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1) LBO-based private equity transactions are associated with three major changes in corporate governance. List these changes. 2) Compare and contrast the two primary strategies companies use to cope with the currency risks. Answer: There are two primary strategies companies […]

1) Cartels are often labeled as anticompetitive and outlawed by antitrust laws. 2) Cross-shareholding is based on financial interest between the firms. Answer: T 3) Differentiate between the radical, the free market and pragmatic nationalism view on FDI. Answer: First, […]

1) The refusal of Japan, the EU, and the US to reduce farm subsidies was one of the reasons for the collapse of the Doha Round. 2) According to the VRIO framework, valuable, rare, and hard-to-imitate resources and capabilities will […]

1) Making a rival aware of an attack makes it easier for the attacker to achieve its objective. 2) In the context of internal governance mechanisms, if accounting-based measures are adopted, stock prices obviously are subject to too many forces […]

1) In a pure market economy, the government only performs functions that the private sector cannot do. 2) Economic systems are examples of formal institutions. Answer: T 3) The combination of resources and assets that enable a firm to gain […]

1) According to the institution-based view, informal institutions must be sought when formal institutions fail. 2) Informal institutions are closely related to ethnocentrism. Answer: T 3) According to the VRIO framework, imitable but well organized resources and capabilities will provide […]

1) Introducing third-party logistics (3PL) providers may more effectively align the interests in the supply chain. 2) The free market school has provided much of the intellectual underpinning for globalization spearheaded by MNEs. Answer: T 3) In entrepreneurial firms, an […]

1) Global sustainability disregards sustainable capitalism. 2) The antitrust policies in the United States make it difficult for incumbents to raise entry barriers for new entrants. Answer: T 3) In the context of segmentation based on customer categories, global dreamers […]

1) Horizontal FDI refers to the amount of FDI moving out of a country in a year. 2) Antidumping duties are a type of tariff barrier. Answer: F 3) GATT 1994 refers to the agreement governing the international trade of […]

1) According to Max Weber, Protestant work ethics led to the rise of capitalism in Europe. 2) On the global economic pyramid, the Triad refers to developed economies consisting of North America, Western Europe, and Japan. Answer: T 3) Proponents […]

1) In international marketing, the country-of-origin effect refers to the positive or negative perception of firms and products from a certain country. 2) In the context of achieving alignment, if a recognized leader in a supply chain exercises power, it […]

1) Compare and contrast the advantages and disadvantages of a strong and a weak dollar. 2) When MNEs adopt a localization strategy, the interdependence on knowledge management is high. Answer: F Answer: A strong (appreciating) dollar: Advantages: US consumers benefit […]

1) Compare and contrast between the strategies of direct and indirect exports. 2) In the first half of the 20th century, the services sector started commanding height. Answer: F 3) Expatriates act as daily managers to run operations and to […]

1) A firm’s resources and capabilities are the tangible and intangible assets used to choose and implement its strategies. 2) Trademarks are legal rights awarded by government authorities to inventors of new products or processes. Answer: F 3) A firm […]

1) Cartel is an output- and price-fixing entity involving multiple competitors. 2) Briefly discuss market orientation versus relationship orientation that concern marketing and supply chain management. Answer: Market orientation places the highest priority on the creation of superior customer value […]

1) What are the two core propositions of the institution-based view? 2) Describe the four driving forces that influence the choice of a contract or an equity approach in the formation of alliances. Answer: In stage two of the alliance […]

1) Regional integration deals in Africa show the least amount of protectionism in international trade. 2) The theory of purchasing power parity suggests that in the absence of trade barriers, the price for identical products sold in different countries will […]

1) In MNEs adopting the home replication strategy, knowledge is developed at the center and transferred to subsidiaries. 2) Agility refers to the ability to change supply chain configurations in response to longer-term changes in the environment and technology. Answer: […]

1) The resource-based view is developed on the insight that competitors do not share certain resources and capabilities specific to one’s firm. 2) Late movers face greater technological and market uncertainties. Answer: F 3) One of the late-mover disadvantages is […]

1) The basic concept of protectionism and mercantilism is the same. 2) Internalization can help reduce opportunistic behavior in international trade. Answer: T 3) Tangible resources differ from intangible resources in that tangible resources are easier to imitate. Answer: T […]

1) Social capital is the ability to recognize the value of new information, assimilate it, and apply it. 2) Elaborate on the institution-based view of alliances and acquisitions. Answer: Alliances and acquisitions function within formal legal and regulatory frameworks. The […]

1) Identify and explain the dilemma behind transaction costs and international entrepreneurial opportunities. 2) Explain the benefits of gaining international business experience and working as an expat. Answer: Answers may vary. People skills and greater understanding of the complexity of […]

1) The primary participants of the foreign exchange market are IMF and World Bank. 2) ACFTA is currently the largest Free Trade Area in terms of population. Answer: T 3) Collectivists are more collaborative when dealing with in-group members. Answer: […]

1) The informal institution-based view that stresses on the cognitive pillar is centered on the internalized taken-for-granted values and beliefs that guide firm behavior. 2) In order to win a predation case in the US, an attempt to monopolize must […]

1) A firm manufacturing clocks in its home country and through FDI is an example of downstream vertical FDI. 2) Right-wing totalitarianism refers to the monopolization of power in the hands of a communist party. Answer: F 3) The cultural […]

1) What is the stage model? Can SMEs internationalize faster than what is suggested by the stage model? 2) Family background and educational attainment correlate with entrepreneurship. Answer: T 3) The best way to reduce expatriate turnover is a career […]

1) Most inpatriates are expected to eventually return to their home country to replace expatriates. 2) Discuss whether global and regional economic integration create more benefits or more challenges. Answer: In the absence of global economic integration, regional economic integration […]

1) One of the advantages of being a first-mover is the opportunity to free ride on late-mover investments. 2) The VRIO framework differs from SWOT analysis in that the VRIO framework promotes nonoffshoring. Answer: F 3) Proposition 1 of the […]

1) Discuss the formation of GATT and the issues that precipitated the formation of the WTO (Post GATT). 2) Domestic transaction costs are qualitatively higher than international transaction costs. Answer: Answer: GATT was established in 1948. Unlike the WTO, the […]

1) Middle-aged expatriates are the most expensive, because the employer often has to provide a heavy allowance for childrens education. 2) Explain the role of the Board of Directors. Answer: Boards of directors perform control, service, and resource acquisition functions. […]

1) The product life cycle theory is popularly known as the diamond theory. 2) Strategic hedging focuses on using forward contracts and swaps to contain currency risks. Answer: F 3) Forward transactions allow participants to buy and sell currencies now […]

1) An original brand manufacturer includes research and development in its value chain activities. 2) By trying to be self-sufficient and producing a wide range of goods, mercantilist policies help sustain the wealth of a nation in the long run. […]

1) The four Ps of marketing are: product, price, positioning, and place. 2) Describe the different roles of expatriates. Answer: Expatriates play four important roles: strategist, daily manager, ambassador, and trainer. 1) Expatriates are strategists representing the interests of the […]

1) Explain how interaction differs between tacit collusion and explicit collusion. 2) Managerial human capital refers to some of the most valuable, rare, and hard-to-imitate skills and abilities acquired by top managers and directors. Answer: T 3) Explain the advantages […]

1) Tunneling is a legal method of solving principal-principal conflicts. 2) From a resource-based view, explicit knowledge is strategically more important than tacit knowledge. Answer: F 3) A reactive strategy is indicated by relatively little or no support by top […]

1) The more hard to describe the capabilities of a firm in an alliance, the greater the preference for an equity involvement. 2) It is impossible to internationalize without venturing abroad. Answer: F 3) Describe what it means for a […]

1) What are the potential issues that arise during repatriation? 2) A letter of credit increases transaction costs by increasing transaction risks. Answer: F 3) Identify the benefits and costs of FDI to host countries. Answer: The benefits of FDI […]

1) Members of short-term orientation societies emphasize perseverance and savings for future betterment. 2) In terms of international trade competitiveness, a strong dollar makes it easier for US firms to export and to compete on price when combating imports. Answer: […]

1) A country highly productive in manufacturing typically generates a merchandise trade deficit. 2) Subsidies are nontariff barriers. Answer: T 3) A competitive advantage that is sustained implies that it is permanent. Answer: F 4) Liability of foreignness is the […]

1) The minimization of principalagent conflicts through concentration of ownership and control, unfortunately, introduces more principalprincipal conflicts. 2) The transnational strategy is usually the easiest strategy for an MNE to implement and the first one adopted when the firm ventures […]

1) Knowledge inflow faces the common problem of Not invented here syndrome. 2) Alliances permit firms to sequentially increase their investment should they decide to pursue acquisitions. Answer: T 3) MNEs that engage in a transnational strategy promote global learning. […]

1) Compared to large firms, innovators at SMEs have limited ability to personally profit from their innovations because property rights usually belong to the corporation. 2) Discuss direct exporting, licensing, and franchising as strategies for entering a foreign market. Explain […]

1) Explain the role of nongovernmental organizations (NGOs) in globalization. 2) Combining resource similarity and market commonality helps yield a framework of competitor analysis for any pair of rivals. Answer: T 3) During the first stage of alliance formation, a […]

1) An acquisition is an example of a wholly owned subsidiary. 2) The infant industry argument demands lesser government intervention in international trade. Answer: F 3) A firms financial resources and capabilities are an example of its intangible assets. Answer: […]

1) Social structure is the outcome of a societys formal and informal rules of the game. 2) Every time a WTO country lowers a trade barrier, it has to do the same for all other member countries. Answer: T 3) […]

1) Patents are exclusive rights of firms to use specific names and brands. 2) Strategic trade theory advocates mercantilist policy for all industries. Answer: F 3) According to the pendulum view of globalization, globalization is a relatively new phenomenon triggered […]

1) Explain, with the help of examples, the three primary types of foreign exchange transactions. 2) Discuss the characteristics of the modern trade theories. Answer: The product life cycle theory accounts for changes in the patterns of trade over time […]

1) Domestic transaction costs tend to be higher than international transaction costs. 2) Classical theories assume no foreign exchange complications. Answer: T 3) In the context of NTBs, VERs are government payments to domestic firms. Answer: F 4) A copyright […]

1) The three potential motives for alliances are synergistic, hubristic, and managerial motives. 2) Strategic investments in an equity-based alliance involve one partner investing in another. Answer: T 3) Individuals who discover, evaluate, and exploit previously unexplored opportunities are referred […]

1) Competitive dynamics are the actions and responses undertaken by competing firms. 2) A common stereotype is that players from collectivist societies are more collaborative and trustworthy, and that those from individualist societies are more competitive and opportunistic. What do […]

1) Capital inflow can help improve a host countrys balance of payments. 2) The Andean Communitys largest trading partner is the United States. Answer: T 3) Confucianism has been a leading philosophy in East Asian business ethics. Answer: T 4) […]

1) Original design manufacturers are firms that both design and manufacture products. 2) Licensing and franchising are examples of equity modes of entry. Answer: F 3) Original equipment manufacturers are firms that design, manufacture, and market branded products. Answer: F […]

1) In the United States, unionized employees earn less than non-unionized employees. 2) The International Trade Administration investigates antidumping cases in the United States. Answer: T 3) Ethnocentrism continues to characterize many MNEs: knowledge transfer is typically one wayfrom headquarters […]

1) Integrating individuals from two (parent and host) countries is a lot more complex than molding managers from a variety of nationalities. 2) Formal institutions governing domestic competition are broadly guided by competition policy. Answer: T 3) What is totalitarianism? […]

1) The term supply chain is almost synonymous with value chain, encompassing both inbound and outbound logistics. 2) Equity-based alliances include co-marketing, research and development, contracts, turnkey products, strategic suppliers, and strategic distributors. Answer: F 3) Voice-based governance mechanisms are […]