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International Management > Session 7 > Flashcards

Session 7 Flashcards

1
Q

What is a multinational enterprise?

A

MNE is a firm that engages in foreign direct investment and operates in multiple countries

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2
Q

What are the strategic advantages of global firms?

A
  • global scale advantages reduce costs in production, product development and marketing
  • global sourcing provides access to a wider range of inputs
  • global knowledge management enhances innovation
  • global operation allows better servicing of global customers
  • risk diversification reduces the operate risk profile
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3
Q

What is the AAA-strategies?

A
  • adaption (local responsiveness)
  • aggregation (global integration)
  • arbitrage (global production)
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4
Q

How does the M&As cross-border assemble?

A
  • acquisition

- merger

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5
Q

What is a acquisition?

A

is the transfer of the control of operations and management from one firm (target) to another (acquirer),
the former becoming a unit of the latter

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6
Q

What is a merger?

A

is the combination of operations and management of two firms to establish a new legal entity

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7
Q

What are the main motives of acquisitions?

A
  • synergistic motives
  • hubris motives
  • managerial motives
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8
Q

Which synergistic motives of acquisition exist?

A
  • leverage superior organizational capabilities
  • enhance market power
  • reduce costs by eliminating duplicate units and exploiting scale economies
  • access to complementary resources
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9
Q

Which hubris motives of acquisition exist?

A

managers’ overconfidence in their capabilities

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10
Q

Which managerial motives motives of acquisition exist?

A

self-interested actions such as empire building and bonuses

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11
Q

What is a alternative to full take over of another firm?

A

strategic alliance

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12
Q

Which conditions should have met that a joint venture is attractive option?

A
  • two entities can together achieve something that neither could achieve on its own
  • merged unit depends on inputs such as technologies from both parent firms that may be disrupted by legal separation
  • a full take-over is not feasible, perhaps because the competition authorities would object
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13
Q

What are the causes of acquisition failures?

A
  • due diligence is the assessment of the target firm’s financial status, resources and strategic fit
  • strategic fit is the effective matching of complementary strategic capabilities
  • organizational fit is the similarity in cultures, systems and structures
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14
Q

What are the problems of all M&A?

A
  • pre-acquisition: overpayment for targets

- post-acquisition: failure in integration

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15
Q

Which problems exist in the pre-acquisition phase?

A
  • managers overstimate their ability to create value
  • inadequate pre-acquisition screening
  • poor strategic fit
  • lack of familarity with foreign cultures, institutions and business systems
  • nationalistic concerns against foreign takeovers (political and media levels)
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16
Q

Which problems exist in the post-acquisition phase?

A
  • poor organizational fit
  • failure to adress multiple stakeholder groups’ concerns
  • clashes of organizational cultures compounded by clashes of national cultures
  • nationalistic concerns against foreign takeovers (firms and employee levels)
17
Q

What are hidden champions?

A
  • international business is often presented as primarily a matter of big MNEs competing for market share
  • leading in their selected niche markets world wide with competitive advantages grounded in highly specialized technological competences that are exploited worldwide
18
Q

What is global focusing?

A
  • a strategic shift from diversification to specialization which increases the international profile
  • acquisitions and divestments, the sale of business units, are often closely related
19
Q

What are the general possibilites for integration of the R&D department into the organization?

A
  • centralized R&D department
  • decentralized R&D departments
  • combined R&D departments
20
Q

What are the advantages of centralized integration?

A 
- utilization of specialization
advantages
- realization of larger projects
possible
- more efficient use of resources
- facilitation of communication
and coordination between
R&D groups
21
Q

What are the disadvantages of centralized integration?

A 
- danger of acting too
independently and of
becoming too detached from
the market
- problems with coordination
and interfaces between R&D
and other functions
- lower flexibility and reactivity,
particularly with regard to
radical technical changes
22
Q

What are the advantages of decentralized integration?

A 
- makes it easier to accomplish
short term goals
- better connection to the market
- higher flexibility/ higher
capacity of reaction
23
Q

What are the disadvantages of decentralized integration?

A 
- lower use of specialization
advantages/danger of doing
things twice
- no economies of scale
- higher coordination effort
between R&D units
- possible neglect of long term
and trans-departmental tasks
24
Q

What are the advantages of hybrid forms of integration?

A
  • enables to address short- and
    long-term tasks
  • centralized research
    (specialization)
25
Q

What are the disadvantages of hybrid forms of integration?

A
  • danger of doing things twice
  • danger of isolating the central
    R&D lab
  • problems with transfer prices
    of the output of the central
    R&D lab
  • high potential of conflicts
    between centralized and
    decentralized R&D units
  • coordination and
    communication problems
    between R&D functions
26
Q

Which decisions does R&D units have to decide where to establish new R&D units considers R&D-specific factors:

A
  • quality of input at the new site
  • quality of expected output
  • general operating efficiency of the R&D unit
27
Q

By which other R&D external factors is the the decision where to establish a new R&D units also affected?

A
  • tax optimization
  • reliability and stability of the local political and social system
  • image enhancement
28
Q

Which principal drivers are identified that were responsible for natural R&D internalization?

A
  • the quest of external science and technology

- the quest for new markets and new products

29
Q

What are the trends in international R&D?

A
  • Trend 1: internationalization of research
  • Trend 2: internalization of development
  • Trend 3: development follows research
  • Trend 4: research follows development
30
Q

How is human resource management (HRM) is defined?

A

as activities that attract, select and manage employees

31
Q

What is a culture shock?

A

is an expatriate’s reaction to a new, unpredictable and therefore uncertain environment

32
Q

What is a expatriate stress?

A

is caused by an imbalance between expectations and abilities affected by culture shock

33
Q

What is a psychological contract?

A

is an informal understanding of expected delivery of benefits in the future for current services

34
Q

What is a reverse culture shock?

A

is the experience by persons returning to their country of origin

35
Q

Which non-traditional assignemts exist?

A
  • contract work
  • commuter assignements
  • global virtual teams
36
Q

What is a inpatriation?

A

inpatriation is relocating employees of a foreign subsidiary to the MNE’s headquarters for the purposes of (1) filling skill shortages at headquarters and (2) developing a global mindset for such inpatriates

International Management (8 decks)

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