Chapter 11: Managing International Production
MULTIPLE CHOICE
1. Which item is not one of Porter’s four elements of competitive advantage in the home
base?
a. Demand conditions.
b. Factor conditions.
c. Related and supporting industries.
d. Foreign trade barriers.
2. Factor conditions promote competitive advantage by:
a. Reducing manufacturing costs.
b. Lower prices of products.
c. Increasing quality and sophistication of products.
d. All of the above.
3. Which of the following is not one of Bartlett and Ghoshal’s challenges associated with
managing heterarchy?
a. Global efficiency.
b. Contracts.
c. Local responsiveness.
d. Global innovation.
4. Which of the following is the main reason for the formation of joint ventures?
a. Leveraging the home base.
b. Maintaining flexible manufacturing.
c. A mechanism for combining complementary, firm-specific assets.
d. Attempting to be “born global.”
5. What is the main historical response to the issue of locating R&D in the global
production network?
a. To keep basic R&D in the home base.
b. To develop support laboratories.
c. To negotiate the Agreement on Trade-Related Aspects of Intellectual Property
(TRIPS).
d. To move all R&D to India and China.
6. Which of the following characteristics of multinational enterprises is most associated
with product divisions?
a. Single product, single country.
b. Single product, few countries.
c. Single product, multicountry.
d. Multiproduct, few countries.
7. Which of the following characteristics of multinational enterprises is most associated
with functional divisions?
a. Single product, single country.
b. Single product, few countries.
c. Single product, multicountry.
d. Multiproduct, few countries.
8. Which of the following characteristics of multinational enterprises is most associated
with a single, foreign division?
a. Single product, single country.
b. Single product, few countries.
c. Single product, multicountry.
d. Multiproduct, few countries.
TRUE/FALSE
1. One aspect of Bartlett and Ghoshal’s idea of an “integrated network” approach to
managing heterarchy is that the roles of subsidiaries by differentiated throughout the
global production network.
2. The notion of “corporate imperialism” is that multinational enterprises see large
emerging markets as just extensions of their operations in the Western home bases.
3. Joint ventures tend to take place when there is a lack of complementarity between two
firms’ specific assets.
4. Joint ventures tend to be stable and long-lived.
5. As multinational enterprises have re-thought their approach to R&D, they have begun to
develop regional R&D facilities outside of their home bases.
6. The design and management of global production networks, and the role of multinational
enterprises within them, can be thought of as having two aspects: intra-firm design and
inter-firm relationships.
SHORT ANSWER
1. In the view of Michael Porter, what kind of factor conditions is the basis of sustained
competitive advantage?
2. What is the relationship between Porter’s notion of related and supporting industries and
spatial clusters?
3. Why does the location of R&D facilities within global production networks matter?
4. Why has the use of regional R&D facilities by multinational enterprises increased?
5. What role can governments play in promoting spatial clusters?
6. What are the positive aspects of the Sialkot surgical instruments cluster in Pakistan?
What is one prominent negative aspect?