained from acquiring strong complementary product lines and a good distribution network?

A) licensing
B) joint ventures
C) production sharing
D) exporting
E) acquisitions

Question 12

Research suggests that joint ventures are more successful in international undertakings than are wholly owned subsidiaries.

Question 13

An MNC uses which international strategy for entering a foreign market by simply shipping goods produced in the company's home country to other countries for marketing to minimize risk and to experiment with a specific product?

A) licensing
B) joint ventures
C) exporting
D) production sharing
E) acquisitions

Question 14

Which means of international entry is often called outsourcing?

A) joint venture
B) acquisition
C) green-field development
D) production sharing
E) BOT

Question 15

Licensing is an especially useful strategy if the brand name is well known but the firm does not have the funds to finance its entering the country directly.

Question 16

Licensing grants rights to another company to open a retail store using the franchiser's name and operating system.

Question 17

An MNC uses which international strategy for entering a foreign market by combining the higher labor skills and technology available in the developed countries with the lower cost labor available in the developing countries?

A) licensing
B) joint ventures
C) production sharing
D) exporting
E) acquisitions

Question 18

Research indicates that growing internationally is positively associated with firm profitability.

Question 19

One benefit of a U.S.company entering a joint venture with an international firm is that it

A) reduces the risks of expropriation by host country officials.
B) enhances the policy of the host country's takeover of the firm.
C) promotes skepticism among other countries not involved in the merger.
D) encourages competitors to work with the company.
E) increases revenues by 20%.

Question 20

To obtain a solid position in the profitable North American beer market,InBev of Belgium purchased Anheuser-Busch.This was an example of which means of international entry?

A) joint venture
B) acquisition
C) green-field development
D) production sharing
E) BOT

Question 21

The term production sharing was coined by Alfred Chandler.

Question 22

For a multi-national corporation (MNC) to be considered global,it must manage its worldwide operations as if they were totally interconnected.

Question 23

The global multi-national corporation faces the dual challenge of achieving scale economies through standardization while at the same time responding to local customer differences.

Question 24

Which of the following is not identified as a key driver for strategic fit between alliance partners?

A) The alliance must be important to both partners.
B) Joint activities must have added value for customers and the partners.
C) The alliance must be accepted by key stakeholders.
D) Partners contribute key strengths, but protect core competencies.
E) Partners must independently achieve their goals.

Question 25

A prior relationship with an alliance partner helps to develop

A) a level of trust.
B) a larger profit.
C) a stronger contractual agreement.
D) less need on negotiations.
E) fewer personnel.

Question 26

Turnkey operations are typically contracts for the construction of operating facilities in exchange for a fee.

Question 27

A highly developed international company with a deep involvement throughout the world,plus a worldwide perspective in its management and decision-making is called a(n)

A) international corporation.
B) multi-domestic corporation.
C) multi-national corporation.
D) global corporation.
E) Stage IV corporation.

Question 28

The BOT concept stands for Build,Operate,Transfer.

Question 29

The global MNC faces the dual challenge of achieving scale economies through standardization while at the same time responding to

A) increased competition.
B) local customer differences.
C) higher prices.
D) global economics.
E) increased shipping expenses.

Question 30

Production sharing is often called outsourcing.

Question 31

What type of partner is favored by firms when forming new alliances?

A) entrepreneurial firms
B) firms in alliances with multiple other firms
C) small organizations
D) past partners
E) large organizations

Question 32

An international company is a highly developed company with a deep involvement throughout the world,plus a worldwide perspective in its management and decision-making.

Question 33

A key driver for strategic fit between international alliance partners is that the alliance must be important to both partners.

Question 34

What are the more popular options for international entry?

Question 35

Government restrictions on ownership can discourage acquisitions.

Question 36

What is the key to the successful implementation of strategic alliances?

A) the selection of an appropriate country
B) the timing of the entry
C) the selection of the local partner
D) the size of the local partner firm
E) the political environment of the country

Question 37

Acquisitions are usually a far more complicated and expensive operation than green-field development.

Question 38

Management contracts are common when a host government expropriates part or all of a foreign-owned company's holdings in its country.

Question 39

Which of the following is not true of the drivers for strategic fit between alliance partners?

A) The alliance must be important to both partners.
B) Partners must be mutually dependent for achieving clear and realistic objectives.
C) The alliance need not be accepted by key stakeholders.
D) Partners contribute key strengths.
E) Partners protect core competencies.

Question 40

A multi-national corporation

A) is synonymous with an international corporation.
B) has limited involvement through the world.
C) has a worldwide perspective in its decision-making.
D) has limited perspective in its management.
E) manages worldwide operations as if they were independent.

Question 41

What is the activity that occurs in Stage 1 of international development?

A) The company invests in production facilities in key countries.
B) The company exports, but trade is minor and handled by an export department.
C) The company establishes its own export division with sales offices in other countries.
D) The company operates in a global industry and establishes worldwide human resources, R&D, and financing strategies.
E) The company establishes local operating divisions in host countries to better serve individual country markets.

Question 42

The impact on the firm's structure is minimal in which stage of international development?

A) Stage 1
B) Stage 2
C) Stage 3
D) Stage 4
E) Stage 5

Question 43

Discuss the key drivers for strategic fit between international alliance partners.

Question 44

The research findings on the stages of international development suggest

A) some support for the stages of international development, but not necessarily the sequence of stages.
B) no support for the stages of international development.
C) widespread support for the sequence of stages.
D) firms cannot skip stages of the development sequence.
E) all divisions of a corporation must be at the same stage of development at the same time.

Question 45

The percentage of U.S.-based expatriate managers who fail to adjust to a host country's social and business environment is

A) 6% or less.
B) between 20% and 45%.
C) between 50% and 70%.
D) between 60% and 75%.
E) greater than 90%.

Question 46

A key driver for strategic fit between international alliance partners is that both partners must contribute core competencies.

Question 47

The first stage of international development is the domestic company.

Question 48

Global considerations dominate organizational design in which stage of international development?

A) Stage 1
B) Stage 2
C) Stage 3
D) Stage 4
E) Stage 5

Question 49

One of the big common mistakes by corporations sending executives on global assignments is

A) not raising their salaries.
B) not educating executives about customs and values in other countries.
C) not providing training for the regulatory environment.
D) not providing excellent health care.
E) not giving executives the opportunity to visit home.

Question 50

Which of the following is not true of the stages of international development?

A) Corporations operating internationally tend to evolve through five common stages.
B) Stage 1 of international development is the domestic company.
C) In Stage 4 of international development, the company adds an international division with responsibility for most of the business functions conducted in other countries.
D) In Stage 2 of international development, the firm is a domestic company with an export division.
E) In Stage 5 of international development, all managers are responsible for dealing with international as well as domestic issues.

Question 51

Which one of the following is not one of the dangers of using primarily foreign nationals to staff managerial positions in subsidiaries?

A) the increased likelihood of suboptimization
B) difficulty for the MNC to meet long-term, worldwide objectives
C) the ability for communication and coordination becomes increasingly difficult
D) promotes anger and jealousy within the nationalistic host government
E) problems in coordinating activities of several international subsidiaries leads to problems in operating in a global industry

Question 52

What percent of midsize and larger companies send some of their employees abroad?

A) 10%
B) 25%
C) 40%
D) 60%
E) 80%

Question 53

An export division is established to oversee foreign sales offices in which stage of international development?

A) Stage 1
B) Stage 2
C) Stage 3
D) Stage 4
E) Stage 5

Question 54

To be successful with a global emphasis,firms may not skip across stages of development.

Question 55

The firm becomes a full-fledged MNC in which stage of international development?

A) Stage 1
B) Stage 2
C) Stage 3
D) Stage 4
E) Stage 5

Question 56

The most successful MNCs move into a fifth stage of international development in which they have worldwide human resources,R&D,and financing strategies.

Question 57

What is the activity that occurs in the last stage of international development?

A) The company invests in production facilities in key countries.
B) The company exports, but trade is minor and handled by an export department.
C) The company establishes its own export division with sales offices in other countries.
D) The company operates in a global industry and establishes worldwide human resources, R&D, and financing strategies thereby denationalizing its operations.
E) The company establishes local operating divisions in host countries to better serve individual country markets.

Question 58

Discuss the five stages of international development.

Question 59

Of those expatriate managers who completed an assignment,what percent left their company within one year of returning home?

A) 6% or less
B) 25%
C) 50%
D) 75%
E) greater than 90%

Question 60

The establishment of its own sales company with offices in other countries to eliminate the middlemen and to better control marketing occurs in which stage of international development?

A) Stage 1
B) Stage 2
C) Stage 3
D) Stage 4
E) Stage 5

Question 61

To improve organizational learning,many multi-national corporations are providing their managers with international assignments as long as five years.

Question 62

Only ________ of human resource managers have ever worked abroad,so most have little understanding of a global assignment's unique personal and professional challenges and thus fail to develop the training necessary for such an assignment.

A) 11%
B) 21%
C) 51%
D) 41%
E) 31%

Question 63

Research indicates that corporations using cross-national teams,whose members have international experience and communicate frequently with overseas managers,have greater product development capabilities.

Question 64

The danger in using primarily foreign nationals to staff managerial positions in subsidiaries is the increased likelihood of suboptimization.

Question 65

When should an organization begin communication to discuss the repatriation process?

A) when the expat accepts the assignment
B) 6 months prior to the end of the assignment
C) when the expat returns home
D) 6 months after the expat returns home
E) when the expat arrives at the foreign assignment

Question 66

To improve organizational learning,many multi-national corporations are providing their managers with international assignments as long as five years.

Question 67

Employees who are sent on international assignments by their firms are known as

A) commuters.
B) expatriates.
C) stealth employees.
D) telecommuters.
E) executives.

Question 68

Which of the following is not true of global MNCs?

A) Global MNCs emphasize international experience.
B) Global MNCs have a greater number of senior managers who have been expatriates.
C) Global MNCs have a strong focus on leadership development through the expat experience.
D) To improve organizational learning, many MNCs are providing expats with five year assignments.
E) Less emphasis is being placed on intercultural training for managers being sent on overseas assignments.

Question 69

When designing a plan for repatriation,

A) communication should begin as soon as the manager returns home.
B) it should always include details of the next international assignment.
C) the employee should be involved in how he or she would like to incorporate the skills learned at the home office.
D) little of the experience should be shared during the assignment.
E) the plan should be generic enough to apply to all expatriates.

Question 70

Nationalistic governments tend to be placated by organizations that choose to hire

A) general managers with local experience.
B) home country managers.
C) managers with general international experience, but not from the host country.
D) fewer local managers.
E) parent company managers.

Question 71

The reasons cited for a large percent of expats sent abroad who return home early are

A) failure to learn the language and difficult job responsibilities.
B) difficulties adjusting to the culture and the language.
C) job dissatisfaction or difficulties adjusting to a foreign country.
D) job dissatisfaction and lack of technical skills.
E) lack of technical skills and inability to fulfill job responsibilities.

Question 72

Suboptimization in the MNC refers to

A) the local subsidiary ignoring the needs of the larger parent company.
B) the parent company ignoring the needs of the local subsidiary.
C) the parent company failing to hire local managers.
D) the local subsidiary being staffed by all expatriates.
E) the ease of the MNC in meeting its worldwide objectives.

Question 73

Which of the following is not a recommendation to improve the entire expat process?

A) Keep reasons for international assignments broad.
B) Assign mentors in both the home country and the host country.
C) Develop a means of maintaining open, frequent communication throughout the process.
D) Design a plan for repatriation.
E) Develop an approach for sharing the international experience within the company.

Question 74

Within a year of returning home,25% of expats

A) leave the company to join a competitor.
B) get promoted.
C) take a headquarters position.
D) take another international assignment.
E) mentor other expats.

Question 75

Executive recruiters have reported that more major corporations are

A) now requiring candidates to have international experience.
B) eliminating international assignments.
C) de-emphasizing the need for international experience.
D) eliminating stealth expatriate positions.
E) replacing executives with accidental expats.

Question 76

Most human resource managers fail to develop the training necessary for international assignments because

A) most have not worked abroad themselves and have little understanding of the unique challenges of these positions.
B) most think this training is unnecessary.
C) the financial resources are not available.
D) the time is too limited for extensive training to be delivered before the assignment.
E) cultural training resources and experts are not available to the firm.

Question 77

Cross border commuters are known as stealth expatriates.

Question 78

The likelihood that an expat will return home early is increased by

A) the perceived lack of organizational support for international assignments.
B) the emphasis on cultural training.
C) an inability to speak the language.
D) interpersonal conflicts with host country employees.
E) a lack of fit with the technical skills of the job.

Question 79

The vast majority of companies select employees for an international assignment based on their

A) language skills.
B) ability to adapt.
C) cultural sensitivity.
D) technical expertise.
E) position in the organization.

Question 80

Using third-country nationals

A) eliminates misunderstandings with local employees.
B) eliminates conflicts with the host country's government.
C) is a widespread practice among European firms.
D) decreases the opportunities for promotion.
E) is the transfer of parent company managers to an international assignment.