Question 1

As defined in the European Union, small and medium-sized enterprises (SMEs) are manufacturers or service providers with ________ or fewer employees.

Accepted Answer

According to the European Union definition, small and medium-sized enterprises (SMEs) have 250 or fewer employees. Choice A (500) and B (5000) exceed this limit, and choice C (1000) is also higher than the defined number of employees for SMEs.

Question 2

A firm that grants another the right to use an entire business system in exchange for fees, royalties, or other forms of compensation is known as a(n) ________.

Accepted Answer

A franchisor is a firm that grants another party the right to use its entire business system, including trademarks, business model, and operational procedures, in exchange for fees or royalties.

Question 3

MNEs are best known for their ________.

Accepted Answer

MNEs are primarily known for their foreign direct investment activities, which involve establishing and acquiring businesses abroad. This allows them to expand their operations and gain access to new markets, resources, and customers, while also benefiting from economies of scale and scope. While exporting is a common strategy for some MNEs, it is not the main focus of their internationalization efforts. Additionally, MNEs do not have a reluctance to explore emerging markets, as these markets offer significant opportunities for growth and profitability. Finally, MNEs typically have low rates of employee attrition due to their ability to offer competitive compensation, benefits, and career advancement opportunities.

Question 4

Which of the following is an upstream value-chain activity?

Accepted Answer

Sourcing is an upstream value-chain activity, as it involves finding and acquiring the inputs or resources needed for production. Marketing, distribution, and after-sales service are downstream activities, as they involve promoting, selling, and servicing the finished product.

Question 5

In the research and development stage of the international value chain, ________ act as distribution channel intermediaries.

Accepted Answer

The answer of In the research and development stage of...

Question 6

Licensing allows companies to ________.

Accepted Answer

Licensing allows companies to internationalize rapidly while remaining in their home market by granting rights to a foreign company to produce and sell their products.

Question 7

A young entrepreneurial company that initiates international business activity early in its evolution, moving rapidly into foreign markets is called a(n) ________.

Accepted Answer

A born global firm is a company that starts its international business activity early in its evolution and rapidly enters foreign markets. Option B, MNE (Multinational Enterprise), refers to a company that has operations in multiple countries but may not have initiated international business activity early on. Option C, not-for-profit company, refers to a company that does not aim to make profits, and option D, conglomerate, refers to a large corporation that has subsidiaries across different industries.

Question 8

Within the international value chain, which of the following would operate as a facilitator?

Accepted Answer

A facilitator is a person or organization that helps others to do something more easily or efficiently. Within the international value chain, a lawyer would operate as a facilitator by providing legal advice and guidance to the companies involved in the chain. The importer, retailer, and distributor are all considered as players in the international value chain, but not facilitators.

Question 9

The rise of Eastern European SMEs has resulted largely from two trends: the access these firms have gained in recent years to the massive European Union and ________.

Accepted Answer

The access to the massive European Union has played a significant role in the rise of Eastern European SMEs. Additionally, direct investment by foreign investors in emerging markets has also contributed to their growth. The other options, such as increased emphasis on niche marketing, widespread outsourcing, and regular tax breaks from national governments, may have played a role in the growth of Eastern European SMEs to some extent but are not the primary reasons for their rise.

Question 10

As defined in Canada and the United States, small and medium-sized enterprises (SMEs) are manufacturers or service providers with ________ or fewer employees.

Accepted Answer

In Canada and the United States, SMEs are typically defined as businesses with 500 or fewer employees.

Question 11

In ________, some focal firms are partly or wholly owned by the government.

Accepted Answer

In centrally planned economies, the government has a significant role in the ownership and control of businesses, including focal firms.

Question 12

Which of the following best describes a firm that allows a partner the right to use certain intellectual property for a specified period of time in exchange for royalties or other compensation?

Accepted Answer

A licensor is a firm that allows a partner the right to use certain intellectual property for a specified period of time in exchange for royalties or other compensation.

Question 13

Which of the following stages of the international value chain immediately follows the research and development stage?

Accepted Answer

The answer of Which of the following stages of the...

Question 14

Delegating certain noncore functions to outside vendors is a strategy known as ________.

Accepted Answer

Delegating certain noncore functions to outside vendors is known as outsourcing. Franchising is a strategy for expanding a business by licensing its trademark and operating system, Licensing is a legal agreement in which the licensor allows the licensee to use their property for a fee or royalty, and Diversifying is a strategy for expanding a business by entering new markets or offering new products and services.

Question 15

Which of the following is true with regard to MNEs?

Accepted Answer

MNEs (Multinational Enterprises) usually operate in multiple countries and perform various business activities through a network of subsidiaries. This allows them to leverage local resources and take advantage of market opportunities in different regions. Option A is incorrect as MNEs typically have access to a larger pool of human resources than SMEs. Option B is incorrect as MNEs, due to their size and resources, can target a wide range of products and services. Option C is incorrect as MNEs, like any other large organization, may face challenges in adapting quickly to changes in the business environment, leaving SMEs with more flexibility.

Question 16

SMEs usually choose ________ as their main strategy for entering foreign markets.

Accepted Answer

Exporting is the most common and feasible entry mode for SMEs as it involves minimal investment and low risk. SMEs can export using indirect methods like agents, distributors or direct methods like setting up their own export department. Importing is not a strategy for entering foreign markets but rather a way of procuring goods and services from foreign suppliers. Divesting involves selling or liquidating existing assets in a foreign market and investing involves setting up subsidiaries or joint ventures in a foreign market to gain a strong foothold. Both of these strategies require substantial investment and are risky for SMEs.

Question 17

Peter, a graduate student from Michigan, ordered a notebook from Opus Inc., an American MNC manufacturing and selling computers and related products. The notebook that Peter ordered from Michigan was assembled in Opus' factory in Taipei. This exemplifies the ________ stage in the international value chain.

Accepted Answer

The production stage involves the actual manufacturing or assembly of the product, which is exemplified in this scenario where the notebook ordered by Peter was assembled in Opus' factory in Taipei.

Question 18

A born global firm is defined as ________.

Accepted Answer

A born global firm is a young entrepreneurial company that initiates international business activity early in its evolution, moving rapidly into foreign markets.

Question 19

Which of the following is a downstream value-chain activity?

Accepted Answer

Downstream activities involve all the activities that happen after the product is manufactured and ready for sale to the customers. Marketing is a downstream activity as it involves promoting, advertising, and selling the finished product to the targeted customers.

Question 20

Which of the following is true about SMEs?

Accepted Answer

SMEs often sustain entrepreneurship and innovation in national economies. While some may be bureaucratic, they are not generally more so than MNEs. Adaptability and specialization vary widely among SMEs.

Quiz 3: Organizational Participants That Make International Business Happen