Chapter 9 Flashcards
- An important feature of wholly owned subsidiaries is that:
A. they face a low risk with large investments in one area.
B. they are very efficient with entering multiple countries or markets.
C. they offer higher profits, clearer communications, and shared visions to a multinational company (MNC).
D. they involve reduced risk and involvement for a multinational company (MNC).
C. they offer higher profits, clearer communications, and shared visions to a multinational company (MNC).
- Identify a true statement about alliances and joint ventures.
A. They prevent partners from achieving economies of scale and scope that would be easy for a firm operating alone to accomplish.
B. They are likely to be less favored as a means of doing business in emerging countries.
C. They fail to help partners overcome the effects of local collusion or limits being put on foreign competition.
D. They have become popular in recent years because of the significant operational benefits they offer to both multinational companies (MNCs) and their local partners.
D. They have become popular in recent years because of the significant operational benefits they offer to both multinational companies (MNCs) and their local partners.
- An important feature of an equity joint venture is that:
A. it is characterized by one group’s merely providing a service to another.
B. it involves a financial investment by a multinational company (MNC) in a business enterprise with a local partner.
C. it organizes worldwide operations based primarily on function and secondarily on product.
D. it provides the most benefits when the need for product specification or differentiation is high.
B. it involves a financial investment by a multinational company
- Identify a true statement about a nonequity venture.
A. It is characterized by one group’s merely providing a service to another.
B. It provides the most benefits when the need for product specification or differentiation is high.
C. It involves a financial investment by a multinational company (MNC) in a business enterprise with a local partner.
D. It organizes worldwide operations based primarily on function and secondarily on product.
A. It is characterized by one group’s merely providing a service to another.
- Identify the two types of joint ventures.
A. Equity and nonequity ventures
B. Proprietary and public ventures
C. Statutory and unofficial ventures
D. External and internal ventures
A. Equity and nonequity ventures
- Which of the following routes is a multinational company (MNC) likely to choose in order to quickly expand resources or construct high-profit products in a new market?
A. Franchising
B. Licensing agreements
C. Mergers and acquisitions
D. Basic export and import operations
C. Mergers and acquisitions
- A _____ is a business arrangement under which one party allows another to operate an enterprise using its trademark, logo, product line, and methods of operation in return for a fee.
A. license
B. franchise
C. certificate of proprietary usage
D. joint venture
B. franchise
- Which of the following statements is true about licensing?
A. In a typical arrangement, the licensor will allow the licensee to use a patent, a trademark, or proprietary information in exchange for a fee.
B. Companies that spend a relatively large share of their revenues on research and development (R&D) are likely to be licensees.
C. Licenses are uncommon among large firms seeking to acquire technology to bolster an existing product.
D. A license is a very high-cost way of gaining and exploiting foreign markets.
A. In a typical arrangement, the licensor will allow the licensee to use a patent, a trademark, or proprietary information in exchange for a fee.
- Advantages of alliances and joint ventures include all of the following except _____.
A. improvement of efficiency
B. collusion or restriction in competition
C. access to knowledge
D. mitigation of political factors
B. collusion or restriction in competition
- Which of the following globalization versus local responsiveness combinations best fits the cement manufacturing industry?
A. Low pressure for globalization and low pressure for local responsiveness
B. Low pressure for globalization and high pressure for local responsiveness
C. High pressure for globalization and low pressure for local responsiveness
D. High pressure for globalization and high pressure for local responsiveness
A. Low pressure for globalization and low pressure for local responsiveness
- Which of the following globalization versus local responsiveness combinations best fits the telecommunications industry?
A. High pressure for globalization and high pressure for local responsiveness
B. High pressure for globalization and low pressure for local responsiveness
C. Low pressure for globalization and low pressure for local responsiveness
D. Low pressure for globalization and high pressure for local responsiveness
A. High pressure for globalization and high pressure for local responsiveness
- Identify a true statement about export arrangements in the context of initial division structure.
A. Manufacturing firms with technologically advanced products usually avoid an export arrangement as a first choice.
B. Firms can reduce the risk and size of investment in establishing significant international operations using an export arrangement.
C. If a company has a broad product line, the export manager usually reports directly to the head of marketing and international operations are coordinated by this department.
D. If a company has a narrow product line, the export manager will head a separate department and often report directly to the president
B. Firms can reduce the risk and size of investment in establishing significant international operations using an export arrangement.
- In a company that has a narrow product line, the export manager usually reports directly to the head of _____.
A. purchasing
B. personnel
C. production
D. marketing
D. marketing
- Pressure by local government for continued growth of international sales encourages on-site _____.
A. maintenance
B. supply and distribution operations
C. manufacturing operations
D. safety operations
C. manufacturing operations
- Which of the following statements is true about an international division structure of an organization?
A. It puts a great deal of burden on the CEO for monitoring the operations of a series of overseas subsidiaries as well as domestic operations.
B. It prevents the company from developing an overall, unified approach to international operations as well as a cadre of internationally experienced managers.
C. Companies still in the development stages of international business involvement are least likely to adopt an international division structure.
D. Companies that use an international division structure include those with small international sales, limited geographic diversity, or few executives with international expertise.
D. Companies that use an international division structure include those with small international sales, limited geographic diversity, or few executives with international expertise
- A structural arrangement that handles all international operations out of a division created for this purpose is referred to as a(n) _____.
A. worldwide organizational structure
B. global matrix structure
C. international division structure
D. overseas network structure
C. international division structure
- All of the following types of companies are likely to adopt an international division structure except:
A. companies with limited geographic diversity.
B. companies with a large number of executives with international expertise.
C. companies still in the developmental stage of international business.
D. companies with small international sales.
B. companies with a large number of executives with international expertise.
- A structural arrangement in which domestic divisions are given worldwide responsibility for product groups is referred to as a(n) _____.
A. international division structure
B. global product division structure
C. global area division structure
D. global functional division structure
B. global product division structure
- Global structures of multinational companies (MNCs) come in three common types:
A. vertical, horizontal, and flat.
B. product, area, and functional.
C. mixed, transnational, and nontraditional.
D. authoritarian, democratic, and socialist.
B. product, area, and functional.
- Which of the following provides the most benefits when the need for product specification or differentiation is high?
A. International division
B. Global product division
C. Global area division
D. Global functional division
B. Global product division