1) One advantage of wholly owned subsidiaries is:
a. Protection of know-how
b. Complete equity and operation control
c. Fast entry speed
d. All of these answers
2) Which best describes the weakness behind enterprise resource planning (ERP)
packages and MNE strategy?
a. ERPs only help a firm beginning home replication strategy, so they have low levels
of local responsiveness
b. ERPs help a firm compete as efficiently as possible, but they are designed for
widespread use by many MNEs so they do not help a firm achieve strong rarity
c. The cost of ERPs usually does not outweigh its benefits
d. ERPs help with organization and limitability, but are rarely able to help a firm
establish more value
3) Which of the following best describes how the transnational strategy uniquely differs
in regard to its communication relationship between home country and foreign market?
a. The home country has one-way communication with the foreign market, providing
innovation and direction to it
b. The subsidiaries in the home country and foreign country do not communicate
c. It seeks to eventually allow the foreign subsidiary to be autonomous, so
communication is one-sided
d. Innovations not only flow from the home country to host countries, but also flow
from host countries to the home country and flow among subsidiaries in multiple host
countries
4) Which of the following is NOT part of the reciprocal relationship between strategy
and structure?
a. Strategy usually drives structure
b. Structure also usually drives strategy
c. Strategies and structures have to be ready to change all the time
d. All of these answers
5) Which of the following is the concept behind the Big Mac index?
a. Purchasing power parity
b. Fixed exchange rate policy
c. Balance of payments
d. Currency swap
6) IBM persuaded Lenovo to give up the idea of having dual headquarters in China and
the United States and to set up its world headquarters in the United States. What was
the significance of this action?
a. It demonstrated understanding and mastery of the rules of the game
b. It made it easier to win approval from the United States government
c. It highlighted the importance of politics in such high-stakes strategic moves
d. All of the above
7) When internationalizing, entrepreneurs are advised to be:
a. Timid
b. Bold
c. Compulsive
d. Inflexible
8) The main supportive pillar(s) for informal institutions is/are:
a. Normative and cognitive
b. Regulatory (coercive)
c. Regulatory, normative, and cognitive
d. Cognitive
9) What is defined as the ability to meet the needs of the present without compromising
the ability of future generations to meet their needs?
a. Capitulation c. Corporate social responsibility
b. Global sustainability d. Social activism
10) The government taking a “hands-off approach” is known as:
a. Laissez faire c. Mixed economy
b. Command economy d. Liberal approach
11) In developed economies, a firm’s key concern is to cut cost and enhance
competitiveness to fight off low-cost rivals from emerging economies, such as China
and India.
12) A green-field operation refers to:
a. A wholly owned subsidiary created through direct foreign investment
b. A wholly owned subsidiary created by building a new factory and offices from
scratch
c. A wholly owned subsidiary created by acquisition
d. A licensing agreement with a firm in a host country
13) Turnkey projects refer to:
a. A non-equity mode of entry used to build a longer-term presence
b. Efforts among a number of firms to jointly market their products and services
c. Projects in which clients pay contractors to design and construct new facilities and
train personnel
d. Outsourcing agreements in R&D firms
14) The prediction that people around the world would be drinking Coke, wearing Levi
jeans, and watching MTV on their Sony TVs was based on which idea?
a. Worldwide increase in GDP
b. Worldwide increase in money used for luxuries
c. Worldwide convergence of consumer tastes
d. Worldwide connectivity with communication technology
15) Discuss the future of FTAA and CAFTA.
16) As a result of liberal policies, JVs have ____ and acquisitions have ____ in
emerging economies.
a. Declined, declined
b. Increased, increased
c. Declined, increased
d. Increased, declined
17) According to a McKinsey study, US firms save 58 cents on every dollar invested in
offshoring to India.
18) Which of the following is NOT a view on globalization stressed by the author?
a. A new force sweeping through the world in recent times
b. A long-run historical evolution since the dawn of human history
c. A pendulum that swings from one extreme to another from time to time
d. A force empowered by recent political decisions
19) Political arguments against free trade state it does not advance a nation’s political,
social, and environmental agendas, regardless of possible economic gains.
20) The theory of mercantilism viewed international trade as a win-win game.
21) Most firms agree that while following strict ethical standards may help win them
goodwill, it is rarely financially beneficial in the end.
22) Purchasing power parity is the price of one currency in terms of another.
23) Factor endowment theory is a proposition that nations will develop comparative
advantage based on their locally abundant factors.
24) Strategic investments in an equity-based alliance involve one partner investing in
another, while cross-shareholding involves both partners investing in each other.