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1. Home replication strategy emphasizes the home country replication of international based competencies.
a. True
2. Localization strategy is an extension of the home replication strategy.
a. True
3. Transnational strategy supposedly is a trade off between being cost efficient and locally responsive but is really locally
responsive.
a. True
b. False
4. Global product division structure is the same as the geographic area structure.
a. True
5. Many MNEs have phased out the international division structure.
a. True
6. Strategy drives structure: a misfit, such as combining a global strategy with a geographic area structure, may have grave
performance consequences.
a. True
b. False
7. Because consumer tastes around the world are converging, product differentiation will soon be unnecessary.
a. True
b. False
8. A main advantage of a global standardization strategy is that it leverages low-cost advantages.
a. True
9. Duplicating home country-based competencies in foreign countries is known as localization.
a. True
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b. False
10. A home replication strategy takes advantage of current competencies but risks alienating foreign customers if it lacks
local responsiveness.
a. True
11. A localization strategy is most appropriate in industries where the pressures for cost reduction are significant.
a. True
b. False
12. Being locally responsive can run the risk of MNE fragmentation.
a. True
b. False
13. The Porter five forces are not helpful in understanding MNE structure.
a. True
b. False
14. Industrial-products firms tend to adopt geographic area divisions, and consumer-goods companies often rely
on global product divisions.
a. True
b. False
15. When buyer firms that have a great deal of bargaining power move internationally, components suppliers are
often forced to internationalize in order to retain the buyer firm’s business.
a. True
b. False
16. MNEs that buy and use enterprise resource planning (ERP) packages provide themselves with a firm-specific
advantage in doing so.
a. True
b. False
17. For most MNEs, their stakeholders do not react well to a top echelon of company officials coming almost entirely
from one nationality.
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a. True
b. False
18. No one argues that knowledge management is the defining feature of MNEs.
a. True
b. False
19. It is obviously a lot easier to imitate an intangible philosophy or mentality than to imitate a tangible structure.
a. True
20. Knowledge management not only depends on IT, but also on informal social relationships within the MNE.
a. True
b. False
21. In a transnational MNE, the role of subsidiaries is to adapt and leverage parent company competencies.
a. True
22. The “not invented here” syndrome causes managers to accept ideas invented elsewhere.
a. True
23. MNEs often must rely on a great deal of informal integrating mechanisms.
a. True
b. False
24. Overall, the micro, informal interpersonal relationships among managers of various units may create a micro-macro
link.
a. True
b. False
25. The acquisition and transfer of tacit knowledge requires hands-on practice.
a. True
b. False
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26. Of the four types of multinational enterprises, home replication experiences the most limited flow of knowledge.
a. True
b. False
27. Knowledge flow in MNEs follows the path of a top-down hierarchy.
a. True
28. For MNEs faced with the intensification of competition, R&D can provide a vehicle to access a foreign country’s local
talent and expertise.
a. True
29. Open innovation, although it accelerates internal innovation, tends to get out of control and is more of a detriment than
a benefit.
a. True
b. False
30. Global virtual teams must overcome communication and relationship barriers in order to be effective.
a. True
b. False
31. It is hard to distinguish between subsidiary initiative and empire building.
a. True
b. False
32. European MNE’s are more likely than Japanese MNE to appoint host-country or third country nationals as head of a
foreign subsidiary.
a. True
b. False
33. Customer-focused dimensions cut across all three existing mainstream dimensions.
a. True
b. False
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34. Transnational strategy aims to capture “the best of both worlds” by endeavoring to be both cost efficient and locally
responsive.
a. True
35. Subsidiary initiatives are inconsistent with corporate-wide goals.
a. True
b. False
36. Advocates of subsidiary initiatives argue that they may inject a much-needed spirit of entrepreneurship throughout a
larger bureaucratic MNE.
a. True
b. False
37. A global account structure is a customer-focused solution that supplies customers in a coordinated and consistent way
across various countries.
a. True
b. False
38. A customer-focused solution in which a provider sells whatever combination of goods and services the customers
prefer is known as a global account structure.
a. True
b. False
39. An international division serves as a means of coordination with the rest of the firm.
a. True
b. False
40. In “think global, act local” a firm needs to leverage its global presence and learn from local operations in order to
solve local problems.
a. True
b. False
41. The integration-responsiveness framework for dealing with pressures focuses on:
a. How to simultaneously deal with cost reduction and local responsiveness.
b. Host country demands and expectations.
c. Making local customers and governments happy.
d. Producing a global version of a product or service.
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42. Four strategic choices for MNEs do NOT include:
a. Home replication.
b. Domestic.
c. Multidomestic.
43. Multidomestic strategy involves all of the following EXCEPT:
a. A focus on a number of foreign countries/regions.
b. Regarding each foreign country as a stand-alone “domestic” market.
c. Global standardization strategy is the same as a multidomestic strategy.
44. The structure that is typically set up when firms initially expand abroad is a:
a. International division structure.
b. Flexible matrix structure.
c. Global product division structure.
45. In which of the following structures are foreign subsidiary managers not given sufficient voice relative to domestic
managers?
a. International division structure.
b. Geographic area structure.
c. Global product division structure.
d. Global matrix structure.
46. The most appropriate structure for a multidomestic strategy is a:
a. International division structure.
b. Geographic area structure.
c. Flexible matrix structure.
47. Which of the following is NOT true of the global matrix structure?
a. It is often used to alleviate the disadvantages associated with the geographic area structure.
b. It is often used to alleviate the disadvantages associated with the global product division structures.
c. It is often used for sharing and coordinating responsibilities between product divisions and geographic areas.
d. This structure benefits front-line managers who now have only one boss – either a country manager or a product
division manager.
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48. When the pressure for local responsiveness is high, the integration-response framework recommends which form of
multinational structure/strategy?
a. Global matrix structure.
b. International division structure.
c. Home replication strategy.
d. Global standardization strategy.
49. When the pressure for cost reduction is high, the integration-response framework recommends which form of
multinational structure/strategy?
a. Geographic area structure.
b. International division structure.
c. Home replication strategy.
d. Global standardization strategy.
50. A main advantage of a global standardization strategy is that it:
a. Leverages low-cost advantages.
b. Maximizes local responsiveness.
c. Provides for significant local autonomy.
d. Engages in global learning and diffusion of innovations.
51. The high costs due to duplication of efforts in multiple countries is a disadvantage of a:
a. Global standardization strategy.
b. Localization strategy.
c. Home replication strategy.
52. The structure that best supports, in theory, the transnational strategy is:
a. Global matrix.
b. International division.
c. Global product division.
d. Geographic area.
53. When it comes to the relationship between multinational strategy and structure, it is:
a. Best implemented through the superiority of the matrix structure.
b. Static.
c. One of reciprocity.
d. Mostly one way from structure to strategy.
54. Which of the following is NOT true in regard to institution-based considerations?
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a. Externally, MNEs are subject to the formal institutional frameworks erected by various home- and host-country
governments.
b. Host-country governments often encourage, or coerce MNEs into undertaking certain activities.
c. To staff the position of the head of a subsidiary, MNEs, in the absence of formal regulations, essentially have only
one choice: to use a home-country national as the head of a subsidiary.
d. Formal organizational charts do not necessarily reveal the informal rules of the game, such as organizational
norms, values, and networks.
55. Within a given industry, as competitors increasingly match each other in cost efficiencies and local responsiveness
a. They will be less affected by the bargaining power of suppliers.
b. Their rivalry naturally focuses on learning and innovation.
c. A geographic area division structure will become the most effective structure.
d. R&D activities and innovation become less and less important.
56. When a company’s rivals all move toward a global standardization strategy, the strategy:
a. No longer satisfies the resource-based consideration of rarity.
b. Makes the rivals more innovative.
c. Provides a source of differentiation.
d. Allows for easier imitation of informal structures.
57. When it comes to multinational enterprises, host countries:
a. May provide tax incentives to encourage MNE activity.
b. Favor MNE investment in higher value-added areas.
c. Often put formal institutional factors in place to protect domestic employment.
58. Institutional factors that affect MNEs include:
a. External, informal factors.
b. Internal factors.
c. External formal factors.
d. All of the above.
59. The type of knowledge that is codifiable (that is, it can be written down and transferred without losing much of its
richness) is called:
a. Explicit.
b. Implicit.
c. Tacit.
d. Lucid.
60. Knowledge management uses “centers of excellence” in which type of MNE?
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a. Home replication.
b. Local (multidomestic).
c. Global.
d. All of the above.
61. Which of the following is TRUE of globalized R&D?
a. For large firms, there are actually diminishing returns for R&D.
b. One way to access such a high technology and research-rich cluster is to avoid FDI.
c. R&D work performed by different locations and teams around the world virtually guarantees failure.
d. Global virtual teams, which do not meet face to face, may overcome communication and relationship barriers.
62. For MNEs pursuing a home-replication strategy, knowledge management:
a. Is characterized by a great deal of dependence among subsidiaries.
b. Develops mostly at the subsidiary level and flows upward to headquarters.
c. Occurs in a one-way flow from center to subsidiaries.
d. None of the above.
63. For most MNEs, from a resource-based view tacit knowledge is:
a. Strategically less important than explicit knowledge.
b. Central to the informal relationships of the firm.
c. Easily captured, stored, and transmitted.
d. Seldom transferred through hands-on practice.
64. Because knowledge management is central to how well a firm functions, it is important to know that knowledge is:
a. Critical to the firm only if it is explicit knowledge.
b. Implicit if it can be written down to be transferred.
c. Explicit if its acquisition requires hands-on practice.
d. Harder to transfer and learn if it is implicit.
65. Knowledge that is mostly developed and retained at the center and key locations of an MNE is characteristic of:
a. Home replication strategy.
b. Localization strategy.
c. Global standardization strategy.
66. In knowledge management, when the role of foreign subsidiaries is make differentiated contributions that are
integrated in worldwide operations, the MNE is following a:
a. Home replication strategy.
b. Localization strategy.
c. Global standardization strategy.
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d. Transnational strategy.
67. Which of the following statements about GE (opening case) and its knowledge management is true?
a. Interdependence is low.
b. An integrated network of subsidiaries is slowly being replaced by a top-down hierarchy.
c. Each subsidiary not only develops locally relevant knowledge but also aspires to contribute knowledge to
benefit the MNE as a whole.
d. Knowledge and people typically flow from headquarters to subsidiaries.
68. A main purpose in engaging in open innovation is for MNEs to:
a. Adding rules to the R&D game to deter rivals.
b. Reduce dependence on collaborative research.
c. Counteract the diminishing returns of R&D in large firms.
d. None of the above.
69. This structure is often used to supply customers (often other MNEs) in a coordinated and consistent way across
various countries.
a. Global account structure.
b. An industry sector structure.
c. Solutions-based structure.
d. None of the above.
70. Which of the following is a solution rather than a problem in knowledge management?
a. Open innovation.
b. Knowledge leakage.
c. Not invented here syndrome.
71. Which of the following is NOT an argument in favor of centralization in knowledge management but instead is an
argument in favor of decentralization?
a. Capability to facilitate corporate-wide coordination.
b. Consistency in decision-making.
c. Permits greater speed, flexibility, and innovation.
72. A limited absorptive capacity leads to:
a. A tendency to block inflows of knowledge.
b. Reductions in corporate-level overload of responsibilities.
c. Better motivation among subsidiary-level managers.
d. A tendency away from the “not invented here” syndrome.
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73. Which of the following is a customer-focused dimension?
a. Knowledge leakage.
b. Out-of-the-box packaged solutions.
c. Solutions-based structure.
d. None of the above.
74. A large firm that uses a more centralized corporate control structure is more likely to encounter:
a. Subsidiary initiatives.
b. Greater expansion of subsidiary scope of responsibility.
c. Chaos.
d. A much-needed spirit of entrepreneurship throughout the MNE.
75. Subsidiary initiatives that are not consistent with corporate-wide goals:
a. Lead to potential chaos.
b. Are essential for entrepreneurship within the MNE.
c. Marginalize the roles of subsidiary managers.
d. Are characteristic of decentralized MNE structures.
76. When faced with the complexity and cost of value-added customer-focused dimensions, the textbook suggests that
you:
a. Create new formal structures.
b. Simplify.
c. Find temporary solutions.
d. None of the above.
77. Unique to international competition are the pressures for local responsiveness, which are reflected in:
a. Consumer preferences.
b. Distribution channels.
c. Host country demands.
d. All of the above.
78. Which of the following is a key idea regarding the reciprocal relationship between strategies and structures within
MNEs?
a. The fit between strategies and structures is crucial.
b. The relationship is typically one way.
c. Strategies and structures are static.
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79. When dealing with the different internal rules of the game the come with being a multinational organization, MNEs
need to keep in mind that:
a. It is important to stand firm on rules of the game set by MNE corporate headquarters.
b. Having a foreigner as CEO is most beneficial for MNEs using a home replication strategy.
c. Some rules facilitate MNE actions, others constrain them.
80. Which is NOT one of the suggestions for international managersthat can be drawn from this chapter?
a. Create a common structure for all MNEs.
b. Understand the nature and evolution of your industry.
c. Actively develop learning and innovation capabilities.
d. Understand and be prepared to change the internal rules of the game.
81. To what extent should a firm be committed to a particular strategy versus making frequent changes in the strategy? If
82. Normally when a firm first expands overseas, it may use an international division and later use a different
organizational structure. Under what circumstances might such a firm wish to shift back to the use of an international
division?
83. The text makes the point that multinational strategy and structure have a reciprocal relationship. What are the three
84. Global R&D has pros and cons for the firm that uses that approach. However, suppose you are the leader of the
country where that firm is based. How might you view having R&D being conducted by a global team in a matter that is
vital to the nation’s economic health/and or security?
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85. Suppose you are the leader of a nation that currently has few capabilities other than a well-educated populace that
could contribute to economic growth. However, you think you have a bright idea. You are going to encourage MNEs
from around the world to locate their headquarters in your country. What might attract them and how might that pay off if
86. You are the manager in a transnational’s subsidiary. Describe the knowledge management strategy you would most
likely use and any disadvantages you may need to be aware of.
87. Because knowledge is undoubtedly a resource for any firm, describe the resource-based considerations that go into
88. Mega Global Corporation has centralized all of its global operations. The firm’s manager in Lower Slobovia would
like to see more decentralization. Her complaint: “We are the experts on what needs to be done in this country but we
have to get approval from people who have no idea as to what is going on here. That makes neither sense nor
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90. What are the two sides of external formal institutions, and how do they affect the rules of the game?